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21 December 2021 News

Kvika and Klappir establish a fund towards carbon neutrality

Banking firm Kvika, Kvika Asset Management and Klappir Green Solutions have signed a letter of intent for the establishment of a fund with the aim of accelerating Iceland's carbon neutrality.

By Lára Sigríður Lýðsdóttir

The fund will create a platform for investors to invest in land reclamation, which will include mitigation measures for climate change. The reclamation will initially focus on certified forestry along with other measures, such as wetland restoration and land use emissions, in parallel with the generation of certified carbon units.

The aim of the fund is to invest in land improvements that generate certified carbon units which can be registered in the Climate Register and count towards Iceland's international obligations regarding climate issues. The land improvements planned with the establishment of the fund are profitable, job-creating and support the transformation of agriculture. The fund seeks to support the three pillars of sustainable development: economy; society; environmental and climate issues.

On its creation, the fund will also take into account the United Nations’ Sustainable Development Goal 17 and promote cooperation and collaboration between stakeholders (public sector, private sector and the general public) and extend support to projects that contribute to sustainable social development.

The letter of intent states the common will of the parties to work on analysing the operational efficiency of such a fund and to identify the main work components necessary for an effective implementation. Finalised details of the project will be available in early 2022.

Jon Agust Thorsteinsson, CEO of Klappir Green Solutions: A large proportion of the greenhouse gases emitted into the atmosphere are due to the decline of ecosystems. Land reclamation can bind carbon, redistribute water, protect and build up soil, purify air, provide shelter and strengthen habitats for many organisms. Land reform also includes important business opportunities, including certified carbon units, which will be a valuable resource that can be sold on international markets. Innovation in green industry, finance and agriculture will be one of the cornerstones of the project.

Marino Orn Tryggvason, CEO of Kvika: Climate change is without a doubt the most important task of our generation, and I believe that the private sector is well placed to find sensible solutions. Initiatives such as the Climate Fund can be a sensible and profitable way for investors to make an impact. Iceland is at the forefront of renewable energy and can also become a leader in climate change. If successful, climate projects can become an important export industry in the future.

Hannes Frimann Hrolfsson, CEO of Kvika Asset Management: A race has begun to reach global carbon neutrality, and it is clear that this goal will not be achieved unless the private sector contributes and works together. The parties to this letter of intent are committed to examining the viability of this new fund, which has the potential to make an important contribution, including a real and measurable impact on the state of the climate in Iceland.

By Lára Sigríður Lýðsdóttir21 December 2021

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