RED.L Regulatory News (RED)

11 Jul 2007 07:01

Camco International Ltd11 July 2007 11 July 2007 Camco's contracted carbon credit portfolio matures well Camco is a leading climate change group managing one of the world'slargest portfolios of carbon credits, providing carbon advisory services andinnovating new products and services. Camco works closely with businesses toidentify and develop projects that reduce greenhouse gas emissions. Camco is pleased to provide a trading update, including several notable successstories from our offices around the world and our progress in moving towards theprovision of an integrated climate change service. In the first half of 2007 the Camco Group has shown strong growth in thedevelopment and execution of carbon asset development projects. With newprojects of 15.5m tonnes secured since the last update on 20 April 2007 (25.5min Q2), the contracted portfolio stands at 127m tonnes. Operational execution has been exceptionally strong with 28% of our portfolioregistered, over 67% receiving host country approval and 75% commissioned orunder construction. Our projects are therefore relatively mature, and we can bereasonably confident that they will deliver carbon credits as forecast bymanagement. Highlights: * 35m tonnes now registered. Camco has one of the largest registered portfolios of projects in the carbon market. * The increase in registered tonnes includes Camco's Yangquan project. This is the largest coal mine methane project to be registered and uses the methodology developed by Camco for such projects. * Projects expected to deliver 106m tonnes have completed Project Design Documents (PDDs) with 84m of these tonnes having host country approval. Obtaining host country approval is a crucial step in the Kyoto process, and this progress highlights the strength of the Camco portfolio. * Finance is in place for projects delivering 117m tonnes. 93m tonnes are under construction or are already operational. Camco now has one of the most mature portfolios of projects in the market, with credits scheduled for delivery from early in the Kyoto period. Carbon Asset Development Volume - Carbon portfolio - Camco has contracted new carbon credit projects totalling 15.5m tonnes since 20 April 2007.- Camco continues to review expected carbon credit production and make adjustments to production forecasts over time based on regular project reviews. Our adjusted contracted portfolio has increased to 127m tonnes (118.8m tonnes at 20 April). Operations - Delivery of carbon credits Regulatory progress- PDDs completed for 106m tonnes- Host country approvals have been received for projects representing a total of 84m tonnes (up from 67.9m at 20 April)- Validation complete for 45m tonnes- A total of 35m tonnes are now registered with the UNFCCC (or equivalent in the case of JI projects). This is a significant increase since year end (2.8m), and since 20 April (21.8m). Project development- Financing is already in place for projects expected to deliver 117m tonnes- Projects totalling 59m tonnes are under construction- Projects totalling 34m tonnes are already constructed and are operational Value - Carbon credit commercialisation: - Projects totalling 16m tonnes have already undergone a first verification- 46m tonnes (36%) of the contracted portfolio are now under an Emission Reduction Purchase Agreement (ERPA), up from 37m at 20 April- 44m tonnes are under term sheet (total including ERPA 90m tonnes)- Camco holds either the right or the option to acquire 34m (26m at 20 April) carbon credits 'in specie'. The weighted average purchase price is €6-7. Advisory Our carbon advisory business continues to expand and allows us to provideadditional value to our clients including the identification of greenhouse gasmitigation projects. To date, new contracts this year total €4.6m. In SouthAfrica, ESD is working for the National Energy Regulator to look at policies topromote renewable electricity. Similar policy projects are underway in Hungary,Bulgaria, Uganda and Tanzania. In the UK, our work on carbon management and lowcarbon property developments continues to grow and with it the potential for theorigination of voluntary carbon credits. The last quarter has seen the expansion of advisory services into China and theUSA. In China Camco is working with the China Energy Research Institute to lookat market based mechanisms to reduce energy consumption in buildings. We are seeing good integration benefits where carbon asset development andadvisory teams are working closely together in China, Africa and the USA. Forthe US specifically, teams have joined together to enter the North Americanmarket. In East Africa, a joint