1. The Austrian JI/CDM Programme Status, Experience, Outlook
Sasa Eichberger
The Austrian JI/CDM Programme
Status, Experience, Outlook
Moscow, 29 April 2008
Füllung weiß/ keine Füllung

2. Introduction to the Austrian JI/CDM Programme Experience 2007
Outlook 2008
Summary and Closing

3. Introduction to the Austrian JI/CDM Programme

4. Kommunalkredit Public Consulting (KPC)
Kommunalkredit Group Tuerkenstrasse 9, 1092 Vienna
Vienna
Employees: 49
Cooperation with CEE Region on behalf of Austrian Development Agency since 1994, renewed 2007
Management of the Austrian JI/CDM-Programme since 2003, Fund Volume EUR 399 million
100% daughter company of Kommunalkredit Austria AG: Austrian bank specialized in public finance in Austria and CEE
Management of the Federal Environmental
Support Schemes in Austria and for projects abroad since 1993
Management of the Austrian Climate and Energy Fund since 2007

5. Austrian JI/CDM Programme - Overview
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 399 Mio.
Application
3 Facilities 5,45 Mio. t CO2e
1 Fund USD 5,00 Mio.
Type Volume (t CO2e)
15 JI ,8 Mio.
35 CDM ,0 Mio.
31,8 Mio.
Management of Austrian JI/CDM Programme by KPC
Current Portfolio
Current Portfolio
Sourcing of eligible projects
Funding Contracts for Project Development
Negotiation and Conclusion of ERPAs
Recommendation to Austrian JI/CDM Commission
Marketing & Stakeholder Relations
ERPA Administration
Monitoring
Payment on Delivery
max. 50% Prepayment
Risk Management
Volume Target ( ): Mio. t CO2e
Individual
JI/CDM Projects
Carbon Facilities/Funds
GIS

6. Regional distribution of Project Pipeline 161 projects as of 1 January 2008

7. Memoranda of Understanding – MoU
Competence: Austrian Federal Minister of Agriculture, Forestry, Environment and Water Management
& Host Country Ministry
Aim: Basic agreement on co-operation Facilitation of project implementation
Contents: Prioritised project categories Basic agreement on transfer of CERs & ERUs & AAUs
23 signed: Argentina, Bolivia, Bulgaria, China, Colombia, Czech Republic, Ecuador, Estonia, Ethiopia, Ghana, Hungary, Indonesia, Latvia, Mexico, Mongolia, Morocco, New Zealand, Peru, Phillipines, Romania, Slovakia, Tunisia, Vietnam.
under negotiation/in preparation: Brazil, Chile, Russia, South Africa, Ukraine, ...

8. Experience 2007

9. Market 2007 Joint Implementation
Russian approval procedure in place
JI host countries within EU busy with NAPs, EU-ETS and GIS, JI potential decreasing, potential left for sectors not covered by EU-ETS
Main competitors governmental programmes, Japanese companies active in compliance and voluntary market
Increased purchasing targets for governmental purchasers
Track 2 under JISC proved to be successful and receives confidence
Determination of JI projects is still very time-consuming
Further market development (track 1 eligibility, GIS)

10. JI Market 2007 Regional Experience
Russia
Increased interest from Russian companies in JI
Large utilities are preparing project pipeline and own tender procedures
Competition from large banks and funds
Ukraine
Prepayment still important but difficulties to obtain bank guarantee
Successful financial closing achieved for some of our projects
Other JI Region
Slow approval process, focus on EU-ETS and GIS
Decreased interest in JI from host countries and companies

11. Market 2007 Clean Development Mechanism
China dominant in number and volume of new Projects
India dominates issued CER market
Trading in secondary CER market, structured products
Increased purchasing targets for governmental purchasers
Main competitors corporate compliance buyers, funds and strategic investors
First year of CER deliveries allows closer look at project performance
Additionality has become the issue at UNFCCC level
Project Quality (large hydros etc.) gets more attention

12. CDM Market 2007 Regional Experience
China
Sellers look for a stable partner, multiple projects with one partner
Governmental background is an asset
Buyers requested to cover project development costs
More and more brokered transaction
India
CERs sold off in single tranches after issuance, some Projects offered on forward basis in advanced stages, very high price expectations
New Programmatic Approaches supported by government
LATAM
High price expectations
Many international brokers and big aggregators (also from US)
Project financing remains a problem for remaining projects
South East Asia
Lots of project potential, Japan is dominant

13. Austria and CDM in Africa African Initiative launched beginning of 2007
Identification of four target countries which are supported with extra funds: Ghana, Ethiopia, Uganda, Tanzania
Signing of MoU with Ghana and Ethiopia
Increased funding for project development (PIN/PDD) for all African host countries provided by Environmental Ministry
First projects are under development in Madagascar (small hydro), Tanzania (small hydro and CHP) and Uganda (small hydro)
Most local interest in landfill gas and biodiesel
South African market is the most mature (lots of local expertise)
Lack of equity and debt financing most imminent problem

14. Project Performance of Austrian Portfolio First CERs Delivered in March 2007
10 projects have delivered in 2007
6 China, 3 India, 1 Egypt
total volume delivered approx. 1 Mio. t
More than 90% of contracted CERs have been delivered out of those 10 projects (compared to contract value not PDD value!)
Projects that have delivered show good performance, however there are some projects with delays on the way to physical implementation
Approx. 2-3 months delay compared to first scheduled date of delivery (mostly caused by delays in verification & certification)

15. Outlook 2008

16. Our Strategy for 2008 Sourcing Strategy
Larger volumes, bundling of smaller projects
Based on forward ERPA at early to medium project development stage
Participation in tenders also in JI
Even more emphasis on project quality!
Follow-up projects with established partnerships
Green Investment Schemes
Sourcing Strategy
Replacement Strategy
Replacement Strategy will be defined based on further experience with performance
Participation also in secondary market

17. Focus Area 2008 Green Investment Schemes
Austria will be eligible under Art. 17 in April 2008
All national legislation in place
First negotiations with potential host countries have started end of 2007
Signing of MoUs with host countries to facilitate GIS
Volume target of approx. 10% of total purchasing target
2-3 transactions envisaged
Focus on renewable energy and energy efficiency
GIS structure includes a certain part of soft greening measures, focus on hard greening with project-based and programmatic approach (environmental support schemes)

18. Clean Development Mechanism
Focus areas 2008 JI and CDM
Russia and Ukraine as major markets
Participation in tenders from large utilities
Establishment of Strategic Partnerships
KPC is represented with a branch in Moscow
Joint Implementation
Clean Development Mechanism
China and Asian region as major market
Central Asia as new market
Follow-up projects within established partnerships
Continued Austrian initiatives in Africa

19. Summary & Closing

20. We are looking forward to cooperating with you!
Your benefits
Support in project development by network sharing
Local knowledge through our team of experts
Long term experience in the carbon market
One of the largest governmental buyers
Optimal transaction structures and tailored ERPAs
Long term co-operation with reliable partners
We are looking forward to cooperating with you!

21. Austrian JI/CDM Programme www.ji-cdm-austria.at