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Financing Sustainable CDM Projects

COP11/MOP1 Montreal: IISD Development Dividend Project. Financing Sustainable CDM Projects. Emily Tyler Climate Project Transactions Specialist SouthSouthNorth Projects Africa. The SSN Experience.

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Financing Sustainable CDM Projects

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  1. COP11/MOP1 Montreal: IISD Development Dividend Project Financing Sustainable CDM Projects Emily Tyler Climate Project Transactions Specialist SouthSouthNorth Projects Africa

  2. The SSN Experience • SSN: a network organisation formed in 2001 to build capacity in CDM through the development of projects • Operating in 4 countries: Brazil, Bangladesh, Indonesia and South Africa • Core values of sustainable development - SSN sustainable development matrix tool • The majority of SSN projects are Gold Standard • Now SSN Phase 2: Poverty Alleviation through the lens of climate change

  3. Financing the Development Dividend Project Types: CDM with High SD Co-Benefits Predominant characteristics? • Low volume (<50,000t) • Public sector • High ‘financial additionality’, ie low/no revenues • Small scale

  4. The Challenge • Risk Profile (timeframe, communities, financial backing, counterparty experience) • Transaction Costs • Co-funding

  5. Kuyasa low cost housing energy upgrade CDM project Retrofit 2309 low-cost houses in Kuyasa, Khayelitsha with: • Insulated ceilings, • solar water heaters and • CFL’s (energy efficient lighting)

  6. South Africa Western Cape City of CT Kuyasa Project Co-Benefits BENEFITS • Alleviates energy poverty • Saves R600/hh/annum in energy costs • Creates over 100 person years employment • Improves health conditions • Improves local air quality • Reduces peak energy demand • Benchmark for replication internationally

  7. CDM Transaction Costs Kuyasa: 5600t/a Offset Market €15t Compliance €10

  8. VER Transaction Costs Discounted price as non-CDM

  9. Kuyasa: Co-Funding • Carbon Income €320,513 (at €8 per credit) • Local govt research grant (PAWC) €1.95m • National Govt Poverty Alleviation Grant (DEAT) €1.6m • EDF Grant €57,692

  10. To Conclude… • Does the CDM process add value to typical high co-benefit mitigation projects? • Is there scope to strengthen alternative mechanisms for these projects (VERs, Offsets)? • What about the integrity of emission reductions? • Is there scope to strengthen the CDM process for these projects?

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