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Uzbekistan|environment|June 25, 2024 / 10:32 AM
Uzbekistan becomes first country to receive World Bank payment for reducing carbon emissions

AKIPRESS.COM - Uzbekistan has become the first country in the world receiving a payment from the World Bank for reducing carbon emissions through a policy crediting program, the World Bank's press service reported. The country successfully cut 500,000 tons of carbon emissions under the iCRAFT Project.

This project – the Innovative Carbon Resource Application for Energy Transition (iCRAFT) – was crafted to support Uzbekistan in implementing energy efficiency measures, phasing out energy subsidies, and transitioning to cleaner energy sources. The emission reductions were independently verified.

"The iCRAFT project aims to transition from individual transactions to program-level carbon trade interventions. We are eager to see how this pilot can set a precedent for reforms in other sectors in Uzbekistan and for other countries to follow its example," World Bank Country Manager for Uzbekistan Marco Mantovanelli said.

The World Bank's Transformative Carbon Asset Facility (TCAF) rewarded Uzbekistan with a $7.5 million grant. The government of Uzbekistan has pledged to allocate a portion of the project funds to assist vulnerable households impacted by changes in energy tariffs. Additionally, these funds will support the country's broader agenda for green transition and energy sector reform.

This payment is the first of several anticipated payments under the Emissions Reduction Payment Agreement (ERPA) concluded between the government of Uzbekistan and the World Bank as part of the iCRAFT Project. Under this agreement, Uzbekistan could receive up to $20 million in grants for verified emission reductions or carbon credits generated through its energy subsidy reforms.

Uzbekistan aims to reduce 60 million tons of CO2 through the project, with the iCRAFT set to purchase approximately 2.5 million tons of CO2. The country will have the opportunity to sell the remaining carbon credits on international carbon markets, using the systems and processes established by the iCRAFT Project.

 

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