DER SPEZIALIST FÜR PUBLIC CONSULTING

GIS from the perspective of a governmental Buyer – Experience & Expectations

The Austrian JI/CDM ProgrammeBirgit Haberl

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DER SPEZIALIST FÜR PUBLIC CONSULTINGABTEILUNG

29.09.2008

I. Introduction to the Austrian JI/CDM Programme

II. GIS Experience

III.GIS Requirements and Expectations

Agenda

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DER SPEZIALIST FÜR PUBLIC CONSULTINGABTEILUNG

29.09.2008

Kommunalkredit Public Consulting (KPC)

Vienna

Employees: 57

Management of:- Austrian JI/CDM Programme, EUR 531 Mio.- Austrian Climate and Energy Fund - Federal environmental support schemes in A & abroad - Austrian Development Agency coop. in CEE

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DER SPEZIALIST FÜR PUBLIC CONSULTINGABTEILUNG

29.09.2008

GIS

Austrian JI/CDM Programme - OverviewRepublic of Austria

Federal Ministry of Agriculture, Forestry, Environment and Water

Management

Austrian JI/CDM Commission

Federal Minister

of Agriculture, Forestry, Environment and Water

Management

EUR 531 Mio.EUR 531 Mio. Application

Recommendation

Approval

Current PortfolioManagement of Austrian JI/CDM Programme by KPC

Sourcing of eligible projects

Funding Contracts for Project Development

Negotiation and Conclusion of ERPAs

Recommendation to Austrian JI/CDM Commission

Marketing & Stakeholder Relations

ERPA Administration

Portfolio Monitoring

Payment on Delivery

max. 50% Prepayment

Risk Management

Volume Target (2008-2012): 45 Mio. t COVolume Target (2008-2012): 45 Mio. t CO2e2e

3 Facilities 5,45 Mio. t

1 Fund USD 5,00 Mio.

Type Volume (t CO2e)

17 JI 7,3 Mio. 51 CDM 29,2 Mio. 36,5 Mio.

Current Portfolio

IndividualJI/CDM Projects

Carbon Facilities/Funds 1 GIS 2,0 Mio. t

DER SPEZIALIST FÜR PUBLIC CONSULTING

II. GIS Experience

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DER SPEZIALIST FÜR PUBLIC CONSULTINGABTEILUNG

29.09.2008

GIS Experience (I)

- GIS offers more flexibility to the host country and the investor country compared with JI

- GIS offers the chance for revenues “up front” (after delivery of AAUs but before delivery of greening results)

- There is a lot of preparatory work to accomplish in the host country before agreement on a binding contract can be reached

- Art. 17 eligibility- legislative background, authorization to negotiate and sell on behalf of

the host country- implementation of GIS management facility with sufficient capacity and

resources- project/programme potential and pipeline- secondary legislation/tender documents (project selection process and

criteria)

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DER SPEZIALIST FÜR PUBLIC CONSULTINGABTEILUNG

29.09.2008

GIS Experience (II)

- GIS is less standardized – contracts are tailored to the specific needs of the involved parties

- Negotiations take longer than for JI/CDM deals and almost always longer than expected

- AAUs are a politically sensitive asset – there are reputational risks for both Seller and Buyer country (activities are closely watched in the market)

- This risk can be mitigated by high quality GIS scheme, maximum transparency and coordinated and joint communication

DER SPEZIALIST FÜR PUBLIC CONSULTING

III. GIS Requirements and Expectations

929.09.2008

DER SPEZIALIST FÜR PUBLIC CONSULTING

GIS Requirements & Expectations (I)

- Hard greening (money needs to be used for supporting projects/programmes that lead to direct and quantifiable GHG emission reductions)

- Certain percentage of purchase price may be used for soft greening in terms of raising public awareness to ensure the efficiency and market penetration of the direct GHG emission reduction measures

- Certain percentage of purchase price may be used for administrative costs of GIS management facility

- Other environmental benefits (reduction in air, and water pollution etc.) and positive social impacts are welcome and provide additional incentive for buyers

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DER SPEZIALIST FÜR PUBLIC CONSULTING

GIS Requirements & Expectations (II)

- Results are required to be monitored according to certain standards (in line with project size)

- Traceability of Funds is essential (special budget line, managed disbursement of funds, escrow agent, auditing of reports etc.)

- Reporting requirements and supervisory function of buyer

- Clear and fair AAU-PA based on equal footing and risk sharing including (i) clear milestones with regard to spending funds for eligible projects/programmes and greening results and (ii) agreement on measures and remedies in case of non-compliance with milestones

- Not AAUs are the asset but “greened AAUs”

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DER SPEZIALIST FÜR PUBLIC CONSULTINGABTEILUNG

29.09.2008

Austrian JI/CDM Programme www.ji-cdm-austria.at