S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L

C L I M A T E C A R E - CLIMATE F I N A N C E A N D D E V E L O P M E N T P R O J E C T S

Investment in large scale Climate and Development finance projects

ClimateCare – Executive Summary

ClimateCare was established in 1997 and is one of the longest established and leading

environment-focused organisations in the carbon market.

We develop innovative financial models to catalyse investment in Climate and Social Development

projects in LDCs – including and beyond existing carbon market frameworks.

ClimateCare develops and consults on Emission Reduction projects in Sub-Saharan Africa and

throughout the world for both the compliance and voluntary carbon markets as well as the

newer emergent Climate and Development finance funds. Our focus is on innovation and

sustainable development. Every project we develop is designed to contribute towards

fulfilling the Millennium Development Goals. (MDGs)

ClimateCare originates and sources carbon credits on behalf of large corporates, NGOs, and

sovereigns. In addition, we manage voluntary offset schemes for organisations and sell offsets to

individuals. We exclusively market EcoSecurities’ and J.P. Morgan’s VERs as well as our own.

Corporate offsetting

programmes

Sourcing carbon credits

Project Development

Consulting

Recognition

2011 – Nominated ‘Best Offset Provider’ –TreeHugger Best of Green Awards

2010 - The ENDS Guide to Carbon Offsets – rated as top provider

2010 - Which? – rated as a top provider in all categories

2009 – Rated “Best Offset Retailer” by Environmental Finance

2009 - Top rated by DSF Pembina review of carbon providers

Recognised as a Leading Carbon Offset Provider and Project Developer

A Selection of Clients

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Corporate Objectives

We achieve multiple investment goals through ClimateCare project opportunities

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Introduction to ClimateCare

ClimateCare was sold to J.P. Morgan in 2008 and operated as part of the bank’s Environmental Markets division until

August 2011 when it was taken independent in an MBO.

Beyond ‘voluntary carbon’ - ClimateCare is developing and implementing innovative Climate and Development Finance

models to deliver projects that both reduce emissions and deliver against MDGs – providing new and additional

revenues to those who need it most in tackling the effects of climate change.

We believe that this is an exciting time for mobilising public and private investment to tackle pressing social,

climate and poverty issues. We have developed a number of models which make investment attractive to

private sector market entrants and, with over 14 years’ experience developing projects on the ground in the

LDCs, we are uniquely placed to mitigate the risk in project selection and implementation.

The business continues to follow the same stringent project procurement and risk management processes developed

whilst at J.P. Morgan together with the same robust project procedures we always have..

Our projects sit on the developing nexus between private sector finance and the development/aid sector and

we believe that they represent an opportunity to achieve both Climate and Development (MDG)

goals/outcomes at scale, whilst returning profits commensurate with normal private sector returns.

We have developed a number of models which make investment attractive to private sector market entrants with the

bulk of the upfront finance being delivered by Public or Third Sector finance (Devpt Banks, Multilateral Donors,

Foundations) on a revolving fund basis.

Our 12 years experience of delivering projects on the ground in LDCs has given us ‘best in class’ project selection,

efficiency and risk mitigation capabilities, which together with a proprietary Delivery Risk Mechanism for assessing

project viability means that we can deploy investment funds rapidly and efficiently to achieve the twin aims of social

development and ‘profit for purpose’.

The story so far…

• We have now funded over 11 million tonnes of emissions

reductions through our projects .

• Our stoves programme has distributed 1.6million stoves in developing

countries , easing pressure on deforestation, reducing indoor air pollution

and improving the health and economic circumstances of over 7.5 million people – particularly women and children – helping tackle what is now the Developing World’s

largest killer – killing more people each year than Malaria.

• Our new programme financing Clean Water has so far provided 4 million

people with a free and sustainable way to access clean water.

• With our customers, we continue to develop and fund c 4million tonnes of Emission

Reductions each year and are now at the forefront of moving the carbon market to the next

stage - developing and implementing new financial structures :such as Revolving funds

and Social Impact Bonds etc…whilst funding substantial new communications around the

way that carbon finance can be used to achieve both environment and MDG goals

How did we deliver those results?

Through Carbon Offsetting.

When we conduct business we use energy and are responsible for carbon emissions being released into the atmosphere

Carbon Offsets:

are a reduction of carbon emissions on your behalf through funding of a project, most often in the developing world, which

reduces carbon emissions by an equivalent amount to those released by your business activity

are a way to make verified emissions reductions at the lowest cost

Provide REAL reductions for your activities/ those of your products

• Measure emissions activities and buy equivalent tonnes of offsets

• Fund emissions reduction projects with the money

• Verify the project reductions to check they match the emissions from the activity

Offset Inclusive Carbon Management

Calculate

Offset Avoid

Reduce

Carbon reduction virtuous cycle –

Defra 2008

In Support of Offsetting

“it makes sense to get the biggest bang for your bucks, to

identify the most cost-effective emissions reduction options

around the world…The atmosphere doesn't care where you

reduce emissions as long as you reduce emissions.”

- Yvo De Boer, United Nations Climate Chief

“Reduce” and “Avoid” activities generally leave remaining emissions

Offsets can get your business to zero carbon quickly…they are the only

way to deal with your unavoidable emissions.

