Green Investment Scheme in Bulgaria

1
Green Investment Scheme in Bulgaria

• Christo Christov, Energy Institute, Bulgaria
• Workshop
• Facilitation Green Investment Scheme
• first lessons learnt and the way forward
• April 24-25, 2008, Budapest, Hungary

2
Opportunities for Bulgaria

• Surplus of AAUs
• Potential for Bulgaria to trade AAUs
• Approximately 30 mill t CO2 e / year
• Potential for Greening AAUs in Bulgaria could be
  75 million tons of CO2e Emission Reductions for 5
  years period

3
Potential of Bulgaria to realize ER

• District heating cogeneration 50 mill t CO2
• Energy efficiency 11 mill t
• Renewable energy 7 mill t CO2
• Waste management 3 mill t CO2
• Fuel switch 3 mill t CO2
• Forestry 2 mill t CO2
• Total about 75 mill t CO2

4
Benefits for Bulgaria

• Additional financing sources compliance with
  commitments and real projects
• Additional flexibility compared to JI projects
• Avoidance of EU ETS Double accounting of the
  Emission Reductions
• Achievement of emission reductions in the most
  efficient manner

5
WB Study for Bulgaria on GIS, 2004

• confirmed the feasibility of a GIS
• recommended various options for establishing and
  implementing a GIS
• received favorably across the various sectors and
  Ministries - seminars, comments
• recommended a multi-sectoral investment program
  under the GIS

6
In early 2005 the BG Government was committed to
moving forward with a GIS as quickly as possible

• The Government promised
• to take all necessary measures to implement GIS
• to work with multilaterals, bilateral agencies,
  private sector and local stakeholders in this
  regard
• to design the GIS to use flexible financial
  instruments to provide support for eligible
  projects soft, hard, JI

7
AAU-based Green Investment Scheme understanding
in Bulgaria (2004 -2005)

• Long term financing facility which links transfer
  of AAUs through 2012 with emission mitigation
  activities and projects through and beyond 2012
• Selling country to assure buyers that proceeds
  from sale of AAUs would be used to finance agreed
  Green Investment Scheme (GIS) and adopt suitable
  monitoring and verification measures
• Buying country(ies) to provide financing for GIS
  per the terms of contract

8
Bulgaria GIS Study, 2004 - Findings

• Bulgaria is well positioned to establish a GIS
• GIS can be implemented without requiring new
  law(s)
• Establishment of a GIS can proceed without delay
• Central heating, waste management, energy
  efficiency, have potential for producing emission
  reductions of 50-60m tones between 2005-2020
• Forestry can also produce large benefits
• Bulgaria can offer an attractive GIS (with an
  initial consideration for sale of AAUs around 25
  million tons in first tranche)
• See full report at www.moew.government.bg

9
(No Transcript)
10
(No Transcript)
11
GIS Considerations for Bulgaria 2005

• GIS structure should cover all management costs
  without depending on government budgetary
  resources
• GIS should be flexible to ensure financing of
  public/private sector projects and PPP
  initiatives using market friendly instruments
• GIS should be flexible to accommodate bilateral
  and multilateral negotiations and preferences in
  implementation

12
GIS Recommendations, 2005

• Bulgaria is the most attractive JI Country and is
  the pioneer in formulating a GIS backed AAUs
  (Point Carbon)
• Establishment of a GIS with an initial size of
  euro 250 to 350 million is feasible
• Existing ECO Trust Fund with good track record is
  an attractive option to set-up and manage GIS
• Additional Fund Management support to ECO Trust
  Fund through experienced commercial banks which
  can raise new financing and also provide own
  financing
• Establishment of an AAU Management Function which
  coordinates all activities involving AAUs

13
Proposal of WB Group for Assistance

• Facilitating discussions and negotiations between
  the government buyer(s)
• Assist with the establishment and launching of a
  complete GIS framework that meets buyer(s)
  requirements and Bulgarias needs
• Financial assistance to GIS in the form of loans
  and/or guarantees
• Technical Advisory services for GIS
• Capacity building for Art.17 eligibility

14
Closing The Compliance Gap

• EU countries, Canada and Japan have expressed
  interest in AAUs only as long as the investments
  are linked to emission reduction activities
  (Greening AAUs)
• The requirement for Greening of AAUs would reduce
  the amount of AAUs that can be offered
  substantially - by as much as 50 or more

15
Bulgaria 2005 - 2008

• Nothing was done for establishment of GIS
• WHY?
• The current Government considers AAUs trading
  applicable without greening
• GIS would just limit the freedom of the
  Government to utilize the proceeds from AAUs sale
  for other than emission reduction purposes
• AAUs banking for the next (2013 2020) period is
  considered as well.

16

• THAK YOU FOR THE ATTENTION !!!