Presented by

U Htun Naing AungChairman/CEO

KKS Engineering Co.,Ltd

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Agenda

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“CDM” Hydro Power Project vkyfoifhovm; ?

CDM \ t&if;tNrpf Global Warming

Seasonal surface Seasonal surface melt extent on the melt extent on the Greenland Ice Sheet Greenland Ice Sheet has been observed has been observed by satellite since by satellite since 1979 and shows an 1979 and shows an increasing trend. increasing trend. The melt zone has The melt zone has been expanding been expanding inland and to record inland and to record high elevations in high elevations in recent years.recent years.Source: Impacts of Arctic Warming, Cambridge Press, 2004

The Evidence of Global WarmingThe Evidence of Global Warming

EVIDENCE

There is no longer any doubt that the ecosphere is warming up due to human activity

Problem OneGlobal WarmingGlobal Warming

Global Warming

Climate Change

Climate Change Lives

Changing Wind Map due to the Climate ChangeThere are a lot of proven records that the air flow direction and pattern are changed in many different places due to the global warming and climate change. For nearest example of “Nargis” in Myanmar in 2008

!!!!!

Cyclone (Nagis,2008)Whom we have to blame?

Is Global Warming Nature

or Man Made?

“Global warming is the greatest threat facing the world today – far greater than the threat from terror”

Source: Sir David King, chief advisor to the British government, Dagbladet Information, Denmark, 10. Jan. 2004

Responses from Experts: Global Warming PreventionProject

“Obstruction of Global warming reduction Project by preventing Conference Delegate to attend the Renewable Energy Conference is the same threat facing us– like the threat from terror”

Source: Mr. Htun Naing Aung, Chairman/CEO Kaung Kyaw Say Engineering Co.,Ltd AEBF2008 Thailand Aug.6, 2008

CDM Greenhouse Gases

GHGGlobal

Warming Potential

Market Value (at $10 per TCO2e)

Sources

Carbon Dioxide 1 10 Fossil fuel combustion, deforestation,

agriculture

Methane 23 230Agriculture, land use change, biomass burning, landfills

Nitrous Oxide 296 2,960 Fossil fuel combustion, industrial, agriculture

HCFC 1300 13,000 Industrial, manufacturing

PFC 6500 65,000 Industrial, manufacturing

SF6 23900 239,000 Electricity transmission, manufacturing

Green House EffectKyoto Protocol

Global Warming

High Oil PricesDepleting Fossil Fuel

BiofuelBiofuel

Renewable EnergyBiofuel

Renewable EnergyBiofuelBiofuelRenewable Energy

BiofuelRenewable EnergyRenewable Energy BiofuelRenewable Energy

Green House Effect Kyoto ProtocolGlobal Warming

High Oil Prices Depleting Fossil Fuel

The Benefits of ElectricityThe Benefits of Electricity

The Energy The Energy Security & Security &

the Benefits the Benefits of of

ElectricityElectricity

ELECTRICITYLight Bulb Radio / TV Refrigerator AC / Fan Stove / Oven Pump

Reading Light SpaceLight Video / Sound FoodPreservation Space Cooling Heat for Cooking Water Pumping

EDUCATION ENTERTAINMENT /COMMUNICATION HEALTH COMFORT /CONVENIENCE PRODUCTIVITY

APPLIANCES

INTERMEDIATE OUTPUTS

FINAL OUTPUTS

The Benefits of ElectricityThe Benefits of Electricity

17/09/54 19

Why Nuclear?Why Nuclear?Contributes significantly to world electricity generationReduces dependency on high priced oil and gas

Reduces greenhouse gas emission

Provides more overall benefits than other energy sourcesLow production cost, US$0.02/KW produced by nuclear power compare to US$0.12 with fossil fuel

Nuclear power is the best optionfor recent situation

17/09/54 20

Why Not Nuclear?Why Not Nuclear?High Investment Cost US$ 2million/MW

Accompany byMajor issues against nuclear power include

Safety Radioactive Waste

and

Weapon Development

Tsunami, FukushimaTsunami, Fukushima

In terms of Usage and Investment

No. Source of Energy Usage Investment Remarks1 Solar Energy Only day time useable High Battery needed

2 Wind Energy Depends on windSpeed and direction

High/Moderate

Battery needed

3 Tidal Power Depends on wave, flow and tide

High High cost in transmission line.

4 Water TurbineHydro Power

Depends on water head

Highest Need a good Dam

5 Biogas Difficult to collect Moderate Suitable to the bio waste farm.

6 Bio fuel Depends on crops need processing

High/Moderate

Still researchstage(ethanol mix)

7 Biomass(Gasification)

Any time, Any where, Any Capacity

Cheapest EnvironmentalFriendly.

The Comparison Among Energy Security & RisksIn terms of Risks and Investment

No. Source of Energy Risks Investment Remarks1 Hydro Power Disaster causes by

flood.High Need further study

on environmental impact assessment and a good Dam

2 Bio fuel The Weather /Depends on crops /Need processing

High/Moderate

Still researchstage(ethanol mix)

3 Biomass(Gasification)

CO & CO2 emission for improper handling

Cheapest EnvironmentalFriendly.

4 Gas Turbine Depleting of Gas High Still have own natural gas.

5 Nuclear Power High risk to the workers and all neighbors.

High Need a lot of time and professioncy

Kyoto Protocol Art. 6, 12 and 17

3 Mechanisms

CDM JI ET

Convention(Art. 3.3, 4.2 (cooperate, jointly))

Art12KP (CDM)| Origins

The Clean Development Mechanism (CDM)

DevelopedCountries

DevelopingCountries

Carbon Credits exchange

Objectives:

• Emission-reduction compliance

• Higher economic growth

Objectives:

• Climate-friendly technology

• Sustainable development

CO2

Developing countries (Non-AI)→To assist in achieving sustainable development

Industrialized countries (AI)

→To assist in meeting their emission limitation commitments

What is the CDM| Incentives

CDM project agreement

Project participants(private business, governments, NGOs)

26

Certified Emissions Reductions

a) Represents GHG mitigation contribution of a project.

b) Measured in tones of CO2. CERs from a CDM project are calculated as:

CERs = Baseline Emissions – Project EmissionsThe baseline is the amount of GHG that would be emitted in the absence of the CDM project.

c) CERs can be sold in exchange for hard currency.

d) Reduction before 2008 (1st year of Kyoto Protocol commitment period) can be included.

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N0 Type Description

1 Renewable energy Hydro, Wind, Solar, Biomass

2 Fuel Switching Fossil Fuel to Green Fuel

3 Energy Efficiency In Boiler, Pump, Turbines, Efficient Cooling

4 Cogeneration Both in Steam & Power Requirement

5 Power Sector Efficient (thermal) reduction in technical T&D Losses

6 In Waste Management Capturing methane emission to generate power, waste to energy

7 In Transport Fuel switch from gasoline & diesel to natural gas, air to train, road to train

8 In Forestry Afforestation and Reforestation Project

Potential CDMs in MyanmarAfforestrationAgricultureHydroMethane avoidanceBiomassCoal bed/mine methane etc

CDM Project Development

Potential CDM Sources Energy, Forestry, Industries, Agriculture & Waste

Emission AvoidanceGHG Removal or Reduction

743 CDM project activities registered, • 63.5 million CERs Issued• expected: 996.5 million CERs until 2012

More than 1,000 activities in the CDM pipeline (incl. above),- more than 1,200 million CERs expected by end of 2012(assumption: no extension of crediting period)

Score Board | CDM in the world

Status: July 2007

Global CDM Project Registration

CER Issued

No CountryRegistered

Project Numbers

Estimated AnnualEmission Reduction (t/Co2 e)

1 Myanmar 0 02 Lao 1 3,3383 Cambodia 4 124,3564 Bangladesh 2 169,2595 Thailand 49 2,749,6926 Vietnam 59 3,167,6107 Indonesia 67 6,600,000

Registered Project Numbers by Countries

GHG

t

“What would have happened” situation (scenario)

CDM project activity

CERs

How CER calculate

How Carbon Credits are Formed

Time

BaUCDM

CO2Emissions

Time

BaUCDM

CO2Emissions

How Carbon Credits are Formed

Benefits to Myanmar and Project Owners

By selling CER/VER, project owners can be compensated financially by developed countries for their contribution to emission reduction

Brings funds and foreign investment to Myanmar through developing energy saving and emission reduction projects

Support from international NGOs, governments and other organizations for capacity building in CDM development

Technology transfer and support from developed countries

CDM Project Timeline

20092008<< 2007 2010 2011 20122nd CP?

2013 >>CDMProjectDevt.

Production & Delivery of CERs

1st Kyoto Commitment Period (CP)

Offset Sale Beyond Kyoto Or Ex-Kyotomarkets

Agenda

How Can Carbon Credits Enhance Project Viability?

Applications of Carbon Revenues to Traditional Energy Projects

• Enhancing revenues or yields• Securing interest or principal payments • Shortening the loan term • Source of equity requirement

Using Carbon Revenues as a Source of Equity Requirement

Upfront Payment forForward Sale of

CERs

CERs as Equity for Loan

Loan Approval subject to

Equity Requirement

Project Proponent

CER Buyer

Investor

Using Carbon Revenues as a Source of Loan Prepayments

Loan Prepayment

SinkingFund

Loan Interest and Principal Payments

CER Revenues

Project Proponent

CER Buyer

Investor

CERs

42

Wind Power ProjectWind Power Project

Plant Configuration- 15 x 1.65 MW

Plant Capacity - 24.75 MW

Annual Generation - 74,482 MWh

43

Phase IPhase I

CO2 - 48,780 tons/year SO2 - 802 tons/year

which would have otherwise been emitted from a typical fossil-fueled generating plant

Environmental Benefits:Environmental Benefits:

CO2 Cost/tonCost/ton Cost/yearCost/year

((2525MW) MW) 48,780 x 10US$ =487,800 US$Micro-hydro power generating plant can be installed at

10 villages

Financial Benefits:Financial Benefits:

CDM Project in Myanmar - A Case StudyDapein(1) Hydropower Project in Union of Myanmar

Project Title Dapein(1) Hydropower Project Grid Supplied South China Power GridProject Owner Dapein(1) Hydropower Co., LtdLocation Bhamo county, Kachin state, Union of MyanmarInstalled Capacity 240MW (60MW×4)Annual electricity generation 950,289.6MWhConstruction starting date 26/06/2008Project commission dateAnnual emission reductions 677,937CO2ePrice of CERs (expected) 7 EUR/tCO2e or 10US$/tCO2eAnnual Income from CDM(expected) 4,745,559 Euros 0r US$ 7.779,370

Potential Revenue from CERsNo Name Location Capacity

(MW)

Annual ElectricityGWh

Expected FB(US$)Based on 10$/tonCO2

1 Mone Sidoktaya MagweDivision

75 330

2 Paunglaung N-E of Pyinmana 280 911

3 Yenwe Pago Division 25 123

4 Ye New Pago Division 25 123

5 Kha Paung Pago Division 30 120

6 Ka Paung Oaktwin, Pago Division 30 120

7 Kengtawng Moenw, Shan (S) State 54 377.6

8 Shweli 1 Shan (N) State 600 4,022

9 Ye Ywa Mandalay 790 3,550

10 Shwe Kyin Pago Divison 75 330

11 Kun Chaung

Pago Division 60 402

TOTAL 2,044 10,408.6 74,214,000

Agenda

How Does KKS Work With You?

47

Project development

Project implementation

Certified Emissions Reductions (CERs) issuance (Carbon Trading)

CDM Process

ProjectDesign

DocumentValidation Registra

tionMonitori

ngVerificat

ionCertifica

tion

CER issuance

and registrat

ion

HostCountry

Confirmation

DesignatedOperational

Entity

•Conducted by project participants

•Provides basis for verification

•Assurance by a DOE

•Certifies the amount of verified reduction

• Issuance of Certified Emission Reductions (CERs)

•To be recorded at EB registry

• Conducted bya DOE (Different DOEexcept forsmall projects.)

• Determines that the monitoredemissionreduction hasin fact occurred

Project Development Project Implementation

Meth PanelSubmission Executive BoardRecommends for:-approval/consolidate-re-consideration-non-approval Agrees to:-Approve/consolidate (A)-Re-consideration (B)-Non-approval (C)

Made by PPs (through DOEs)

Methodologies| Process the basics

Public input / desk review of submission and public input

Types of CDM projects Number Percentage (%) kCERs 2012

kCERs

Hydro 970 30.21 95182 299275Wind 667 20.77 67198 214958Methane avoidance 380 11.83 14270 69692Biomass energy 368 11.46 23372 111626Landfill gas 199 6.20 32941 163502EE own generation 173 5.39 29177 125173N2O 65 2.02 48265 247404Fossil fuel switch 63 1.96 32169 125572EE industry 62 1.93 1806 9828Coal bed/mine methane 47 1.46 21788 79984Solar 37 1.15 969 1860

Types of CDM projects Number Percentage (%) kCERs 2012 kCERs

EE supply side 25 0.78 7480 11772EE households 24 0.75 1104 2605HFCs 22 0.69 81712 476479Reforestation 22 0.69 959 10174Fugitive 20 0.62 12902 52653Cement 19 0.59 3214 21502PFCs and SF6 13 0.40 4774 11279Geothermal 12 0.37 3182 12886Transport 6 0.19 563 2493Afforestation 5 0.16 122 585EE service 5 0.16 59 330Energy distribution 4 0.12 2268 3182CO2 usage 2 0.06 24 139Tidal 1 0.03 315 1104Agriculture 0.00

Total 3211 100.00 485814 2056055

CDMs in Myanmar

Potential CDM projects includes:

Afforestration

Biomass power generation

Small-scale hydropower <20MW

Biogas plant

Waste to Energy

Energy efficiency

Your ChoiceOR

Agenda

“CDM” Hydro Power Project vkyfoifhovm; ?

CDMs in Myanmar

“CDM” Hydro Power Project vkyfoifhovm; ?

Energy – Development – Poverty Alleviation

“CDM” Hydro Power Project vkyfoifhovm; ?

Green Energy – CDM – CER – Finance

Green Energy – Improve Climate Change

Improve Climate Change – Save Lives

Correct Vision

“Global warming is the greatest threat facing the world today – far greater than the threat from terror”Source: Sir David King, chief advisor to the British government, Dagbladet Information, Denmark, 10. Jan. 2004

Responses from Experts: Global Warming PreventionProject

“Obstruction CDM Project for reduction of Global warming or even preventing Conference Delegate to attend the Renewable Energy Conference is the same threat facing us– like the threat from terror”

Source: Mr. Htun Naing Aung, Chairman/CEO Kaung Kyaw Say Group of Companies, Naypyidaw Sep.17, 2011

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KKS CDM TeamU HTUN NAING AUNGOffice: +95-1-571284

Mobile: +95 (095183517)mgy@myanmar.com.mm

No.31 Pinlone Yeikmon 5th Street, Pinlone Yeikmon, Thingungyun Tsp, Yangon, MYANMAR 11071

Thank you for your kind attention