Citi to Purchase 1.17 Million Tonnes of Carbon Credits in Innovative Microfinance Deal with MicroEnergy Credits and Mongolia’s XacBank
Under the arrangement, a XacBank customer will purchase an energy efficient stove or home insulation products like a “ger blanket,” which covers a ger, the traditional and ubiquitous Mongolian portable tent-like structures in which more than one quarter of the Ulaanbaatar population lives. Gers are traditionally under-insulated and heated by inefficient coal-burning stoves that contribute to Ulaanbaatar’s especially severe air pollution. Ger blankets greatly increase heat retention, and, like energy efficient stoves, lower the rate of fossil fuel consumption and carbon emissions.
The reductions in household emissions accrued through the use of energy efficient fixtures will be earned by XacBank clients and then assigned to MicroEnergy Credits, which develops carbon finance projects and brings clean energy to low income microfinance households in developing countries. MicroEnergy Credits will then quantify, aggregate, and sell the credits to Citi, who will monetize these credits on the open market through its Environmental Products Trading and Origination team. Portions of the proceeds from Citi’s carbon credit purchase will be distributed by MicroEnergy Credits back to XacBank, allowing the Mongolian lender to expand its clean energy program, build additional marketing and distribution centers, and increase access to affordable clean energy loans.
“Citi and our partners collaborated to design a carbon credit financing chain that connects and values energy saved at the household level with global emission reduction targets and markets,” said Bob Annibale, Global Director of Citi Microfinance and Community Development. “Together, we are creating the capacity for Ulaanbaatar residents, living in gers, to access credit to make home energy efficiency improvements, save money, and limit their harmful environmental impact. It is a great example of using creative microfinancing to address client and community needs, and a model that can be applied in other initiatives and countries.”
“We are very excited to be at the heart of a deal which combines the best of Citi’s environmental products market expertise and our track record in the microfinance sector to deliver tangible positive outcomes for local communities and the environment,” said Stuart Staley, Global Head of Commodities at Citi. “Under this arrangement, we are implementing an innovative market-based strategy to tackle real challenges faced by developing countries.”
“MicroEnergy Credits is proud to partner with Citi in this landmark agreement, which brings microfinance households access to clean energy incentives typically only accessed by large agencies and corporations,” said April Allderdice, CEO, MicroEnergy Credits. “Microfinance institutions like XacBank have the reach to impact the energy-use options of millions of low-income households around the world. MicroEnergy Credits provides the carbon monitoring and aggregating system to be sure these carbon incentives reach the people that can use them. Agreements like this one allow low income families to use microfinance to clean the environment and improve their quality of life.”
“As a triple bottom line bank, dedicated to working for People, Planet, and Profit, XacBank is committed to tackling air pollution in our capital city- now the most polluted city in the world in the winter,” said Bat Ochir Dugersuren, CEO of XacBank. “With access to carbon revenues through our partnership with MicroEnergy Credits and agreement with Citi, XacBank’s Eco Banking Department will expand our services so that all Mongolian families have access to energy efficient products to reduce pollution, improve their health, and save money.”
The first carbon credits are expected to be available for purchase by Citi in March 2013. The program is in the process of being registered and approved through the Clean Development Mechanism run by the United Nations Framework Convention on Climate Change (UNFCCC).
About Citi
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.
Additional information may be found at www.citigroup.com | Twitter: @Citi | YouTube: www.youtube.com/citi | Blog:http://new.citi.com | Facebook: www.facebook.com/citi | LinkedIn: www.linkedin.com/company/citi
About MicroEnergy Credits
MicroEnergy Credits is a financial intermediary which links microfinance institutions to the carbon markets when they lend for clean energy. Founded in 2007 and based in Seattle, Washington, MicroEnergy Credits works with Microfinance Institutions and Carbon Emission Reducers around the world. MEC is a for-profit social enterprise financed by impact investors. Today, MEC reaches over 120,000 households with clean energy services in partnership with 20 microfinance institutions.
Additional information may be found at www.microenergycredits.com
About XacBank
XacBank (www.xacbank.mn) is one of Mongolia’s largest banks, serving Micro customers, Small and Medium-sized Businesses as well as large corporations with a range of inclusive banking, fair investment and other financial products and services. It operates in all 21 provinces and the capital city, serving more than 500 thousand customers through its 97 retail and business branches, as well as specialized banking outlets including 400 mobile banking agents and 70 Savings and Credit Cooperatives. The Bank aims to create a sustainable value for its customers, shareholders and institutional investors, while promoting a triple-bottom line vision and mission as built around the “Planet, People and Profit.”
Additional information may be found at www.xacbank.mn | Twitter: @Xacbank | YouTube: www.youtube.com/XacBankZuvBank| Facebook: www.facebook.com/xacbank | LinkedIn: www.linkedin.com/company/xacbank
Contacts
Citi:
David Roskin, 212-559-4767
david.roskin@citi.com
or
MicroEnergy Credits:
Aimthy Thoumoung, 206-274-6457
info@microenergycredits.com
or
XacBank:
Ganchimeg G., +976-99098805
ganchimeg.g@xacbank.mn
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