Offsets buy the environment time for your business to become low

carbon - the environment & humanity need reductions to happen now

Offsetting makes real reductions - making high volume of reductions

quickly

It is cost effective – by making a high number of reductions per £ spent

Why Offset?

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5 year target

50% reduction

Time

Tonnes

100%

60%

40%

20%

0%

80%

0 1 2 3 4 5

Offset remaining Emissions

Example best practice emissions reduction strategy – 50% ABSOLUTE reduction by 2015

Businesses are responsible for approx. 60% of total annual

global CO2 emissions and will therefore need to contribute

to the reductions necessary to avoid a catastrophic rise of

temperatures.

Leading businesses are now making significant public

commitments to reduce their impact

A leading public commitment targets an absolute reduction

in business emissions of 50% by 2020

This is currently considered beyond best practice strategy for

internal emissions reductions

How cumulative environmental impact shapes best practice carbon management strategies

Even using this strategy, total cumulative CO2 emissions can

remain very similar dependent on the timing of reductions

These cumulative emissions globally drive atmospheric CO2

levels. The most effective climate change action therefore

reduces total cumulative emissions as much as possible in the

short term by ensuring that the most cost-effective carbon

reduction investments are made

A business looking to develop a robust strategy for carbon

management should undertake assessment of all internal and

external emissions reduction options and fund those that

deliver maximum value to the company and benefit to

the environment

Addressing ‘remaining emissions’

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Total reduction compared

with constant baseline

year emissions

Reduction profile

Constant emissions

Early planning + growth

Early wins

-1%

-25%

-41%

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Fixed annual

VER vs CER pricing – Valuing

Development

Offset Standard Description of key factors affecting price

Offset Price

Range2

(£/tonne)

Gold Standard Verified

Emission Reduction (GS VER)

Rigor: Most stringent voluntary standard

Reputation: Established by leading Non-Governmental Organizations

Quality: Highest cost offsets

Liquidity: Limited

“Carbon Charisma”: High - requires broader sustainable development co-benefits

€5.00 - €11.00

Voluntary Carbon Standard

(VCS 2007)

Rigor: Stringent voluntary standard

Reputation: A leading global standard for voluntary offsets

Design: Process and procedures designed to enable large-scale projects

Project Eligibility: Prices range reflect variety of eligible project types

Liquidity: Moderate

€.5 - €6.00

Climate Action Reserve

(CAR)

Rigor: Stringent voluntary standard

Reputation: A leading standard for US based voluntary offsets

Design: Process and procedures designed to enable large-scale projects

Liquidity: Limited

€2.00- €5.00

Chicago Climate Exchange (CFI)

Rigor: Less stringent offset standards produce skepticism

Liquidity: Only exchange-traded voluntary product

Reputation: Generally represents VER “floor price”

NO BID

1 EUA and CER commodity prices based on year to date trading range

2 VER price range affected by factors including: project type, vintage, volume, sustainability benefits, and geographical preferences

Compliance Instrument Description of key factors affecting price Offset Price

Range1

European Union Allowance

(EUA)

Liquidity: Government issued allowances valid in European Union Emissions Trading

Scheme

€10.25

Certified Emission Reduction

(CER)

Rigor: Regulatory standard defining offsets valid for compliance with

requirements of Kyoto Protocol

Reputation: The benchmark against which voluntary standards are measured

€6.74

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So now what…

Given that the Voluntary Carbon Market is doing a great job – but is just too small to make the impact needed…

How do you make Compliance Carbon Markets work for the poor?

You can use a blunt instrument – like restricting supply to LDCs

Or you use a more refined financial instrument that recognises that Pro-Poor projects have two outputs - and by

placing a tangible, separate value on things other than carbon – and delivering that value for less than it currently

costs…– results only - basis.

Increases the risk weighted return for investors

Allows us to access the scale that Compliance Carbon Markets bring – whilst delivering the Sustainable Development

benefits that have been so highly prized in the Voluntary Carbon Market.

Other benefits…

Delivers on the age old problem of having public finance ‘leverage’ private finance

Highly Extendable to NAMAs and other Climate Finance elements (Green Climate Funds etc…) as the payments are project based and ‘on

delivery’ only.

Delivers access to the carbon markets for existing NGOs

ClimateCare Projects - Linking to

Millennium Development Goals

# Country Tech

1 Taiwan Wind

2 Turkey Wind

3 Uganda Energy Efficient

Stoves

4 Ghana Energy Efficient

Cookstoves

5 Argentina Biomass

6 India Composting

7 Cambodia Energy Efficient

Stoves

8 India Human power

water pumps

9 India Biomass

10 India Fuel Switch

Every one of ClimateCare’s energy related development projects has a positive impact on the host country and

community. As can be seen from the table below, all reduce poverty by creating jobs and providing additional

energy and reduce reliance on fossil fuels, however ClimateCare’s more community focused projects also meet

other goals.

