Cdm project screening pin development
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CDM Project Screening & PIN Development. Glenn S. Hodes UNEP Risø Center. Contents. Project screening PINs: Purpose and Key Elements Buyers’ Perspective Preview of PDD How to get started?. Project Screening. Undertaken by seller and buyer to prioritize investments

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CDM Project Screening & PIN Development

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Cdm project screening pin development

CDM Project Screening & PIN Development

Glenn S. Hodes

UNEP Risø Center


Contents

Contents

  • Project screening

  • PINs: Purpose and Key Elements

  • Buyers’ Perspective

  • Preview of PDD

  • How to get started?


Project screening

Project Screening

  • Undertaken by seller and buyer to prioritize investments

  • Cast the net widely at first, then narrow focus according to feasibility, profit, etc.

  • Fully use the process

    • to map out key risks, drivers, and uncertainties

    • to identify and engage project champions and affected stakeholders


Purpose of p roject i dea n ote pin

Purpose of Project Idea Note (PIN)

  • Communication tool used by project developers and investors early on in the process

  • Aids in the conceptualization, marketing, financing and screening/evaluation of projects

  • Prerequisite for more serious negotiations (e.g. Letter of Intent)

  • ‘Road map’ for formal CDM application/project document

  • DNA may require before issuing Letter of No Objection


Pin key elements

PIN – Key Elements

  • Clear description of project activities and technologies employed

  • Identify project participants and arrangement for implementation

    • Participants’ roles and their technical, financial capability to undertake

    • Status of third party involvement if appropriate (e.g., PPA in case of electricity generation project or agreement with municipality, private operator regarding ownership of waste in case of landfill project)

  • Eligibility outline: additionality and baseline scenario

    • Why the project should not happen on its own?

    • Sources of GHG emission reductions and total ER volume including possible leakage

  • Local, national, and global benefits

  • Risks


What buyers look for 1

What buyers look for (1)

  • Project Financing

    • Bankability: sooner can achieve financial closure, better the chances of selection

    • Project costs already determined and realistic

    • Idea of how carbon would impact implementation or address expected financing gap

  • Credible baseline and adequate volume

    • Carbon credit volume should be sufficient to cover CDM or VER transaction costs

    • Suggested minimum threshold: 20 ktCO2 per year or 100 ktCO2 total before 2012.


What buyers look for 2

What buyers look for (2)

  • Commercially viable technology

  • Competent, credible counterparties

    • clear champion and institutional arrangements

    • sound legal arrangement -- who owns, who operates, what type of agreement between project participants

  • Viable business + operation model

  • Demonstration of sustainability, safeguards

    • EIA and/or relevant environmental permits

    • Compliance with social + environmental safeguards plus

    • relevance to sustainable criteria of host country


Pin content

PIN Content

  • For national project approval:

    • See handout (India Example)

  • For buyers:

    • Most accept World Bank template, available at www.carbonfinance.org


Preview purpose of pdd

Preview: Purpose of PDD

  • Project DesignDocument

    • Part of formal CDM requirements (unlike PIN)

    • One of very few legal requirements for CDM eligibility

  • A detailed, well-substantiated document addressing key questions

    • How will project reduce GHG emissions?

    • Why is project eligible for CDM?

    • How will project risks be managed and shared by participants, and project impacts on stakeholders managed?

  • Conveys project information to the relevant stakeholders

    • potential investors, validator (DOE), DNA, and public at large


Critical elements of pdd

Critical elements of PDD

1. Selection of most applicable, approved methodology:

  • Existing approved methodologies can be combined where appropriate.

  • If none exists, one can submit a new one or (minor) alteration of existing one, at own expense

  • Assessment & demonstration of additionality:

    • Most critical issue for project acceptance

    • Project will be refused if not proven

  • Articulation of Sustainable Development Benefits and Documentation of stakeholder consultations, permits, etc.

  • Sound monitoring plan – key for eventual verification


  • Pdd content

    PDD Content

    • General description of project activity

    • Application of a baseline methodology

    • Duration of the project activity / Crediting period

      • Choice of the crediting period (10 years, 7 x 1 and 7 x 2 years, 30 years for A/R activities)

    • (Application of) monitoring methodology and plan

    • Estimation of GHG emissions by sources

    • Environmental impacts

    • Stakeholders’ comments

    • Contact information on project participants


    How to get started 1

    How to get started (1)

    • Browse CD4CDM Project’s ‘CDM Project Pipeline’ Tracker Tool

       http://www.cdmpipeline.org

    • Browse DVD/CD-ROM or UNFCCC CDM website:

      http://cdm.unfccc.int/Projects/pac/index.html


    Official homepage http cdm unfccc int

    Official homepage: http://cdm.unfccc.int/


    Http cdm unfccc int reference

    http://cdm.unfccc.int/  Reference

    • Decisions of CoP and CoP/MoP

      • e.g. Marrakesh Accords

    • Documents:

      • Guidelines

      • Templates

      • Reports

      • Modalities and Procedures

    • Forms

    • Procedures

    • Guidance/clarifications


    Thank you for your attention

    Thank you for your attention!


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