Overview of UNEP-UNEP Risoe Energy & Carbon Finance Program

GEF V meetingWashington, 15 November 2010

Glenn Hodes

2

Lessons Learned

• No simple answers – institutional capacity building is part of the solution BUT not a “silver bullet”

• Access to up-to-date technical information and training• Countries need to be motivated, committed, and able

to create attractive business conditions for CDM• Facilitating finance – involving local, regional and

international finance institutions – through PPPs key• Leveraging carbon $ in LDCs a supply-side problem

A RBF View

UNEP Strategy ECF Strategy Actions Results1. Low carbonfuture society

• Mitigation• C market devlpt.• Data assessment

2. Support UNFCCC/KP implementation + the Nairobi Framework

3 Promote greater CC resilience (esp. in LDCs)

1. Facilitate larger, more efficient carbon

market

• Increase institutional capacity among

underrepresented countries

• Facilitate CDM projects through TA and seed finance

that deploy cleaner technologies

• Focus on underdeveloped sectors in carbon market

• Market leading analysis/research : Perspectives series

POA guidebook, etc.

CDM Bazaar

-Greater awareness education and capacity

- more CDM projects in pipeline (esp. from LDCs)

- Nairobi Framework goals advanced, including investment mobilization, DNA capacity development

2. Critically evaluate and pilot new

approaches for market scale-up

3. Enhance equitable regional distribution

of carbon investments

4

What concrete results can we demonstrate?• Increased CDM capabilities among 50 developing countries with low capacity

including, in some cases, passage of new legal/regulatory frameworks to improve investment climate

• Increased and diversified portfolio of CDM projects at development and idea stages

• Market developments stimulated through analysis/publications trusted by wide audience

o CDM Bazaar averages 5.000 unique users/month and receives 160.000 hits/month.o 165% year-on-year increase in use of CDM pipeline

• Regional Carbon Forums institutionalized through partnership with WB, UNFCCC, IETA, etc.

• Satisfaction and positive feedback from DNAs/other in-country “clients” • Program activities spotlighted in independent evaluations and reports to bilateral

donors (e.g. NF implementation, DFID)

5

UNEP CDM capacity development programUNEP CDM capacity development program

Core business & Core business & regulatory frameworks regulatory frameworks

for CDM investmentfor CDM investment

Modalities & Modalities & Procedures for CDM Procedures for CDM projects approval projects approval

CDM workshops and CDM workshops and training sessions for training sessions for

selected target audienceselected target audience

Identify, assess and Identify, assess and formulate CDM projectsformulate CDM projects

Promote Promote commitment of commitment of policy makerspolicy makers

project originationproject approval

Creates a national CDM project portfolios and the institutional capability to attract CDM investments

Creates a national CDM project portfolios and the institutional capability to attract CDM investments

secure financing and secure financing and implement CDM projectsimplement CDM projects

Guidance and Guidance and guidebooks (CDM guidebooks (CDM

investor guidebook)investor guidebook)

Institutional Capacity Institutional Capacity DevelopmentDevelopment

Individual Capacity Individual Capacity DevelopmentDevelopment

Promotion of national CDM portfolios in Regional Carbon Forums and Expo

6

UNEP/URC capacity development activities in Africa

• CD4CDM• Green Facility

• UNDP-UNEP

• CASCADE

• CB for MEAs (CDM) in 7 countries.

28 COUNTRIES; 11 LDC

UNEP/URC capacity development activities in Africa

• CD4CDM• Green Facility

• UNDP-UNEP

• CASCADE

• CB for MEAs (CDM) in 7 countries.

28 COUNTRIES; 11 LDC

7

• CD4CDM

• UNDP & UNEP – LCF in LAC

• CD for MEAs – CDM for the Caribbean

Current UNEP/URC capacity development activities in Latin

America & Caribbean

8

ACP – CD4CDM

9

ACP – CD4CDM

10

ACP – CD4CDM – National level

• National CDM Project Portfolios • Potential sectors for CDM projects will be prioritized• 48 Project Idea Notes (PINs) will be developed (4 per country)• 24 Project Designs Documents will be formulated (2 per country)• 4 POA PINs will be developed (2 per region)• 2-4 POA – DDs will be formulated for each region

• Promotion of CDM Portfolios• 3 Regional Carbon Forums will be organized• Participating country delegations will be supported to participate in

Carbon Expo 2011• 3 Regional Carbon Forums for the Financial sector• National CDM websites will be developed

11

UNEP POA Facility

• Facilitating ‘Programmes of Activities’ for the Clean Development Mechanism (CDM) in Africa (FPAC)

• Provide sub-Saharan Africa with access to international carbon finance

• The Programme will demonstrate pilot renewable energy applications under “Programmes of Activities” (PoAs)

• The pilot schemes will be disseminated across Africa for independent replication.

