Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Asia CDM : Private sector perspectives N Y Dinesh Babu Asia Carbon International B.V CDM : lessons learned and future options 21 May 2005 Expectations from CDM CDM benefits (short, medium and longterm) vis-à-vis complexities Financial flow, technology transfer Sustainable development benefits Efficiency improvement, resource conservation Sectors priorities / preferential treatment Small scale projects Rural development oriented projects contd… Expectations from CDM Proactive role of FIs (dom.& int.) Improvements in investment climate – investors’ confidence Integration of carbon finance with underlying project finance High price levels for CERs Risk mitigation tools Financial models for high SD rural projects Expert poll conducted by Point Carbon (www.pointcarbon.com) While CDM is a means of increasing the return on investment, it will rarely change a bad investment into a good one as long as carbon prices are low. Therefore, the CER stream is rarely the most important factor deciding whether a CDM investment is sound or not. It is just the glazing of the cake. It is much more important that a potential project is economically and financially sound as such. The investment question Investment from Annex I not forthcoming So is Technology Transfer CER : mere purchase without ownership CER price : low to influence an investment decision Unilateral CDM - inevitable The investment question...contd Mainstream financing is yet to formally engage in CDM transactions. CER revenues yet to be recognized by FIs for leveraging financing Low awareness levels and skills Low CER revenues Bilaterals’ & Multilaterals’ funding for PDD development : no guarantee for purchase of CERs ! Leading to………. Only companies with strong balance sheet have access to finance Inability of other promoters to bring in equity and to raise loans Lack of development of project ideas and promoters for small community projects Challenges #1 Environmental integrity vs stimulating project development #2 Project portfolio and sustainable development Possible solutions #1 Accelerate integration of private sector perspectives in the CDM decision making process #2 Influence FIs to leverage and innovate financial tools #3 Channelize SMEs efforts to contribute to mitigating climate change (+ sectoral CDM) #4 Orientation of grass root NGOs in ensuring and propagating the integral element of climate change : sustainable development The Asia Carbon Group “Total carbon solutions” Capacity Building •Region specific focussedCapacity focused Capacity Building. •Backed by clearly defined pilot projects •Development of local expertiese expertise Project & Carbon Advisory ACaDF™ •Identification of CDM project opportunity •Evaluation & Initial documentation • Preliminary CDM due diligence Project / Carbon Finance •On approval – assisting with the fund raising •Carbon Asset Management. •Effective structuring of the investment •Complete alignment of interests – there is no scope for conflicts of interests. •ESCO model in case of energy projects •Framing the PIN •Mentoring service for local consultants •Set up up Local LocalCenter Centerofof Excellence Excellence qPDD expertiese qPDD expertise qLocal q LocalOE OE– operating operatingatat local costs local costs •Pitching to investors •Framing the PDD •Taking the project thru the whole approval / certification process ACX-Change™ •VC + incubation model – hand hold the local developers • Portfolio / mutual fund approach provides better valuation + scope for non performance insurance. •A Win-Win solution •Lowest Transaction costs in the sector Asia Carbon Fund™ •Manage CDM related investments into Asia •Set up project execution + Management team •Advantages – Adequate safe guards – Quality management – Complete transparency – Exit option after harvesting CERs – Return on investment to cover cost of funds + premium for risk – Structured finance – to optimise local debt component Complete Carbon Solution Project finance Advisory & syndication CER Trading Baseline study Low Medium High Product/market attractiveness Fund Management Venture Project finance & Mgmt. documentation Carbon Advisory Medium Low Competitive position Project Carbon Advisory High The Asia Carbon Group “Total carbon solutions” Carbon Trading Propeller for future growth – The Complete Carbon Solution Thank you N.Yuvaraj Dinesh Babu Head, Climate Change Asia Carbon International B.V (Incorporated in The Netherlands) 150, Cecil Street, #10-03 Singapore-069543 Ph:+65 62251791 Fax:+65 62251562 [email protected] www.asiacarbon.com