MANILA, Philippines—The World Bank signed Thursday an agreement with Land Bank of the Philippines to purchase carbon credits for a project that will reduce greenhouse gas emissions from landfills and livestock farms in the country.

The total value of the emission reduction purchase agreement (ERPA) is 2.437 million euro over a three-year period starting this year, with Land Bank as the project’s implementing body, said its president and chief executive Gilda E. Pico.

The project offers incentives for piggeries and landfill operators to adopt cleaner technologies that capture methane, which accounts for one-third of highly potent greenhouse gas emissions in the country, said World Bank country director Bert Hofman.

Piggeries and landfill operators will be encouraged to use methane as fuel to generate electricity that will substitute for grid electricity generation mainly supplied by power plants using fossil fuels, Hofman added.

The certified emission reductions (CERs) derived from these methane-reduction projects under the clean development mechanism (CDM) framework of the Kyoto Protocol will be purchased by the World Bank on behalf of the Spanish Carbon Fund to encourage investments in green technologies and business models that address climate change.

Under CDM, industrial countries finance projects for reducing carbon emissions in developing countries such as the Philippines and receive credits for doing so.

As the financial intermediary for the project, Landbank will establish subproject agreements with local government units, private piggeries, project developers and service providers to acquire CERs for subsequent sale to the World Bank, said Pico.

Hofman said the methane recovery project will have a "programmatic approach" in providing carbon finance, a departure from a conventional approach in which CDM projects are processed individually.

"Individual projects, while important, produce small volumes of emission reductions and benefit only a few players. The use of a programmatic approach allows multiple projects to be combined under one institution or intermediary, thus generating significant impact and benefiting more players including poor communities," Hofman explained.

"Initiatives like these not only mitigate climate change while contributing to sustainable development; they also help achieve cleaner air and a cleaner environment, thus improving the quality of life of many Filipinos," Hofman said.

The project will also assist the introduction of cleaner technologies to manage the 14 million tons of solid waste and 22 million tons of organic wastewater produced annually in the country.