The KfW Carbon Fund - Chances for CDM Projects Regional Carbon Forum for the MENA countries Rabat, April

Transcription

1 The KfW Carbon Fund - Chances for CDM Projects Regional Carbon Forum for the MENA countries Rabat, April Alexander Luthe / Rainer Suennen KfW Carbon Fund Tel: /-2431 or alexander.luthe@kfw.de / rainer.suennen@kfw.de or carbonfund@kfw.de

2 KfW Bankengruppe in brief. Promotional bank of the Federal Republic of Germany. Founded in Shareholders: Federal Republic of Germany (80%), German federal states (20%). Balance-sheet total at the end of 2006: EUR 360 billion employees Rating: AAA/Aaa/AAA. 2

3 Brand Structure. KfW Entwicklungsbank (KfW development bank) finances investments (Financial Cooperation FC ) and accompanying consulting services in developing countries on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). 3

4 FC Activities in the MENA Region Regional Scope Lebanon Morocco Tunisia Palestinian Territories Syria Algeria Egypt Jordan Yemen 4

5 Financial Cooperation (FC) by KfW: Instruments Traditional Financial Cooperation loans and grants Extended for the account of the Federal Republic Financial Cooperation Development Loans Combination of Federal Budget Funds at low interest rates or grant funds with KfW funds Financial Cooperation Promotional Loans Funds raised by KfW in the capital markets 5

6 Commitments to major MENA Countries ( ) Egypt Tunisia Jordan Palestine Morocco Yemen Market Funds Budget Funds Commitments of KfW Entwicklungsbank in 2005: In total: EUR 1.9 bn thereof in MENA countries: EUR 281 m 6

7 Objectives of the Fund Background Kyoto-Protocol (Clean Development Mechanism) European Emissions Trading System (ETS), Linking Directive Purchase programme ( Buyer s Pool ) for project-based certificates Purchase of compliance tools for the ETS (CER s, ERUs, project-based EU-allowances) Commercial orientation KfW purchases as a trustee for participants in its own name, for the account of participants on the basis of individual Agency Contracts between KfW and each participant 7

8 Contractual Structure. Project 1 Participant 1 Project 2 Project 3 E R P A KfW Project Portfolio ( KfW Carbon Fund ) Agency contracts Participant 2 Participant 3 Project n Participant x 8

9 Objectives of the Fund Project development function: Promotion of projects and measures contributing to reduction of global Greenhouse Gas Emissions technology transfer sustainable development in the host country Provide a service instrument for German and European enterprises wanting to use project-based certificates for compliance purposes alternative to own measures and emissions trading no internal capacities required risk mitigation by diversification off-take contracts with suppliers of certificates ( ERPA ) additional cash flow up to 2012 with option to extend fixed or variable pricing 9

10 Fund Volume of 1st Tranche. Volume (1st tranche*): EUR 84 million KfW s contribution from own funds: up to EUR 10 million German Government ( seed money ): EUR 4 million Acquisition of participants for 2nd tranche ongoing (target volume: EUR 100 million) 10

11 Investment Policy Eligible Project Types Generally there are no specific limitations Exclusions in line with Kyoto and ETS: nuclear power projects large hydro power projects (as per objectives of World Commission on Dams) until further notice LULUCF-activities 11

12 Purchase Contracts with Sellers (I) Long-term purchase agreement (forward contracts) Market-based pricing (fixed or variable pricing) contract period up to 2012 Flexible contract terms option on additional amounts possibility to extend contract period past 2012 early delivery option possible purchase with consortium or syndication bundling of smaller projects 12

13 Purchase Contracts with Sellers (II) Payment on delivery pre-financing on a case-by-case basis; to be decided by KfW s loan departments; customary terms and conditions No assumption of Kyoto risks as a rule, registration, transfer risks etc. remain with seller 13

14 Financing Support for CDM /JI Project Preparation. Financing of preparatory measures: Design of PDDs, Business Plans, Environmental Impact Assessment Reports or support of validation costs Financial support shall not exceed 50% of the contract value for the preparation of the respective documents Maximum amount of KfW financing: 50,000 Repayment by deduction from the first payment of KfW for CERs delivered due upon the first delivery of Certificates 14

15 CO 2 - certificates and project financing Improvement of profitability country project-type IRR without IRR with certificates certificates Rumania district heating 10.5 % 11.4 % (+0.9) Costa Rica wind energy 9.7 % 10.6 % (+0.9) Jamaica hydro power 17.0 % 18.0 % (+1.0) Morocco wind energy 12.7 % 14.0 % (+1.3) Chile hydro power 9.2 % 10.4 % (+1.2) Costa Rica hydro power 7.1 % 9.7 % (+2.6) Guyana biomass 7.2 % 7.7 % (+0.5) Nicaragua biomass 14.6 % 18.2 % (+3.6) Brasil biomass 8.3 % 13.5 % (+5.2) Latvia landfill gas 11.4 % 18.8 % (+7.4) India landfill gas 13.8 % 18.4 % (+5.4) source: etsg 15

16 Time Schedule official launch (floating of first CDM-tender): June 2004 more than 200 project proposals received; Various term sheets signed ERPAs: - HFC23/ India - Biomass / India - Landfill / Brazil - Wind energy / India - Wind energy / Egypt - Hydro Power / Egypt conclusion of ERPAs ongoing delivery of certificates until

17 Current Project Portfolio Technical and regional distribution of factored projects Landfill Gas 25% Industrial Gases 1% Latin America 25% Fossil Fuel Switch 4% Coal Mine Gas 6% Renewable Energy: Hydro 33% Asia 53% Africa 22% Renewable Energy: Wind 31% according to potential CER volume according to potential CER volume 17

18 Outlook Continuous purchase Programme for compliance certificates Own underwriting capacity Second Tranche of KfW carbon fund under preparation Volume: EUR 100 million Targeting in particular smaller European enterprises Post Kyoto Initiative Long-term perspective for projects Regulatory framework required 18

19 The KfW Carbon Fund For more information: KfW Carbon Fund Palmengartenstrasse Frankfurt Tel: Fax: carbonfund@kfw.de