PORT VILA, 17th July 2023.Vanuatu has signed its first carbon credit market through an Authorization Statement with the Swiss Government on the 8th of May, 2023.
This first signed authorization statement is for the Electrification of Vanuatu’s Inhabited Islands Through Solar Power Internationally Transferred Mitigation Outcomes (ITMO) program will be implemented by the National Green Energy Fund (NGEF). The program is focused on renewable energy specifically on Solar electrification.
The Vanuatu government and the Swiss government signed a bilateral agreement on Article 6.2 Carbon Market in October 2021 under the Paris Agreement ratified by Vanuatu in September 2016.
According to Article 6.2 Vanuatu carbon market initiatives, each project provisioned to tab on the carbon market must be approved and given a Letter of Authorization (LOA) before they are implemented. Each of these projects must have a Design Mitigation Activity which is a detailed description of each project and should be approved and signed by both parties (Vanuatu and Swiss government).
The bilateral agreement with Switzerland was signed with the expectation that ITMO revenues will facilitate a green transition in Vanuatu, contributing to the achievement of the NDC targets, including the financial sustainability on the NGEF operations. For this solar electrification project, ITMO revenues will allow the NGEF to provide subsidized equipment to enhance the affordability by its customers namely public constitutions, businesses and households to connect following the 100% access policy of the updated National Energy Road Map for Vanuatu of which the NGEF is a key instrument.
Vanuatu has tabbed on the carbon credit market to be able to sell its carbon emission offset to the Swiss government as their National Determined Contribution (NDC) for instance a 10kwh of solar will be equivalent to how much fuel used is offset and purchased by the Swiss government as their NDC.
In addition, a fuel switch project is on the pipeline awaiting its LOA to commence biofuel for electricity generation.