When Ecopower Ltd., a Sri Lankan company that builds and operates small hydropower projects, wanted to claim from the Clean Development Mechanism (CDM) the certified (greenhouse gas) emissions reduction credits (CERs) that are associated with its projects, the firm contracted with IRG to perform three essential activities:

• Undertake all the necessary analysis and documentation to apply and gain registration of their hydropower projects with the CDM;
• Facilitate the subsequent certification of the CERs with the CDM Executive Board (CDM-EB); and
• Market the CERs generated by the project including negotiate an Emission Reduction Purchase Agreement (ERPA) with potential buyers.

IRG successfully obtained CDM EB registration for three small hydropower projects in October 2005 and negotiated a long-term ERPA with the International Finance Corporation, Netherlands Carbon Fund (INCAF).

Under the flexible mechanisms allowed by the Kyoto Protocol, developed countries with mandated emissions reduction targets can either reduce emissions within their national borders or invest in carbon reduction projects in developing countries (often the cheaper option). In this instance, Sri Lanka 's use of hydropower to produce power for the national grid displaces fossil fuel-based power and associated carbon emissions. INCAF has contracted with Ecopower to buy 800,000 tons of CERS over a 10-year period. These CERs will be transferred to the Government of Netherlands for use towards meeting its emissions reduction target under the Kyoto Protocol.

IRG is presently working on several other similar projects to earn their owners CER when possible.