Makassar - TPA Tamangapa Landfill Methane Collection and Flaring

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The objective of the Makassar Landfill Methane Collection and Flaring Project for Indonesia is to reduce methane emissions from solid waste disposed in the city of Makassar's landfill, Tempat Pembuangan Akhir (TPA) Tamangapa, through a carbon finance transaction. There are two components to the project. The first component is the construction and operation of Landfill Gas (LFG) collection and flaring equipment that will result in Certified Emission Reductions (CERs). The project developer will construct a system to collect and flare the LFG produced from Makassar's landfill site thus reducing Greenhouse gas (GHG) emissions. In order to accomplish this objective, the city of Makassar has engaged a private sector company. Gikoko will be responsible for financing the construction and operation of the LFG extraction and flaring facility while the city of Makassar will continue to own and operate the landfill. Finally, the second component is the carbon finance transaction that will facilitate the purchase of the CERs. The World Bank managed Netherlands Clean Development Facility (NCDMF) will finance the purchase of CER credits resulting from the LFG flaring component. The design of the LFG flaring component was significantly influenced by the attempt to optimize the amount of CERs to be delivered and purchased through this transaction. The purchase will be a performance-based contract under which payments are triggered by successful verification of the reduction of methane emissions by an independent and accredited designated operational entity (DOE) under the rules of the Kyoto protocol. The quantity of CERs to be contracted, the length of time over which the purchase will be made, and the price paid will be agreed between the World Bank and Gikoko during negotiations of the Emission Reduction Purchase Agreement (ERPA). In addition, as part of its responsibilities, the NCDMF will ensure registration of the project with the Clean Development Mechanism (CDM) executive board as well as the other activities involved with the purchase of the CERs.