• The pilots will directly benefit host communities

• The outputs are expected to include: four country pilot schemes, and one regional pilot, to test and demonstrate the PoA approach; communities in pilot locations have access to cost effective and efficient energy;

• PoA pilot schemes demonstrated for independent replication across Africa.

Upcoming

ACAD: a PPP to Catalyze the African Carbon Market

Innovative PPP for green financing supported by Germany with two aims:

1.Facilitate closure of replicable carbon projects

2.Mainstream carbon capacity within the African financial sector

13

• ACAD addresses key barriers to more robust African carbon market by:o Enhancing transactional capacity within African bankso Reducing high early-stage costs/riskso Providing a jump-start financing solution

14

Key Activities• Provide transaction cost sharing services with accompanying technical support o Demand-driven - local financiers, developers, or project proponents can applyo So far 10 projects in 7 countries have been selected:o Roughly €50,000 per project – now making first disbursementso Can disburse to service provider of choice and cover CDM documentation development, carbon auditing,

registration fees, enviro-legal studies, etc.

• Enhance hands-on skills amongst African banks in project origination, financial appraisal, and due diligence

o Four advanced training workshops for developers and African FIs: Cape Town (Oct. 2009), Nairobi (Mar. & June 2010), Lagos (Q1 2011). Over 150 African bankers trained

• Investor outreach/mobilizationo 2nd African Bankers’ Carbon Finance & Investment Forum, Jo’burg, Nov. 4 - 5, 2010

• Methodology development. Study on developing more standardised cross-border electric power baseline methodologies for African countries connected through the Southern African Power Pool (SAPP).

15

1. Lake Turkana Wind Power Project, KENYA

2. Lagos State Waste Management Authority Landfill Gas Projects in Lagos, NIGERIA

3. Athi River Mining Kaloleni Cement Plant Fuel Switch/EE project, KENYA

4. Matola Cement Coal to Gas Fuel Switch, MOZAMBIQUE

5. Clay Brick Sector EE Program, SOUTH AFRICA

6. International Ferrometals Waste Gas Co-generation, SOUTH AFRICA

7. APA Integrated Waste Management Program, NIGERIA

8. Kateni Kadji Green Charcoal Project, MALI

9. ETHCo Vinasse Biogas Project, MALAWI

10. Terem Hydropower Project, KENYA

11. NURU Lights (LED dissemination), RWANDA

Approved Projects to Date

16

• Guidebooks on specific issues of the CDMo Introduction to the CDM: 2002o CDM Information and Guidebook: Dec. 2003o Institutional strategy to promote the CDM in Peru: Feb. 2004o CDM legal issues Guidebook: May 2004o Institutional issues in CDM implementation: May 2004o CDM and Sustainable Development: Feb. 2004o Guidebook on developing baselines for CDM projects: June 2004o PDD Guidebook: Navigating the Pitfalls - Second edition: April 2008)o Guidebook to Finance CDM projects: May 2007o Implementing CDM Projects: Guidebook to Host Country Legal Issues: August 2009o A Primer on CDM Programme of Activities: November 2009

Analytical Activities & Publications

Support the informational and educational objectives of our capacity development activities

Support the informational and educational objectives of our capacity development activities

provide targeted audiences with ‘reference’ manuals containing clear operational instructions on concrete topics for which public information is already available.

provide targeted audiences with ‘reference’ manuals containing clear operational instructions on concrete topics for which public information is already available.

17

• Carbon Market Perspective Serieso 2010 - Can Carbon Markets Promote REDD+

Activities in Developing Countrieso 2009 - NAMAS and the Carbon Market o 2008 - A Reformed CDM - Including New

Mechanisms For Sustainable Development o 2007 - Equal Exchange: Determining a Fair Price

for Carbon

Analytical Activities & Publications

aims at comprising an annual special feature on a topic of pivotal importance to all developing countries in the global carbon market

aims at comprising an annual special feature on a topic of pivotal importance to all developing countries in the global carbon market

18

Analytical activities & publications

Data base and analysis providing monthlyData base and analysis providing monthly

• CDM data & analysis - CDM&JIPipelineo A web based data base compiling CDM

projectso Analysis and market surveillanceo Projections of GHG emission reductionso Calculation of different parameters

o It also contains the baseline & monitoring methodologies, a list of DOEs and several analyses. Almost all information is from cdm.unfccc.int and ji.unfccc.int.

19

Web based tools and platforms

• Web based CDM Methodology Selection Toolo A handy and simple toolo Categorizes methodologies by

technologyo It facilitates choosing a

methodology that is applicable to the type of CDM project you are planning to develop

o Builds on the list of approved methodologies

o It is updated regularlyo It is a work in progress –

comments and suggestions for improvement are welcome

NEW

20

More information:http://uneprisoe.org

http://cd4cdm.orghttp://acadfacility.org

Thank you!!