The African clean development mechanism (CDM) market was expected to grow from 34 projects in 2009, to well over 100 projects by 2015, growth consultancy Frost & Sullivan has found.

In the company's latest study analysis released on Monday, it said that the global uncertainty regarding potential developments post Copenhagen had reined in the prospects of the African CDM market, noting that Africa had abundant resources to develop the CDM market, often at relatively low costs.

However, Frost & Sullivan programme manager Cornelis van der Waal said that different African governments had to take steps to coordinate and simplify their approach to CDM management to stimulate private investment, as private financiers tended to be sceptical about the role that CDM could play in making marginal projects feasible. "This apprehension is causing a delay in the flow of funds, which, in turn, limits utilities' ability to expand supply."

The study showed that in 2008, tht the carbon market was valued at $118-billion, which represented a robust increase of 84% in the total value of greenhouse gas (GHG) emission reductions traded in 2007.

"Africa can capitalise on this as, under the United Nations' CDM, developed countries are allowed to offset some of their GHG emissions by funding cleaner energy projects in developing countries," explained De Waal.

The study pointed out that although most potential CDM projects, especially renewable energy, remained undeveloped in Africa, sustainable development could help many new projects to qualify for CDM credits.

De Waal said that many countries were increasingly realising the benefits of diversifying their energy mix or reducing waste. Hence, CDM projects were likely to multiply over the next two years, despite the long CDM process and all the administrative hurdles encountered in most African countries.

Recently, the International Monetary Fund indicated that sub-Saharan Africa would have to invest about 3% of its gross domestic product in the power sector to redress its chronic power shortages and that despite the considerable financial challenges, many projects still held value.

"In South Africa, the recent feed-in tariffs are likely to offset the additional investment in coal-fired base stations. However, there is some uncertainty regarding the future mechanisms for carbon finance," said Van der Waal.

Nevertheless, he noted that companies were gradually realising that they needed to become more sustainable and were changing their wasteful practices and often benefiting from this as a result of CDM.

"The chemicals sector in South Africa is a fine example of this, with a number of projects in this space qualifying for CDM," concluded Van der Waal.