On May 12, the World Bank's second Pilot Auction Facility (PAF) held its second successful auction, allocating 20 million dollars of climate funds to reduce 5.7 million tons of carbon dioxide emissions. South Pole Group was among the successful bidders and won the right to sell carbon offsets from its project portfolio at a fixed price to the World Bank over the coming four years. The Pilot Auction Facility by the World Bank is a results-based payment mechanism that sets a price guarantee for future carbon credits in the form of a tradeable put option, sold exclusively in auctions. It is backed by Germany, Sweden, Switzerland, and the United States. Price guarantees remain important in the lead-up to 2020, ensuring that emission reduction projects can continue to operate while the international community works to operationalize market-based mechanisms under the Paris agreement.
For us at South Pole Group, the price guarantee means that we can maintain existing projects and keep growing our diverse portfolio of emission reduction initiatives around the globe, especially in least developed countries (LDCs) in Africa and Asia.