1. Carbon Finance in Renewable Energy Projects Arturo Brandt Senior Emissions Broker Latin American Representative   

2. TFS Green Awards
TFS is an international commodities broker in energy, finance, and emissions, and is part of one of the three largest brokerages in Europe.
Our commodities include Energy: Emissions, Coal, Natural Gas, Distillates, Naptha, etc, and Finance: FX, Options, Swaps, etc, and Other: Pulp and Paper, Freight, Precious Metals
TFS Green has received numerous awards by the industry:
2009 TFS received an unprecedented 16 Winner or Runners Up awards in the 2009 Environmental Finance Awards, including "Best Primary Originator for GHG Emissions Kyoto Projects Credits"
2008 “Broker of the Year” award by Energy Risk
2008 Appointed Joint Exclusive Broker to the Asian Development Bank
2008 “Deal of the Year” award by Energy Risk for the first Gold Standard CDM project in China
2008 “Best Broker” by Point Carbon

3. TFS Network of Offices LONDON COPENHAGEN FRANKURT OSLO BEIJING
HONG KONG
SINGAPORE
TOKYO
MANILA
HOUSTON
NEW YORK
STAMFORD
LOS ANGELES
MEXICO CITY
SANTIAGO
SAO PAULO
MELBOURNE
PERTH
SYDNEY
JOHANNESBURG

4. What role does TFS Green play?
TFS is a pure brokerage firm
Does not buy for its own portfolio, so no conflict of interest, wants best price for CERs and optimal project financial structure
Provides access to best-CER-value buyers to Sellers; Buyers include governments, state utilities, energy traders, banks, regional/national financial institutions, carbon funds, hedge funds, etc.
Financial expertise to assist in financial structure of project
Provides good referrals for technical project development

5. What role does TFS Green play?
TFS is a pure brokerage firm
Negotiates ERPA and provides clear and transparent communication to Seller on standard commercial terms and conditions
TFS is an independent market intermediary regulated by the Financial Services Authority in the UK; TFS Green HQ based in London with global offices
TFS Green engages in projects from the early stage, at feasibility study stage or PIN, to registered and issued CDM projects 5

6. What role does TFS Green play?
TFS Green is part of Tradition, one of the largest and most successful interdealer brokers across the world, employing over 2,250 people.
Since 2001, Tradition has been prominent in the renewable energy and emissions markets in Europe, the US and Asia Pacific. In 2005, TFS Green began building a presence in the Clean Development Mechanism (CDM), Joint Implementation (JI) and Voluntary Emissions Reductions (VER) markets. TFS Green provides wide and, most importantly, transparent access to the carbon market. Our detailed knowledge of current buyers and sellers, combined with our understanding of the likely future demand and supply for CERs enables us to identify appropriate, interested and willing counterparts for a wide variety of carbon credit transactions. TFS Green has a proven track record of successful transactions in varying sizes, technologies and locations.

7. TFS’ EXPERIENCE in CDM
TFS has brokered projects across a wide range of technologies, including Renewable Energy – Hydro, Biomass, Wind, Waste Heat Recovery, Landfill to Energy, HFC, N2O, as well as others
TFS Green has brokered over 40 Million CERs to date from projects around the world.
Recent deals include:
First Gold Standard Programmatic CDM project in Mexico, using energy efficient light bulbs
First Gold Standard CDM Project in China, Windpower
First CDM project in Singapore
3.5million HFC23 CDM project in India
2 x Super Critical & Ultra Super Critical Projects in China from the largest State owned Power Co
4 windfarms in China generating >2 Million CERs until 2012
Wide range of renewable energy projects in Southeast Asia, Asia, Latin America, Africa

8. New ways of doing carbon projects: Programmatic CDM
TFS Green brokered the first Gold Standard Programmatic PoA: Light Bulb Replacement in Mexico, requesting registration
Compact Fluorescent Light Bulbs (CFL) given free to residential households, with trade-in of existing incandescent bulbs
First CDM Project Activity (CPA) will give out 1M CFLs to generate 120K CERs until 2012
Aim to roll-out 30M CFLs across Mexico
Project is registered for CDM
The projects will generate significant social benefits - in Mexico, for the poorest 40% of the population, changing 4 lights to CFLs will save every year the equivalent to around one week’s income (over $20USD pa).
Households will be eligible for 4 bulbs, which together would cost almost 70% of one week’s wages and if not distributed for free, would be highly unlikely to be purchased.

