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 PROJECT IDEACONSTRUCTIONFINANCINGFEASIBILITY STUDY MAKE PDD OPERATION REGISTERVALIDATEISSUE CERsVERIFY STAKEHOLDER COMMENTS TEST ADDITIONALITY USE OR MAKE METHODOLOGY NEGOTIATE ERPASELECT BUYER PREPARE PIN and TERM SHEET DELIVER CERs CDM / JI DEVELOPMENT PHYSICAL PROJECT DEVELOPMENT COMMERCIAL DEVELOPMENT STAKEHOLDER COMMENTS MONITOR LETTER OF APPROVAL GENERATE CERs SELECT BUYERSELL AND DELIVER

4 PIN and PDD PIN Marketing document Target group: buyers Purpose: a contract, a prepayment So: be concise, clear, highlight the most attractive features of the project Think from the buyer’s perspective: Address risks and measures to manage them Convince that the project will take place Convince that the project owner is competent and stable PDD Formal registration document Target group: validator and local CDM office Purpose: registration as a CDM project So: be complete, accurate, and realistic, cover the whole process Think from the validator’s perspective: Provide underlying documentation Be consistent in arguments Be conservative

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 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 2.Credible baseline and adequate volume –Carbon credit volume should be sufficient to cover CDM or VER transaction costs –Suggested minimum threshold: 20 ktCO 2 per year or 100 ktCO 2 total before What buyers look for (1)

7 What buyers look for (2) 3.Commercially viable technology 4.Competent, credible counterparties clear champion and institutional arrangements sound legal arrangement -- who owns, who operates, what type of agreement between project participants 5.Viable business + operation model 6.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:

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 RelevanceConsistency

11 B. Application of a baseline and monitoring methodology  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 Transparency

12 C. Dates  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 Accuracy

13 D. Environmental impacts  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 Complete- ness

14 Stakeholder comments  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. Complete- ness Transparency

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

16 Contact details  Adriaan Korthuis  Phone  climatefocus.com 