November 27, 2019 / 1:11 PM / 17 days ago

Carbon markets pioneer Moura Costa buys back EcoSecurities from Mercuria

SAO PAULO (Reuters) - Pedro Moura Costa, a pioneer of carbon markets in the 1990s, and partner Pablo Fernandez are buying back from Swiss trader Mercuria Energy Group Ltd the low-carbon projects’ developer and carbon credit generator EcoSecurities, Moura Costa said.

Financial details of the deal were not disclosed.

Brazilian Moura Costa started EcoSecurities in 1997, some months before the approval of the Kyoto Protocol by the United Nations Convention on Climate Change (UNFCCC).

The protocol, which included emission reduction targets for developed countries, triggered the development of carbon markets since countries could use carbon credits to help them to comply.

EcoSecurities was listed on the London Stock Exchange in 2005 and raised enough capital to open offices in several countries, becoming the largest developer of low-carbon projects entitled to issue carbon credits.

JP Morgan bought the company for $220 million in 2009 and delisted EcoSecurities. The U.S. bank sold it in 2013 to Mercuria.

“The idea is to restructure the company and prepare it to take part in this new phase of carbon and environmental markets,” Moura Costa told Reuters. He is using BVRio, a Rio de Janeiro exchange that trades green securities, as a vehicle in the deal.

Pablo Fernandez, who used to coordinate carbon trading at Mercuria and conducted the management buyout, joins Moura Costa in the deal. He will be the new CEO of EcoSecurities, with headquarters in Geneva.

Moura Costa believes there will be opportunities in the market for environmental assets in coming years. One example is the growing number of regional carbon markets, such as the ones in Turkey, China, Australia, South Korea and Colombia.

Compensations for carbon emissions from some sectors such as aviation and marine shipping are also promising, he said.

Besides carbon, he believes waste management will grow with some companies interested in green securities such as recycling credits to compensate for use of plastic or metal, for example.

Sustainable Investment Management, a boutique environmental finance firm (sim.finance), is advising EcoSecurities in the restructuring, Moura Costa said.

Reporting by Marcelo Teixeira in Sao Paulo; Editing by Matthew Lewis

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