Ecuador: Diesel subsidy reform crediting program

pipeline

The proposed Operation will support the preparation of the foundations for and piloting of a carbon transaction in Ecuador as the first of its kind of innovative operations in Latin America. It is designed as the first step towards a carbon market and building capacity to manage carbon transactions, underpinned by sector reforms and World Bank Group’s overarching support towards energy sector transformation in Ecuador. The climate and carbon funds to be mobilized from the Transformative Carbon Assets Facility (TCAF) will finance the GoE’s ambitious energy transition program, helping advance the reform initiatives. The proposed operation mainly comprises two components: (1) Payments for measured, reported and verified emission reductions (ERs) – Climate Finance (2) Payments for measured, reported, and verified Internationally Transferred Mitigation Outcomes (ITMOs) – Carbon Finance. In addition, the operation includes technical assistance which helps close existing institutional gaps, equip the Government with the necessary knowledge, systems, and procedures to manage carbon market activities effectively. The Project would build on previous and ongoing World Bank projects and activities that support fossil fuel pricing reforms and social protection for the poor and vulnerable households in the reforms, i.e. Innovative Carbon Resource Application For Energy Transition (iCRAFT) - P180432 and Innovative Finance for Resilient and Sustainable Energy Transition (iFIRST) - P512264.