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ClimateCare - Alignment with the UN’s

Millennium Development Goals

Increased income, reducing

need for children to work

Bringing light for study in

the evenings

Improved hospital facilities

Reduced smoke from

kerosene avoidance

Increased time for study

Improved medical facilities

Increased income

Replaced diesel generators

Reduce GHG emissions

Improved air quality

24 hour operation of the

local hospital

Improved post natal care

Reducing poverty

Increasing education

opportunities

Creating local jobs

Reducing energy costs

Involved local community

with partners from UK,

Germany, India

Example: Zambia hydro project

Carbon Development

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Project Development and Consultancy

14 years experience in energy and development related projects

ClimateCare has been at the forefront of energy & sustainable

development projects since 1997

ClimateCare’s world leading experts pioneered the first clean cook

stove methodology to be approved by the Gold Standard

Currently pioneering the development of water purification

methodologies/projects and programmes of activities

Expertise covers both the voluntary and compliance carbon markets

ClimateCare directly finances projects as well as facilitating both clients

and investors to become involved

We are able to assist with existing investments that require delivery or

commercialisation assistance

Consulting services

Experts in all aspects of carbon asset development for LDCs - financing, methodology, project

design, capacity building, management, monitoring

Technical expertise on all carbon project types

Strong NGO and donor experience and related project activities

S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L

PROJECT EXAMPLES

Technology: Energy Efficiency

Standard: GS VER applicant

Vintage period: 20011 - 2018

Location: Sub Saharan Africa

Project background

In Africa more than 60% of the population are exposed to disease-bearing drinking water

For the majority of people, the only option is to boil water to kill bacteria

This is often ineffective (as water is not boiled for long enough) and places increased

pressure on the wood resource. In turn increasing GHG emissions and deforestation

Project Activity

Water filter remove the need to boil water, improve quality and avoid GHG emissions

Link to the Millennium Development Goals (MDGs)

Sub Saharan Africa – Water Filters

MDG Impacts

1 Reduces illness and mortalty – thereby inreasing working days and income

2 Safe drinking water prevents children from becoming ill so they can attend school

3 Saves time for women and girls, improving school attendance and self esteem

4 Reduces infant mortality and morbidity from diarrhoea

5 Clean water and reduced illness positively impacts maternal health

6 Healthier lives for the immunocompromised and reduced mortality

8 Provides access to developed world markets and expertise

Technology: Human Power

Standard: Verified Carbon Standard (VCS)

Vintage period: 2005 - 2010

Location: India

Project background

Diesel powered pumps are used to irrigate small-holdings across India. However, the

pumps are expensive and are usually hired for short periods, meaning that the fields have

to be flooded, wasting water and washing top soil away.

Project Activity

Treadle Pumps are an alternative low-cost method of irrigation which use human power to

lift the water with a ‘stepping’ action. The pumps replace diesel driven pumps, saving CO2,

improving agricultural yields and empowering the rural poor.

Link to the Millennium Development Goals (MDGs)

India – Treadle Water Pumps

MDG Impacts

1 Increases disposable income, creates jobs, improves crop yields

2 Fathers are more present in the family relieving the pressure on children

3 Increased income helps girls education

7 Less topsoil is washed away and emissions are reduced

8 Provides access to developed world markets and expertise

Technology: Energy Efficiency

Standard: GS VER

Vintage period: 2009 - 2014

Location: Uganda

Project background

Uganda has one of the highest deforestation rates in Africa

More than 95% of Ugandans rely on fuel-wood for cooking

In rural areas wood predominates, whilst in urban areas charcoal is used

Project Activity

The project replaces rudimentary stoves or open fires with an efficient stove, known as the

Ugastove, that reduces charcoal consumption by 25% in turn reducing GHG emissions and

easing pressure on Uganda’s non-managed forests

Link to the Millennium Development Goals (MDGs)

Uganda - Efficient Cook Stoves

MDG Impacts

1 Income related to stove sales. Reduces wood fuel cost, increases disposable income

2,3 Increased income increases access to education for girls, more security for women’s

businesses

4,5 Reduces indoor smoke pollution (a killer of millions each year)

7 Reduces pressure on deforestation as less wood fuel/charcoal is required for cooking

8 Provides access to developed world markets and expertise

Technology: Energy Efficiency

Standard: GS VER

Vintage period: 2009 - 2014

Location: West Africa - Ghana

Project background

Ghana has one of the highest deforestation rates in Africa

Wood and charcoal provide more than 80% of Ghana’s domestic energy

In rural areas wood predominates, whilst in urban areas charcoal is used by as many as

1.3 million households or 31% of all Ghanaian families

Project Activity

The project replaces these coal pots with an efficient stove, known as the Gyapa, that

reduces charcoal consumption by 25% in turn reducing GHG emissions

Link to the Millennium Development Goals (MDGs)

Ghana - Efficient Cook Stoves

MDG Impacts

1 Income related to stove sales. Reduced wood fuel cost, increases disposable income

3 Increased income helps girls education, more security for women’s businesses

4,5 Reduces indoor smoke pollution (a killer of millions each year)

7 Reduces deforestation as less wood fuel/charcoal is required for cooking

8 Provides access to developed world markets and expertise

S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L

THANK YOU – ANY QUESTIONS?