SA setting up carbon trade manager

South Africa's Energy Development Corporation (EDC) is planning to trade carbon credits through the EU emissions trading scheme within a few months, promoting itself as a one-stop shop for developers of projects that qualify for carbon credits.

The EDC has observed that third parties have been selling credits for higher prices than project developers received. It remains to be seen whether the EDC will also skim off this income stream as a middleman, or improve the flow of funds to developers. According to its website, the EDC mandate is to promote, facilitate and develop commercially viable alternative energy solutions.

It targets market sectors where there is insufficient private sector activity as well as where the government, for strategic reasons, believes state investment is required. EDC is also involved in sectors where renewable energy and energy efficiency requires catalysing and developing. EDC is a leader in taking higher risks to develop these sectors.

As a body owned by the South African government, it should aim to improve the efficiency of financial transfers, but the EDC is also to operate as a fully commercial entity -- presumably meaning that it will do all it can to be self-financing.