CDM

1
CDM Functional Overview

• Senergy Global Pvt. Ltd.

2
About Senergy Global

• Provide end-to-end solutions in the CDM space.
  Right from PIN to end transactions.
• SGPL has got experience in developing renewables,
  energy efficiency and fuel switching CDM
  projects.
• Has registered 14 projects with the UNFCCC.
• Has a pipeline of more than 70 projects.
• Successfully traded transacted more than
  2million CERs/VERs/Off-Sets till date.
• Provides renewable energy related policy
  regulatory advisory services.

3
What We Do?

• Develop project ideas and carries out feasibility
  studies
• Prepare the Project Design Document (PDD) and the
  project Methodology, including baseline studies
  and monitoring plans
• Guidance (presentations and documentation) for
  Host country approval.
• Facilitate quicker and smoother approval by DOE
  in validation stage.
• Registration of the project with the CDM
  Executive Board
• Prepare monitoring reports for timely
  verification
• Issuance of the CERs
• Organise transaction of CERs

4
Credibility

• An associate of Suzlon, the largest Wind Mill
  manufacturer in India.
• Commitment of service and delivery.
• Reputed Clientele.
• Transparency is ensured in client dealings.
• Adherence to market responsiveness to chart
  favorable growth path for clients.
• Proven track record in registering projects

5
CDM The genesis

• United Nations Framework Convention on Climate
  Change (UNFCCC)
• Ultimate objective of stabilizing global
  greenhouse gas concentrations in the atmosphere
• CDM one of the flexibility mechanism defined
  under Art 12
• The Kyoto Protocol
• agreed to reduce greenhouse gases by 5.2 below
  1990 levels (2.8 to 4.8 billion TCO2e) in the
  commitment period 2008-2012
• Required ratification of 55 Parties representing
  55 of industrialized countries emissions (US
  constitutes 36 , while Russia is 17.4) for its
  entry into force
• Protocol is in force, since 16th Feb, 2005
  (ratification by Russia to cross the magical 55)
  

6
What is Carbon Credits or Finance ?

• Carbon finance, is nothing but an additional
  revenue stream emerging from a project based
  activity
• Passes the various additionality tests
• Meet all necessary compliances (viz. Kyoto
  Protocol)
• Has a positive sustainable development impacts
  for the host country

7
CDM India

• More than 600 projects approved by MoEF
• Total registered project globally844
• India 289(34)
• 32 MN CERs issued to Indian projects, out of
  about 94 MN total issued CERs

8
Percent of CDM Projects by Country
9
Costs involved in CDM Project

• Cost Related to the development of the
  conventional project
• Transaction Cost related to the registration of
  project with the CDM EB

10
Means of Finance

• Equity Financing
• Long Term Lending
• Venture Capital Scheme
• Lease Financing
• Project Financing

11
Transaction Costs

• Project Proponents additional investment to
  monetize the CDM Revenues
• It Includes
• Costs towards consultants for developing CDM
  project (PDD)
• Costs towards validation of the CDM project
• Costs towards registration of the CDM project
  with EB
• Costs towards monitoring of emission reductions
• Costs towards verification of CERs and
  transaction costs

12
Transaction Costs

• CDM EB deducts 2 of the CDM revenues to
  Adaptation fund
• Transaction costs varies between 5 to 25 of the
  total revenues depending on the type and size of
  the project

13
CER Prices

• Carbon market is expanding and volume of CERs
  expected to be transacted by 2012 is about 1.5
  billion
• Market Mechanism has kept the volatility of CER
  Prices
• Most of the CER transactions happen in the
  secondary market where the price range of 12 15
  Euros are in vogue.

14
Taxation Issues

• CERs may be accounted as an intangible asset
• CERs may be treated as the exported commodity and
  thus the various sops available for the exported
  products can be availed
• CDM revenue may be accounted as Other Income
  and hence normative tax can be applied
• India is probably waiting for some accounting
  model to be formulated by the Annex-I countries

15
CDM Risks

• Risks related to the registration of the project
• Upfront Payment of transaction costs
• Risks related to existence of market beyond 2012

16
Thank you

• Thank you
• Naveen S
• Sr. Manager
• Senergy Global Pvt. Ltd.
• 9th Floor, EROS Corporate Tower
• Nehru Place, New Delhi 110019
• ns_at_senergyglobal.com