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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

CDM Project Screening & PIN Development

Glenn S. Hodes

UNEP Risø Center

  • 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
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


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


http cdm unfccc int reference  Reference
  • Decisions of CoP and CoP/MoP
    • e.g. Marrakesh Accords
  • Documents:
    • Guidelines
    • Templates
    • Reports
    • Modalities and Procedures
  • Forms
  • Procedures
  • Guidance/clarifications