March, 2009

Environment Indoor air improvementIndoor air improvement Local land, water, air, flora & fauna protectionLocal land, water, air, flora & fauna protection Global climate, biodiversity & water quality gainsGlobal climate, biodiversity & water quality gains Economic development Employment Employment Greater productivity Greater productivity Income generation Income generationModernEnergyMeans… Quality of Life Better health Better health Time for education Time for education Reduced drudgery for women and children Reduced drudgery for women and children

Public Purpose Specialty Organizations (ie ) The Enterprise-Centered Model The Basic Tenets Investors - Managed Accounts Donations & Grants Borrowings Services SME Entrepreneurs Capital Their Customers Carbon Revenues 1. Blending Resources 2. Specialty Organizations 3. Expertise + Money 4. Local Empowerment 5. Sustainable Business

Other Loans & Investment Relationships Donations – Grants & Energy Cures Borrowings – People + Planet Notes Services SME Entrepreneurs & MFIs Capital Principal, Interest & Dividends Development Benefits Environmental Benefits Carbon Revenues Operations DebtEquity End-user Finance

Other Loans & Investment Relationships Donations – Grants & Energy Cures Borrowings – People + Planet Notes Services SME Entrepreneurs & MFIs Capital Principal, Interest & Dividends Development Benefits Environmental Benefits Carbon Revenues Operations DebtEquity End-user Finance $1.00$0.20$0.10 $1.07$0.23 2/3 10%, 7 y 1/6 12%, 9 y 1/6 11%, 5 y 10.7% return Provision for financial losses: 9.2% of P + I + D … 10.7% becomes 8.7% On $1.00 …equals 7.3% on $1.07

Sensitivity of Return to Amount Borrowed of each $1.30 Required 10.7% hurdle rate, 9.2% losses, 1.30 formula 7.3% base case Borrow $1.07 Invest $1.00 Grants + Carbon = $0.23 % of full cost borrowed

Carbon Monetization To E+Co Enterprises Investment Capital Grants, Donations and Carbon Value Energy for People and Planet $190 million Energy Enterprises and Customer Finance PeoplePlanet $150 million $40 million 24.5 million with modern energy 19.5 million Metric tons of carbon dioxide saved 335 investments Financial Leverage $0.9 billion © E+Co, Sept 2008 © E+Co, Sept 2008 $21 million $211 million

Fund Manager Biogas Fund Step 1 Investors Donors or Sponsors Clean Development Mechanism **Households: 20,000  200,000 Fund: Euro 6.3 million  E 60 million Down Payments Monthly Payments Carbon Credit Buyer Capital Cost approvals Household Biogas Fund - Step 1  20,000 Households**

20,000 household biogas units serving 100,000 people in rural Bangladesh Annual CO2 benefit – 80,000 tonnes Required investment – Euro 6.3 million –From investors  Euro 6.0 –From donors or sponsor investors* (one time and start-up costs)  Euro 0.3 Cost Reduction to Households from [6 year] sale of carbon credits  23% Return to Investors  6.5% **Full Program and Fund  200,000 units (Euro 60+ million) serving 1 million people *Sponsor investors might include EC “Patient Capital Initiative” Hurdles: CDM methodology, CDM process and approvals, timely roll-out, integration of diverse elements, pricing and cost

1-Rural Household 2-Biogas Construction Company 3-Microfinance Institution 4-Enterprise Investment Company 5-Greenhouse Gas Approval Mechanism (CDM)‏ 6-Company in Need of GHG Benefits 7-Innovation Funding Organization 8-Catalyst January 2006 Household Biogas Fund Example

1-Rural Household 2-Biogas Construction Company 3-Microfinance Institution 4-Enterprise Investment Company 5-Greenhouse Gas Approval Mechanism (CDM)‏ 6-Company in Need of GHG Benefits 7-Innovation Funding Organization 8-Catalyst Income per hh at $1080- $252 py Builds hh biogas units At $400 w. 20% margin MFI-makes loans 2 yrs, 1% month +/- Supports enterprises Supports sustainable initiatives Needs carbon offsets Organizes purchases and sales of GHGs

1-Rural Household 2-Biogas Construction Company 3-Microfinance Institution 4-Enterprise Investment Company 5-Greenhouse Gas Approval Mechanism (CDM)‏ 6-Company in Need of GHG Benefits 7-Innovation Funding Organization 8-Catalyst Income per hh at $1080- $252…dp=$100 w/o and $77 wCO2e Enterprise 20,000 $400 w/ 20% margin if $800k w/c Mfi-20,000 loans at $231 2 yrs, 1% month + adj Investment co 2 year $824,000 w/c loan + services 600,000 tonnes of GHG offset for $3,600,000+/- Mkt ~ $6 per tonne per yr For 10 years

1-Rural Household 2-Biogas Construction Company 3-Microfinance Institution 4-Enterprise Investment Company 5-Greenhouse Gas Approval Mechanism (CDM)‏ 6-Company in Need of GHG Benefits 7-Catalyst Funding Organization 8-Catalyst Income per hh at $1080- $252…dp=$100 w/o and $77 wCO2e Enterprise 20,000 $400 w/ 20% margin if $800k w/c Mfi-20,000 loans at $231 2 yrs, 1% month + adj Investment co 2 year $824,000 w/c loan + services Support for start-up & services 600,000 tonnes of GHG offset for $3,600,000+ $6 per tonne per yr For 10 years

1-Rural Household 2-Biogas Construction Company 3-Microfinance Institution 4-Enterprise Investment Company 5-Greenhouse Gas Approval Mechanism (CDM)‏ 6-Company in Need of GHG Benefits 7-Catalyst Funding Organization 8-Catalyst January 2006 Income per hh at $1080- $252…dp=$100 w/o and $77 wCO2e Enterprise 20,000 $400 w/ 20% margin if $800k w/c Mfi-20,000 loans at $231 2 yrs, 1% month + adj Investment co 2 year $824,000 w/c loan + services Support for start-up & services 600,000 tonnes of GHG offset for $3,600,000+ $6 per tonne per yr For 10 years 4-6-8% IRR PKG

1-Rural Household 2-Biogas Construction Company 3-Microfinance Institution 4-Enterprise Investment Company 5-Greenhouse Gas Approval Mechanism (CDM)‏ 6-Company in Need of GHG Benefits 7-Innovation Funding Organization 8-Catalyst Euro 1 = Tk 81 = US Income per hh at Tk$ 67,000 to to 20% Builds hh biogas units At Tk 25,000 w. 20% margin MFI-makes monthly loans For 3 yrs, service charge of 6% (simple) per year 15% down payment Supports enterprises Supports sustainable initiatives Needs carbon offsets Organizes purchases and sales of GHGs

Dot 1: Our “typical” household has income of Tk 67,000 to 79,000. The household spends between 17% and 20% of its income on energy sources (liquid fuels, batteries, solid fuels). A new biogas unit would have a “typical” capacity of four cubic meters. There are smaller and larger units that accommodate smaller or larger incomes or greater or lesser needs. All-in this translates to a capital cost of Taka 25,000 Our household can afford an upfront payment of 15% A microfinance institution offers loans on the following terms: up to 85% of the cost, repayable over three years on a monthly basis with 6% annual simple interest / service charge added to the initial cost (thus for 3 years add 18% to the amount being financed) What would be the new monthly cost for the household? What would be the incremental savings? What happens if a 25% capital “subsidy” or other price reductions are offered? What does that mean in terms of increasing the affordability of these units to lower income groups. Next: the role of avoided CO2 if monetized. Connect the dots … update

1-Rural Household 2-Biogas Construction Company 3-Microfinance Institution 4-Enterprise Investment Company 5-Greenhouse Gas Certification / Approval Mechanism (CDM CERs or VERs)‏ 6-Company in Need of GHG Benefits 7-Innovation Funding Organization 8-Catalyst … YOU! Euro 1 = Tk 81 = US Income per hh at Tk 67,000 to 79,000py… to 20% …Tk 11,400 to 15,800 py … TK950 to TK1317 per month Builds hh biogas units At Tk 25,000 w. 20% margin MFI-makes monthly loans For 3 yrs, service charge of 6% (simple) per year 15% down payment Supports enterprises Supports sustainable initiatives Needs carbon offsets Organizes purchases and sales of GHGs Down payment Of Tk3750 … Mo PMT of Tk697 Initial “cost”= 3750 … monthly savings of 253 to 620 … simple payback of 6 to 14 months

1-Rural Household 2-Biogas Construction Company 3-Microfinance Institution 4-Enterprise Investment Company 5-Greenhouse Gas Certification / Approval Mechanism (CDM CERs or VERs)‏ 6-Company in Need of GHG Benefits 7-Innovation Funding Organization 8-Catalyst … YOU! Euro 1 = Tk 81 = US Income per hh at Tk 67,000 to 79,000py… to 20% …Tk 11,400 to 15,800 py … TK950 to TK1317 per month Builds hh biogas units At Tk 25,000 w. 20% margin Supports enterprises Supports sustainable initiatives Organizes purchases and sales of GHGs Down payment Of Tk3750 … Mo PMT of Tk697 Initial “cost”= 3750 … monthly savings of 253 to 620 … simple payback of 6 to 14 months Revised initial cost = 3059 … revised monthly savings of 382 to 749 … simple payback of 4 to 8 months 2.5 tonnes py Euro 6 pt py 5 year forward purchase … NPV of 2.5*6*5 at 10% discount rate equals TK4606 = 18.4%

New PMT 25,075versus 20,455Add: finance charge ,335New Finance Amt 3,059New Down Payment 3750versus305915%20,394Adjusted Cost Down Payment 25,000Original Cost 18.4%equals4,606NPV of CO2e 10%Discount Rate TK per 2.5 tonne 2.5 TPY 54321YEAR

Energy to 2030 Up 55% 84% fossil fuel Coal up 73% 74% from DCs 45% from India and China $22 Trillion 1.4B un-electrified 2.6 B using traditional fuel ---IEA WEO ’06 and ‘07 Environment GHG since 1970 up 70% Faster & more certain projections = greater certainty Drought & flood intensity & frequency m in Africa to experience “water stress” 20-30% plant extinction Hardest hit: sub-s Africa, Asian Megadeltas, small islands ---IPCC 4 th Assessment Development 1B in extreme poverty vs B in ’90 41% Africa versus 47% Largest #s and least progress in Africa, Southern Asia and Latin America 7 of 8 groupings will not meet MDGs Climate will impede already stalled MDG progress ---UN MDG Progress Report ‘07 Governance ODA GEF UNFCCC MDBs / IDA DGIS / GTZ et al Business Clean technology investment Carbon finance-VERs, CERs SME finance Micro-finance Quality of Life People + Planet

Investment Capital Donations and Carbon Value Energy for Environment And Development $190 million Energy Enterprises and Customer Finance PeoplePlanet $150 million $40 million $202 million 17.1 million with modern energy 16.7 million Metric tons of carbon dioxide Saved* 374 investments $213 million Financial Leverage $1.4 B © E+Co, Oct 2007 © E+Co, Oct 2007 $20 million carbon monetization To E+Co enterprises ~6% P+P Notes plus Managed Accounts *Monetize 4-6 mts at ~$11 pt, with enterprise