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GIS from the perspective of a governmental Buyer – Experience & Expectations. The Austrian JI/CDM Programme Birgit Haberl. Agenda. Introduction to the Austrian JI/CDM Programme GIS Experience GIS Requirements and Expectations. Vienna. Kommunalkredit Public Consulting (KPC).
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GIS from the perspective of a governmental Buyer – Experience & Expectations The Austrian JI/CDM Programme Birgit Haberl
Agenda • Introduction to the Austrian JI/CDM Programme • GIS Experience • GIS Requirements and Expectations 29.09.2008
Vienna Kommunalkredit Public Consulting (KPC) • Employees: 57 • Management of: • Austrian JI/CDM Programme, EUR 531 Mio. • Austrian Climate and Energy Fund • Federal environmental support schemes in A & abroad • Austrian Development Agency coop. in CEE 29.09.2008
Federal Minister of Agriculture, Forestry, Environment and Water Management Republic of Austria Federal Ministry of Agriculture, Forestry, Environment and Water Management Recommendation Austrian JI/CDM Commission Approval EUR 531 Mio. Application Individual JI/CDM Projects Carbon Facilities/Funds GIS Austrian JI/CDM Programme - Overview Current Portfolio TypeVolume (t CO2e) 17 JI 7,3 Mio. 51 CDM 29,2 Mio. 36,5 Mio. Current Portfolio Management of Austrian JI/CDM Programme by KPC • ERPA Administration • Portfolio Monitoring • Payment on Delivery • max. 50% Prepayment • Risk Management • Sourcing of eligible projects • Funding Contracts for Project Development • Negotiation and Conclusion of ERPAs • Recommendation to Austrian JI/CDM Commission • Marketing & Stakeholder Relations 3 Facilities 5,45 Mio. t Volume Target (2008-2012): 45 Mio. t CO2e 1 Fund USD 5,00 Mio. 1 GIS 2,0 Mio. t 29.09.2008
GIS Experience (I) • GIS offers more flexibility to the host country and the investor country compared with JI • GIS offers the chance for revenues “up front” (after delivery of AAUs but before delivery of greening results) • There is a lot of preparatory workto accomplish in the host country before agreement on a binding contract can be reached • Art. 17 eligibility • legislative background, authorization to negotiate and sell on behalf of the host country • implementation of GIS management facility with sufficient capacity and resources • project/programme potential and pipeline • secondary legislation/tender documents (project selection process and criteria) 29.09.2008
GIS Experience (II) • GIS is less standardized – contracts are tailored to the specific needs of the involved parties • Negotiations take longer than for JI/CDM deals and almost always longer than expected • AAUs are a politically sensitive asset – there are reputational risks for both Seller and Buyer country (activities are closely watched in the market) • This risk can be mitigated by high quality GIS scheme, maximum transparency and coordinated and joint communication 29.09.2008
GIS Requirements & Expectations (I) • Hard greening (money needs to be used for supporting projects/programmes that lead to direct and quantifiable GHG emission reductions) • Certain percentage of purchase price may be used for soft greening in terms of raising public awareness to ensure the efficiency and market penetration of the direct GHG emission reduction measures • Certain percentage of purchase price may be used for administrative costs of GIS management facility • Other environmental benefits (reduction in air, and water pollution etc.) and positive social impacts are welcome and provide additional incentive for buyers 29.09.2008
GIS Requirements & Expectations (II) • Results are required to be monitored according to certain standards (in line with project size) • Traceability of Funds is essential (special budget line, managed disbursement of funds, escrow agent, auditing of reports etc.) • Reporting requirements and supervisory function of buyer • Clear and fair AAU-PA based on equal footing and risk sharing including (i) clear milestones with regard to spending funds for eligible projects/programmes and greening results and (ii) agreement on measures and remedies in case of non-compliance with milestones • Not AAUs are the asset but “greened AAUs” 29.09.2008