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Allianz takes 10% stake in REDD developer

External Reference/Copyright
Issue date: 
11 October 2011
Publisher Name: 
Environmetal Finance
Christopher Cundy
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German insurance giant Allianz has invested an undisclosed sum in Wildlife Works Carbon, a US-based developer of projects that reduce emissions from deforestation and forest degradation (REDD).

Allianz will take a 10% equity stake together with a multi-year option to purchase carbon credits from Wildlife Works’ Kasigau Corridor REDD project in Kenya. This 30-year project is set to avoid more than 1 million tonnes of carbon dioxide (CO2) emissions per year, while protecting wildlife and supporting the local economy. The size of Allianz’s option deal was not disclosed.

Last year, French bank BNP Paribas agreed a deal with Wildlife Works to acquire the rights to 1.25 million credits and an exclusive option on its future REDD projects in exchange for project start-up financing of up to $50 million. South Africa’s Nedbank also helped kick-start the project, agreeing to buy 2.5 million credits in 2009.

“For investors like Allianz, carbon investments are an attractive business case, providing us with access to innovative asserts and technologies, as well as to emerging growth markets ... Carbon markets make it possible to finance climate protection,” said Armin Sandhoevel, CEO of Allianz Climate Solutions.

Sandhoevel said REDD should play a major role in combating climate change. “We now expect a clear commitment from the international community to develop the necessary frameworks for a large-scale implementation of REDD,” he added.

Further investments in REDD and other carbon projects are planned, said Martin Ewald, investment manager at Allianz Climate Solutions. "We want to generate our own carbon credits, and we want to see a sustainable business case," he told Environmental Finance.

Wildlife Works said the equity investment will back its plans to develop other REDD projects, protecting 5 million hectares of native forest and mitigating at least 25 million tonnes of CO2 per year.

“The pipeline includes projects in Africa, Latin America and Southeast Asia ... We hope to be in a position to make the first new project announcements Q4 2011,” Mike Korchinsky, founder and CEO of Wildlife Works, told Environmental Finance.


Extpub | by Dr. Radut