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Sasa Eichberger
The Austrian JI/CDM Programme
Status, Experience, Outlook
Moscow, 29 April 2008
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I. Introduction to the Austrian JI/CDM Programme
II. Experience 2007
III. Outlook 2008
IV. Summary and Closing
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Introduction to the Austrian JI/CDM Programme
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Kommunalkredit Public Consulting (KPC)
Employees: 49
 100% daughter company of Kommunalkredit
Austria AG: Austrian bank specialized in public
finance in Austria and CEE
Vienna
 Management of the Austrian JI/CDM-Programme
since 2003, Fund Volume EUR 399 million
 Management of the Federal Environmental
Support Schemes in Austria and for projects abroad
since 1993
Kommunalkredit Group
Tuerkenstrasse 9, 1092 Vienna
 Management of the Austrian Climate and Energy Fund since 2007
 Cooperation with CEE Region on behalf of Austrian Development Agency since
1994, renewed 2007
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Austrian JI/CDM Programme - Overview
Federal Minister
Republic of Austria
of Agriculture, Forestry,
Environment and Water
Management
Federal Ministry of Agriculture,
Forestry, Environment and Water
Management
Recommendation
Austrian JI/CDM
Commission
Approval
EUR 399 Mio.
Application
Current Portfolio
Current Portfolio
Management of Austrian JI/CDM Programme by KPC
 Sourcing of eligible projects
 ERPA Administration
Type
 Funding Contracts for Project Development
 Monitoring
 Negotiation and Conclusion of ERPAs
 Payment on Delivery
15 JI
35 CDM
 Recommendation to Austrian JI/CDM Commission
 max. 50% Prepayment
 Marketing & Stakeholder Relations
 Risk Management
Volume Target (2008-2012):
Individual
JI/CDM Projects
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9,8 Mio.
22,0 Mio.
31,8 Mio.
3 Facilities
CO2e
45 Mio. t CO2e
Carbon
Facilities/Funds
Volume (t CO2e)
GIS
1 Fund
5,45 Mio. t
USD 5,00 Mio.
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Regional distribution of Project Pipeline
161 projects as of 1 January 2008
Ukraine
9%
Other JI
2%
Vietnam
6%
Russia
9%
Africa
6%
Asia Baltic States
2%
4%
Central & Eastern
Europe
11%
Other CDM
6%
Latin America
4%
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India
13%
China
28%
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Memoranda of Understanding – MoU
 Competence:
Austrian Federal Minister of Agriculture,
Forestry, Environment and Water Management
& Host Country Ministry
 Aim:
Basic agreement on co-operation
Facilitation of project implementation
 Contents:
Prioritised project categories
Basic agreement on transfer of CERs & ERUs &
AAUs
23 signed: Argentina, Bolivia, Bulgaria, China, Colombia, Czech Republic,
Ecuador, Estonia, Ethiopia, Ghana, Hungary, Indonesia, Latvia, Mexico,
Mongolia, Morocco, New Zealand, Peru, Phillipines, Romania, Slovakia, Tunisia,
Vietnam.
under negotiation/in preparation: Brazil, Chile, Russia, South Africa, Ukraine, ...
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Experience 2007
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Market 2007
Joint Implementation

Russian approval procedure in place

JI host countries within EU busy with NAPs, EU-ETS and GIS, JI
potential decreasing, potential left for sectors not covered by EU-ETS

Main competitors governmental programmes, Japanese companies
active in compliance and voluntary market

Increased purchasing targets for governmental purchasers

Track 2 under JISC proved to be successful and receives confidence

Determination of JI projects is still very time-consuming

Further market development (track 1 eligibility, GIS)
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JI Market 2007
Regional Experience
 Russia
- Increased interest from Russian companies in JI
- Large utilities are preparing project pipeline and own tender procedures
- Competition from large banks and funds
 Ukraine
- Prepayment still important but difficulties to obtain bank guarantee
- Successful financial closing achieved for some of our projects
 Other JI Region
- Slow approval process, focus on EU-ETS and GIS
- Decreased interest in JI from host countries and companies
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Market 2007
Clean Development Mechanism

