Financing small scale

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Financing small scale community linked CDM
Projects
Abhijit Chatterjee eaga Energy India P
Limited Delhi, April 28 2009
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Contents

• Community level CDM projects
• Carbon for sustainable development
• Bundling Programme of Activities
• Financing
• Conclusions
• About eaga

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Community level CDM projects

• USP Assist in achievement of (local) sustainable
  development
• Opportunity Carbon revenues sustain projects
• Key Barrier CERs per project are low unviable
• Examples Micro hydro in Himalayas, passive solar
  housing in cold regions, solar PV in off grid
  areas, improved cookstoves

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Carbon for Sustainable Development

• High (and ever increasing) transaction costs
  discourages smaller scale community projects
• CDM design monitoring costs may not assist
  small CDM projects (lt 3,000 CERs pa)
• Uncertainty of carbon markets make planning
  difficult
• Prices 10.0 over past 2 years acts as
  incentive
• Small but growing number of buyers willing to pay
  the social price of carbon, not just market price

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Bundling

• Integrate several installations under 1 CDM
  project
• Needs a bundling organisation
• Functional status for individual members as an
  association etc
• Modalities on how CERs / VERs are to be shared
• Successes biogas, brick kilns, cookstoves
  (VERs), treadle pumps (CER / VER)

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Programme of Activities

• Service provider or public institution can
  initiate a programme to implement an activity
  that is additional
• Needs a CDM Programme PDD (PoA-DD) and CDM
  project PDD (CPA-DD)
• Allows numerous small initiatives (with single
  CDM methodology) to be eligible for carbon
  credits
• Can pave the future for community CDM projects

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Financing community CDM projects

• CERs sustainability
• Transaction costs vs CER revenues
• MV vs CER assurances
• Layer cake approach to financing
• Role of Voluntary Carbon Market solar PV,
  cookstoves, micro hydropower
• Sharing carbon risks donor, civil society and
  buyer
• Gold Standard voluntary compliance

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Financing ..

• Uncertainties???
• Post 2012
• Timing the CDM project
• Price volatility
• Carbon finance driven community projects
• Cookstoves
• Biogas
• As CER / VER prices rise, community CDM projects
  become more viable

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A Wish list for community projects.

• Trade off between social carbon and MV
• Why not compromise methodological rigour for
  sustainable development?
• Partial crediting the IIJ approach replicate
  for
• Cookstoves
• Biogas
• Passive solar architecture
• Price of CER Price at which project is
  sustainable

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Conclusions

• Community CDM projects can access carbon market
• Scalability is the key
• Next Kyoto phase promotes community projects
• Simplified approach, reduce transaction costs
  Financing CERs for OpEx
• Risk sharing a key factor for success
• The real CDM CC mitigation local sustainable
  development

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About eaga

• eaga UK a FTSE 250, listed green support
  services company
• eaga mission energy services to unable to pay
  communities a social enterprise
• Operates the largest home energy efficiency
  programme in the UK, among the largest in EU
• eaga India subsidiary of eaga UK
• Accredited ESCO (Bureau of Energy Efficiency,
  GoI)
• Active in 6 villages extending energy security
• Project based co-financing capability
• Focus on biogas biomass technologies

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Finally
Thank you!!