The deal was done through Pacific Hyrdo’s Fijian joint venture Sustainable Energy Limited (SEL).

Under the terms of the sale, SEL will sell all of the CERs created by its two hydroelectric power projects in Fiji. Based on current production estimates SEL will be entitled to create 25,000 tonnes per annum of CERs.

These CERs will be sold to ABN AMRO (London) over the next seven years. ABN AMRO has in turn contracted to sell all these CERs to Accord Energy Limited, the trading arm of FTSE 100 energy and home services provider, Centrica plc, parent company of the UK’s largest residential energy supplier, British Gas.

The two power projects owned by SEL that will generate the CERs are the operating 6.5 MW Wainikasou hydro plant, and the soon to be completed 3 MW Vaturu hydro project. SEL is jointly owned by Pacific Hydro and state-owned Fiji Electricity Authority.

Under the Kyoto Protocol, carbon trading is permitted to enable industries in developed countries to offset their emissions of carbon dioxide by investing in alternative and cleaner energy projects, referred to as Clean Development Mechanism (CDM) Projects, in developing countries. SEL is in the final stage of CDM registration for its two hydroelectric power projects which is a condition of the sale of the CERs.

Pacific Hydro’s Managing Director Jeff Harding said the contract demonstrated Kyoto policies in action.

“We have seen carbon credits trading on the European market since January this year, but this transaction means that initiatives developed through the Kyoto Protocol are now a business reality,” Harding said.

“Kyoto initiatives that were proposals and theories are now commercial opportunities and economic realities.”

Pacific Hydro more than 800 MW of hydroelectric development projects in Chile and Fiji which are expected to qualify as CDM projects.