initiative will result in the advisory practiceworking on developing quality VER projects with our carbon asset developmentteam. New products In May ESD launched EPLABEL Online, a web site that allows the public sector tomeasure their building's C02 performance. From April next year, all large publicbuildings in the EU must display an energy certificate to comply with the EnergyPerformance in Buildings Directive. In the UK, buildings are responsible forhalf of C02 emissions. Our joint venture EPES will offer an online certificationservice to comply with the directive & help identify C02 reduction projects. Our work on VERs from land use projects using the Plan Vivo methodology isexpanding with contracts in Tanzania and Rwanda to look at the feasibility ofgreenhouse gas abatement from land use changes. In Tanzania, the potential fromone region alone is 80m tonnes. Camco has secured the world's first successful validation of a Bio-dieselproject. This project in Bulgaria has validated carbon credits of 0.75m tonnesusing a methodology developed by KWI - one of our founding companies - based inAustria. Global presence We continue to grow our presence in existing markets whilst expanding into newkey markets. With JI regulations coming into effect in Russia, our Russian portfolio isgrowing and we have contracted 18 projects, which are expected to produce inexcess of 18m tonnes. We now have 13 staff in our Russian offices in Moscow andArchangelsk. Our team in China now totals 48 and with over 60 projects in China, weanticipate continued growth in the monitoring and verifications team. We havealso commenced operations in Kuala Lumpur, Malaysia. Camco is pleased to announce the opening of offices in Denver and Aspen,Colorado. Our US growth plan envisages at least 1 additional office to beoperational before year end. Camco also continues to monitor the market forpotential partnerships and acquisitions. Camco now has 19 offices across the world, and staff totalling 200. Jeff Kenna, CEO of Camco, commenting upon the Company's progress said: "We are continuing to grow our business and I am particularly pleased that 75%of our portfolio is either already commissioned or under construction. With 28%already registered and 13% having been through their first verification, we areable to make a better forecast of delivery to 2012 and I am confident that wewill be able to hit our IPO target of delivering and commercialising 127mtonnes. In addition, with recent acquisitions in China and the UK, we are ableto access increased numbers of carbon asset development projects." For further information please contact: Camco International Limited +44 (0) 20 7256 7979Jeff Kenna, Chief Executive OfficerScott McGregor, Chief Financial Officer Press Gavin Anderson +44 (0) 20 7554 1400Ken Cronin/Kate Hill/Jodie Reilly Nominated Advisor KBC Peel Hunt Ltd +44 (0) 20 7418 8900Jonathan Marten/David Anderson About Camco (www.camco-international.com) Camco works with companies in the developing world to identify and developgreenhouse gas emission reduction projects, managing the entire process fromproject initiation to the delivery of carbon credits for sale in theinternational market. Camco is a market leader in China and Russia - two of thelargest potential markets for Carbon Credits - as well as in Eastern Europe andAfrica. Camco has one of the largest carbon credit portfolios in the world, consistingof 93 projects under exclusive contract with the potential to deliver over 127.0million carbon credits through to 2012. Camco was voted 'Best Project Developer'in a survey of carbon industry participants undertaken by Point Carbon. About ESD (www.esd.co.uk) ESD was established in 1989 and since then has helped to define policies andimplement projects in the mitigation of climate change. It provides advisory andconsulting services, working with Government's, NGO's and private sectorenterprises. ESD also undertakes project development work, both for its ownaccount and in joint ventures. ESD has a staff of over 120 people working in 8offices across the UK, Eastern Europe and Africa. In 2006, ESD was voted one ofthe Financial Times top 50 'Great Places to Work'. Greenergy International Ltdis a minority shareholder in ESD Ltd. ESD Ventures (ESDV) works in partnership to develop carbon reduction businessesand projects in the UK, China and Africa. ESDV works at its own risk and takessuccess fees and equity stakes in the client business. The current ESDVportfolio includes wind farm development, biomass project development and landuse projects all of which may generate carbon credits. This information is provided by RNS The company news service from the London Stock Exchange