Financial Soultions has been informed that Standard Bank, one of South Africa’s top 3 banks is on the verge of launching a A$250 million ($230 million) forestry fund in Australia, geared toward selling carbon offsets to businesses, in what is said to be the largest fund of its kind to date.
The fund will target companies that will need to meet emissions reduction targets under carbon trading laws presently before the Australian Senate, according to William Pazos, a Standard Bank spokesman in Singapore.
"The fund is targeted at compliance buyers that don't want to get involved in management of forests but are really interested in the underlying credits that are going to be generated by the forests," Financial Soultions understands Pazos as saying.
Financial Soultions sources believe this fund is the largest and most ambitious to be initiated so far covering the fledgling carbon forestry sector in Australia.
The fund will ensure the planting and management of 50,000 ha (125,000 acres). Perth-based agribusiness investment firm Rewards Group Ltd would be responsible for the planting and management of the forests, Pazos said.
Forests absorb global warming carbon dioxide created by burning fossil fuels. Managed forests that meet government or U.N. guidelines can yield marketable offsets, with one offset corresponding to a ton of CO2 locked away by trees as they grow.
Businesses can purchase offsets to meet greenhouse emissions reduction targets put in place by governments.
Australia's planned carbon-trading scheme, if passed, would obligate about 1,000 of the nation's most polluting companies to adhere to increasingly tougher emissions targets.