9. Selling your CERs from Renewable Energy Projects
CDM Projects → 4,588
CDM Renewable energy projects worldwide → 2,709

10. Selling your CERs from Renewable Energy Projects
Expected kCERs until 2012 → 2,781,335
Issuance sucess average to date → 97,4%

11. Selling your CERs from Renewable Energy Projects
CDM projects → 805
CDM renewable energy projects → 386

12. Selling your CERs from Renewable Energy Projects
Expected KCERs until 2012 → 393,565

13. Selling your CERs from Renewable Energy Projects
Renewables in LA by type
Number of CDM projects from renewable energy → 386

14. Selling your CERs from Renewable Energy Projects
KCERs until 2012 in LA by renewable CDM projects
Total KCERs until 2012 from renewables energy projects→ 113,899

15. Selling your CERs from Renewable Energy Projects
CDM wind projects by MW
Total MW from wind CDM projects → 2,515

16. Selling your CERs from Renewable Energy Projects
Hydro projects by MW
Total MW by hydro projects → 5,316

17. Selling your CERs from Renewable Energy Projects
KCERs until 2012 by biomass
Expected KCERs until 2012 by CDM biomass projects → 39,415

18. Selling your CERs from Renewable Energy Projects
Peruvian CERs
Number of CDM Projects → 29
Expected KCERs 2012 → 14,714

19. Selling your CERs from Renewable Energy Projects
Conclusions
→ 48 % of the CDM projects are renewable energy projects (386 out of 805)
→ 28.9% of the CERs to 2012 come from CDM renewable energy projects
→ 89% of CERs to 2012 from CDM renewable energy projects come from 2 type of projects (hydro, biomass)
→ 97% of CERs to 2012 from CDM renewable energy projects come from 3 type of projects (hydro, biomass and wind)
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20. Selling your CERs from Renewable Energy Projects
Conclusions
→ No solar, no tidal and just 4 CDM geothermal projects (2 in Salvador)
→ CDM Wind projects (MW)→ 78% in 2 countries (Mexico (51%) and Brasil)
→ CDM Hydro projects (MW)→ 70% in 2 countries (Brasil (49%), Peru)
→ Biomass CDM projects (kCERs 2012) → 72% in one country (Brasil) and 83% in two countries (Brasil and Chile)
→ 46% of the total expected CERs until 2012, came from Brazil, and 17% come from Mexico ( 63% from 2 countries and 73% from 3 countries if we add Chile) out of 20 countries
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21. Selling your CERs from Renewable Energy Projects
What can the “carbon market” do for your project?
→ At 15 USD per CER, IRR increase 1.5%, at USD 20 per CER IRR increase 2,2% within
→ ERPA serves as a debt guarantee in private banking
→ Buyers can provide funds to develop your project → equity or debt
→ Up front payment → according to your requirements (guarantees!!)
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22. Selling your CERs from Renewable Energy Projects
What can the “carbon market” do for your project?
→ To sell in advance is a guarantee income (fixed cash flow)
→ Less diversification (less stakeholders involved in a project finance schemme)
→ Development cost can be paid by the buyers → CDM project cycle
→ Fix incertainty post 2012 → selling in advance
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23. Selling your CERs from Renewable Energy Projects
Price Trends in a Post 2012 Regime
→ CER prices can go down !!! (from EUR 21 to EUR 7,7 on spot market)
→ Country Eligibility (Future Annex 1 Countries : China? India? Brazil? Mexico? ….)
→ Projects Eligibility (No? : HFC,N2O) - (Yes?: CCS, REED, Nuclear)
→ CERs eligibility within EU ETS. (policy makers can manage the CERs price!)

24. Selling your CERs from Renewable Energy Projects
Price Trends in a Post 2012 Regime
→ AAUs being bought by some Annex 1 countries (Japan, Spain, Portugal, etc)
→ Looking for higher price? improve your CER quality !!! (Gold Standard)
→ USA on board ? More demand, but not higher price
→ Big Hydros: > 20 MW ( WDC Check List)
→ Prices post 2012 are lower than pre 2012 !!!

25. Selling your CERs from Renewable Energy Projects
CDM in a Post Kyoto 2012 regime
→ Programmatic CDM (EE, small hydros)
→ Sectorial CDM (cement, aluminium, energy, iron, steel)
→ Additionality issues ( technologies, bench mark base line)

26. Selling your CERs from Renewable Energy Projects
Alternatives to sell CERs
→ Fix price
→ Floating price (floor & cap)
→ Spot price
→ Public bid (TFS Platform)

27. TFS’ VALUE PROPOSITION
What are Sellers looking for?
Best value
Competitive bidding across many Buyers
Comparisons across fixed/floating structure
Competitive bidding process
Wide network of strong buyers
Guidance on industry standards
Exclusive representative to ensure transparency
TFS is objective, does not buy or sell CERs, represents both sides fairly
TFS is rewarded only on success
TFS has a track record of successful projects
Target Buyers with A-rating, government backing or strong financial assets
Matching to Buyers in the same field and with same strong reputation as Seller
Strong partner
Equality
Negotiate with the same level of expertise and understanding of industry standards as Buyer, to ensure a fair and effective negotiation
What are Buyers looking for?
Transparency
Transparent marketing process, so Buyers are not “bidding against themselves”
Important as this allows them to submit best bid
The longer the negotiation, the higher the costs
Prefers efficient path to signed contract, which needs strong communication and guidance for both Buyer and Seller
Efficiency
Reliability
Projects should have a good probability of delivering the expected volume of CERs 27

28. Thank You Arturo Brandt Senior Emissions Broker
Latin America Representative
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