Vulnerability Reduction Credits: An introduction for project developers and investors

This introduction to VRCs is intended for project developers and investors. HGF intends to prepare
other introductions including a more general one for communities, another for policymakers, and a
more technical document for VRC methodology developers, auditors, and VRC advisors.
What are Vulnerability Reduction Credits?

A VRCâ„¢ is a Vulnerability Reduction Credit with a nominal value of EUR50. Issuance of the number
of VRCs for a particular project is a function of the avoided impact cost (vulnerability) of such
project. Hence, efficient vulnerability reduction projects are characterized by a market value of the
VRCâ„¢ of below EUR50, matching the return expectations of a project developer/investor in the
vulnerability reduction project. Lower income communities will earn more VRCs by applying to
projects an Income Equalization Factor (IEF).

Interest Topics: