Session 3 - Carbon Finance Approach

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Raju Laudari

Assistant Director, AEPC

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is one of the most effectivepolicies for tackling climate change. it inspiresoperational excellence and

: Emission reduction accountedto meet the objective of UNFCCC & target of KyotoProtocol

: Outside Kyoto Protocol and

voluntary action by environmentally consciousindividuals and organizations continues to sendan important message on the need for action.

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Time

Emission Reduction

Policy/programFinance

Technology

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RE carbon financing experience

9,708 30,203tCO2e

AEPC Registered

9,688 31,

875tCO2e

AEPC Registered

About 650 40,535tCO2

eAEPC Registered

20,254 56,919CO2e

AEPC Registered

20,348 56,487tCO2e

AEPC Registered

Annual

20,000 2.5tCO2e/plant

AEPC Requesting

forRe istration

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8

RE carbon financing experience - Nepal

Annual38,000

113,128tCO2e

AEPC Under Validation

8,000 38,699tCO2e

AEPC Under Validation

26,000 19,899tCO2e

CRT/N Registered

7,500 WWF-Nepal Registered under

voluntary market

3*22000=66000

SDC Under validation

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IRR WithoutCDM

6.52%

IRR With CDMrevenue

9.13%

A case of Guizhou WeiningCounty Mawoshan WindPower Project-49.5MW

IRR(aftertax)

% 6.82 8 8.82

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IRR without CDM 6.35%

IRR with CDMrevenue

10.17%

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IRR without CER 2.49%

IRR with CER 11.05%

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Cost Items Cost (USD)

% of Total

Cost

Technical support 550,776 6

Subsidy to the users 3,343,809 36

Users' contribution 3,678,190 40

Repair & maintenance 1,724,138 19

Total 9,296,914 100

Carbon Revenue 4,374,000 47

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Cost Items Cost (USD) % of Total Cost

Program Cost 195,402 35

Users'contribution 227,586 41

Management &

Monitoring Cost 45,977 8

Subsidy 91,954 16

Total 560,920 100

Carbon revenue 486,000 872/6/2013 14


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Cost Items

Cost($millio

n)

% ofTotalCost

Government support including

donors fund 29.7 49.9

Users contribution 25.1 42.2

Local government contribution 1.9 3

Funding Gap 2.7 5

Total Cost 59.3 100

Carbon Financing 2.6 4

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1. Project basedmechanism

2. Baseline is whattypes of natural

resources availablein the boundary ofthe country e.g.hydro

3. Baseline is not

always currentpractice of energyuse e.g. importedfossil fuel

Energy Mix in Grid:Hydro Project in

Himalayan Countriesare not eligible/viableof carbon financing

Fossil fuel users areenjoying with carbon

financing

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The PoA under the CDM is regarded a precedorof a future NAMA mechanism and alreadyoperational

NAMA is often sector specific as it is a targetedaction. Sectoral approach as domestic mitigationactions in a MRV manner

Voluntary mitigation action by developing

countries: domestically implemented orinternationally supported

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Carbon financing is proved as instrumental toincrease financial viability in RE investment A key difference between NAMAs and the CDM is

that NAMAs encompass a wider range of activitieswith broader time horizons which provide more

opportunities for large-scale reductions than theproject/activity-based approach under the CDM. Hydro power in Himalayan countries can get more

benefit from NAMA than carbon financing

Therefore both carbon financing & NAMA can beinstrumental to further scale up renewable energyaccess

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Session 3 - Carbon Finance Approach

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