PERTH (miningweekly.com) – Mining major BHP Billiton has thrown its weight behind the Forest Bond, designed to reduce deforestation and stimulate investment in low-carbon development.
The Forest Bond, issued by the International Finance Corporation, raised $152-million from institutional investors, and is listed on the LSE.
The bond allows investors to receive coupons in the form of carbon credits, generated from avoided deforestation, and issues under the Verified Carbon Standard, instead of cash coupons.
The bond will support a project in Kenya run under the United Nations climate change mitigation mechanism, with BHP saying on Tuesday that the company was providing a price support mechanism of $12-million to ensure the project could sell a predefined minimum quantity of carbon credits each year, until the bond matured, whether or not investors in the bond elected to receive carbon credit coupons.
“Our support of the Forest Bond is another example of the action we are taking to address climate change and work in partnership to enhance the global response,” said BHP VP sustainability and climate change Dr Fiona Wild.
“Greenhouse-gas emissions will remain part of the resources sector, even with the prioritisation of greenhouse gas emissions reductions and energy efficiency at BHP Billiton and industry-wide. While low emissions technology is becoming more effective and commercially viable, it is important to identify robust and cost-effective offsets to help meet future reduction commitments.”