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PDD and PIN preparation

PDD and PIN preparation. Technical Workshop on CDM Paramaribo, 18 June 2008 Adriaan Korthuis. Contents. PIN What and why How PDD What and why How. Project development. PHYSICAL PROJECT DEVELOPMENT. PROJECT IDEA. FEASIBILITY STUDY. FINANCING. CONSTRUCTION. OPERATION.

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PDD and PIN preparation

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  1. PDD and PIN preparation Technical Workshop on CDM Paramaribo, 18 June 2008 Adriaan Korthuis

  2. Contents • PIN • What and why • How • PDD • What and why • How

  3. Project development PHYSICAL PROJECT DEVELOPMENT PROJECT IDEA FEASIBILITY STUDY FINANCING CONSTRUCTION OPERATION CDM / JI DEVELOPMENT MAKE PDD VALIDATE REGISTER MONITOR VERIFY ISSUE CERs USE OR MAKE METHODOLOGY STAKEHOLDER COMMENTS LETTER OF APPROVAL TEST ADDITIONALITY STAKEHOLDER COMMENTS COMMERCIAL DEVELOPMENT SELECT BUYER NEGOTIATE ERPA DELIVER CERs PREPARE PIN and TERM SHEET SELECT BUYER SELL AND DELIVER GENERATE CERs

  4. PIN and PDD

  5. 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

  6. 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.

  7. 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

  8. Examples of PINs • Worldbank: www.carbonfinance.org

  9. Elements of the PDD • A. General description of the small scale project activity • B. Application of a baseline and monitoring methodology • C. Duration of the project activity / crediting period • D. Environmental impacts • E. Stakeholders’ comments • Annexes • Annex 1: Contact information on participants in the proposed small scale project activity • Annex 2: Information regarding public funding • Annex 3: Baseline information • Annex 4: Monitoring Information

  10. A. General project description • Project description, contribution to sustainable development • Project participants • Technical description • Location • Summary of emission reductions Relevance Consistency

  11. B. Application of a baseline and monitoring methodology Transparency • Selection of methodology – justification and application • Description of project boundary, sources and gasses • Be complete and follow the methodology strictly • Identification of the baseline scenario • Support this by adequate evidence • Identify risks of the baseline, e.g. if the situation continues over time • Take care of logic in the PDD • Demonstration of additionality • Be complete, convincing, tranparant, well documented etc • Inventory of data • Ex-ante estimation of emission reductions • Monitoring plan Conservative-ness

  12. C. Dates Accuracy • Starting date: the day that construction starts • Crediting period: • Single period of 10 years OR • Renewable period of 3 * 7 years • Check of validity of the baseline • Check of validity of assumptions (e.g. additionality) • Update the baseline

  13. D. Environmental impacts Complete-ness • Describe environmental impacts • Carry out Environmental Impact Assessment if required by local law, and if impacts are considered considerable • Add the EIA to the PDD

  14. Stakeholder comments Transparency Complete-ness • Local stakeholders must be consulted • Following local procedures • Comments of stakeholders must be described • Who was invited and how • Who was there • What information was provided • How discussion was organised • Which comments were given and concerns were raised • Report on how these comments were taken into account.

  15. Examples of PDDs • UNFCCC-website: cdm.unfccc.int – Project activities

  16. Contact details • Adriaan Korthuis • Phone +31 10 217 5993 • E-mail a.korthuis @ climatefocus.com • www.climatefocus.com

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