6th 7th December 2006, Beijing 20061267

1
6th / 7th December 2006, Beijing??2006?12?6?7?
CDM in China Opportunities for Sino-German
Cooperation????????????????

• Mr. Arne GoossDirector KfW Office Beijing
• ????????(KfW)?????????
• ??? ??

2
KfW Bankengruppe at a glanceKfW??????

• Promotional bank of the Federal Republic of
  Germany.
• ????????????
• Founded in 1948.
• 1948???
• Shareholders Federal Republic of Germany (80),
  German federal states (20).
• ?????????80,??????20
• Balance-sheet total at the end of 2005 EUR 341
  billion.
• 2005??????3410???
• 3,500 employees at the end of 2005.
• 2005???????3500?
• Rating AAA/Aaa/AAA.
• ???A

3
Brand Structure.????
????????
????
???? ? ????
??????? ?????????
4
KfW Bankengruppe in China China Track Record
since 1980 9 billion Euro ??1980??????????90?
??
5
KfW Carbon FundObjectives of the Fund. ?????

• Background ??
• European Emissions Trading System (ETS), Linking
  Directive
• ?????????(ETS)?????
• National Allocation Plans ??????
• compliance strategies of affected companies
  ?????????
• Provide a service instrument for German and
  European enterprises wanting to use
  project-based certificates for compliance
  purposes ????????????????????????????????
• alternative to own measures and emissions
  trading
• ?????????????
• no internal capacities required ?????????
• risk mitigation by diversification ?????????

6
KfW Carbon FundFund Concept. ?????

• Purchase programme (Buyers Pool) for
  project-based certificates ???????????????
• Purchase of compliance tools for the ETS (CERs,
  ERUs, project-based EU-Allowances)?????????(ETS)??
  ????(?????,?????,??????????????)
• commercial orientation ????
• KfW purchases as a trustee for participants
• KfW??????????????
• in its own name, for the account of
  participants????????????
• on the basis of individual Agency Contracts
  between KfW and each participant??Kfw??????????
  ?????
• long term off-take contracts with suppliers of
  certificates (ERPA) ????????????????(??????)
• up to 2012 with option to extend 2012???,??????
• payment on delivery pre-financing by KfW on a
  case by case basis???????????????????

7
KfW Carbon Fund Contractual Structure. ????
Participant 1 ?????
Project 1 ???
KfW Project Portfolio ???? (KfWCarbon
FundKfW???)
ERPA??????
Agency contracts ????
Project 2 ???
Participant 2 ?????
Project 3 ???
Participant 3 ?????
Project n ??n
Participant x ????x
8
KfW Carbon FundFund Volume. ?????

• Fund volume ????? EUR 84 million, 8400 ???
• KfWs contribution from own funds KfW ????
  EUR 10 million, ?? 1000 ???
• German Government (seed money) ????(????)
  EUR 4 million, ?? 400 ???
• Acquisition of participants ??????
• 1st tranche closed end of April 2006
  ?????????2006???
• Second tranche in preparation????????
• target volume of EUR 80 100 million
  ????8???1???
• Launch of second tranche ???????? Q1 / 2007

9
KfW Carbon Fund Purchase Contracts (I). ????(I)

• Long-term purchase agreement (Forward
  contract) ??????(????)
• KfW will buy in its own name (AAA
  Buyer) KfW????????(?A????)
• Guaranteed minimum offtake quantity
  ?????????????
• Contract period up to 2012 with option to
  extend ????2012?,?????
• Market-based pricing (fixed or variable
  pricing)
• ??????(?????)

10
KfW Carbon Fund Purchase Contracts (II). ????(II)

• Delivery options ????
• Early delivery option for seller ? early
  fulfillment of contract option to sell surplus
  amounts in later years in the market ???????????
  ??????
• Right of first refusal for buyer on Additional
  and Future Credits ???????????
• Payment arrangements ????
• Payment on delivery as a rule ????????
• Prefinancing on a case by case basis
  ???????????????

11
KfW Carbon Fund / KfW ????????? Investment
Policy. ????

• Eligible Project Types ???????
• Generally there are not specific limitations
• ?????????
• Exclusions in line with Kyoto and ETS
• ????,?????????????????, ???
• nuclear power projects ????
• large hydro power projects (as per objectives of
  World Commission on Dams) ??????(????????????)
• until further notice LULUCF-activities????????????
  ????????????

12
KfW Carbon FundProject Selection Principles.
??????

• Objective ??
• building up a balanced project portfolio under
  the aspects of risk and return ??????????????
• investment grade project portfolio
  ????????
• Main criteria ????
• delivery risk (project, country, counterparty,
  Kyoto)????(???????????????)
• price per ton of CO2e ??CO2e???
• transaction costs (normally minimum of 50,000
  t/pa CO2e per transaction bundling possible)
  ????(??????????50,000 t/pa CO2e ????)
• preparation status (delivery from 2008 at the
  latest) ????(??2008???)

13
KfW Carbon FundTime Schedule. ??????

• official launch (Floating of first CDM-tender)
  ???? June 2004, 2004?6?29?
• present status ????
• more than 200 project proposals received about
  30 projects shortlisted
• ??200?????????30?????????
• four ERPAs and six LoIs signed
• ???????????
• sectors renewable energies (hydro, wind,
  biomass) and methane abatement (land fill,
  mine gas) ???????(??????????)?????(?????????)
• countries China, Brasilia, Egypt, Nepal, India
  ???????????????????
• conclusion of further ERPAs until mid
  of 2007
• ?????????? ??2007???
• delivery of certificates until 2012
  ???? ???2012?

14
The KfW Carbon Fund???????????
For more information ???????????
www.kfw.de/carbonfund
Mr. Arne Goos ??? ?? DirectorKfW Office
Beijing ????????????????? 1170, Sunflower
Tower 37 Maizidian Street Beijing 100026
China????????37?????1170 100026 Tel. 86
(10) 8527-5171 Fax [phone] kfwbeij_at_pub
lic3.bta.net.cn

• Mr. Bernhard Zander Bernhard Zander??
• First Vice President ?????
• KfW Carbon Fund ???????????
• Palmengartenstrasse 5 9
• 60325 Frankfurt ????
• Tel [phone]
• Fax [phone]
• carbonfund_at_kfw.de