China dominant in number and volume of new Projects

India dominates issued CER market

Trading in secondary CER market, structured products

Increased purchasing targets for governmental purchasers

Main competitors corporate compliance buyers, funds and strategic
investors

First year of CER deliveries allows closer look at project performance

Additionality has become the issue at UNFCCC level

Project Quality (large hydros etc.) gets more attention
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CDM Market 2007
Regional Experience
 China
- Sellers look for a stable partner, multiple projects with one partner
- Governmental background is an asset
- Buyers requested to cover project development costs
- More and more brokered transaction
 India
- CERs sold off in single tranches after issuance, some Projects offered on
forward basis in advanced stages, very high price expectations
- New Programmatic Approaches supported by government
 LATAM
- High price expectations
- Many international brokers and big aggregators (also from US)
- Project financing remains a problem for remaining projects
 South East Asia
- Lots of project potential, Japan is dominant
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Austria and CDM in Africa
African Initiative launched beginning of 2007
 Identification of four target countries which are supported with extra
funds: Ghana, Ethiopia, Uganda, Tanzania
 Signing of MoU with Ghana and Ethiopia
 Increased funding for project development (PIN/PDD) for all African host
countries provided by Environmental Ministry
 First projects are under development in Madagascar (small hydro),
Tanzania (small hydro and CHP) and Uganda (small hydro)
 Most local interest in landfill gas and biodiesel
 South African market is the most mature (lots of local expertise)
 Lack of equity and debt financing most imminent problem
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Project Performance of Austrian Portfolio
First CERs Delivered in March 2007
 10 projects have delivered in 2007
- 6 China, 3 India, 1 Egypt
- total volume delivered approx. 1 Mio. t
 More than 90% of contracted CERs have been delivered out of those 10
projects (compared to contract value not PDD value!)
 Projects that have delivered show good performance, however there are
some projects with delays on the way to physical implementation
 Approx. 2-3 months delay compared to first scheduled date of delivery
(mostly caused by delays in verification & certification)
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Outlook 2008
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Our Strategy for 2008
Sourcing Strategy
 Larger volumes, bundling of smaller projects
 Based on forward ERPA at early to medium project development stage
 Participation in tenders also in JI
 Even more emphasis on project quality!
 Follow-up projects with established partnerships
 Green Investment Schemes
Replacement Strategy
 Replacement Strategy will be defined based on further experience with
performance
 Participation also in secondary market
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Focus Area 2008
Green Investment Schemes
 Austria will be eligible under Art. 17 in April 2008
 All national legislation in place
 First negotiations with potential host countries have started end of 2007
 Signing of MoUs with host countries to facilitate GIS
 Volume target of approx. 10% of total purchasing target
 2-3 transactions envisaged
 Focus on renewable energy and energy efficiency
 GIS structure includes a certain part of soft greening measures, focus
on hard greening with project-based and programmatic approach
(environmental support schemes)
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Focus areas 2008
JI and CDM
Joint Implementation
 Russia and Ukraine as major markets
 Participation in tenders from large utilities
 Establishment of Strategic Partnerships
 KPC is represented with a branch in Moscow
Clean Development Mechanism
 China and Asian region as major market
 Central Asia as new market
 Follow-up projects within established partnerships
 Continued Austrian initiatives in Africa
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Summary & Closing
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Your benefits
 Support in project development by network sharing
 Local knowledge through our team of experts
 Long term experience in the carbon market
 One of the largest governmental buyers
 Optimal transaction structures and tailored ERPAs
 Long term co-operation with reliable partners
We are looking forward to cooperating with you!
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Austrian JI/CDM Programme
www.ji-cdm-austria.at
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