CDM –Functional Overview Senergy Global Pvt. Ltd.

About Senergy Global Provide end-to-end solutions in the CDM space. Right from PIN to end transactions. SGPL has got experience in developing renewables, energy efficiency and fuel switching CDM projects. Has registered 14 projects with the UNFCCC. Has a pipeline of more than 70 projects. Successfully traded & transacted more than 2million CERs/VERs/Off-Sets till date. Provides renewable energy related policy & regulatory advisory services.

What We Do? Develop project ideas and carries out feasibility studies Prepare the Project Design Document (PDD) and the project Methodology, including baseline studies and monitoring plans Guidance (presentations and documentation) for Host country approval. Facilitate quicker and smoother approval by DOE in validation stage. Registration of the project with the CDM Executive Board Prepare monitoring reports for timely verification Issuance of the CERs Organise transaction of CERs

Credibility An associate of Suzlon, the largest Wind Mill manufacturer in India. Commitment of service and delivery. Reputed Clientele. Transparency is ensured in client dealings. Adherence to market responsiveness to chart favorable growth path for clients. Proven track record in registering projects

CDM : The genesis United Nations Framework Convention on Climate Change (UNFCCC) Ultimate objective of stabilizing global greenhouse gas concentrations in the atmosphere CDM one of the flexibility mechanism defined under Art 12 The Kyoto Protocol agreed to reduce greenhouse gases by 5.2 % below 1990 levels (2.8 to 4.8 billion TCO2e) in the commitment period 2008-2012 Required ratification of 55 Parties representing 55 % of industrialized countries’ emissions (US constitutes 36 %, while Russia is 17.4%) for its entry into force Protocol is in force, since 16th Feb, 2005 (ratification by Russia to cross the magical 55%)

What is Carbon Credits or Finance ? Carbon finance, is nothing but an additional revenue stream emerging from a project based activity Passes the various additionality tests Meet all necessary compliances (viz. Kyoto Protocol) Has a positive sustainable development impacts for the host country

CDM & India More than 600 projects approved by MoEF Total registered project globally:844 India: 289(34%) 32 MN CERs issued to Indian projects, out of about 94 MN total issued CERs

Percent of CDM Projects by Country

Costs involved in CDM Project Cost Related to the development of the conventional project Transaction Cost related to the registration of project with the CDM EB

Means of Finance Equity Financing Long Term Lending Venture Capital Scheme Lease Financing Project Financing

Transaction Costs Project Proponent’s additional investment to monetize the CDM Revenues It Includes Costs towards consultants for developing CDM project (PDD) Costs towards validation of the CDM project Costs towards registration of the CDM project with EB Costs towards monitoring of emission reductions Costs towards verification of CERs and transaction costs

Transaction Costs CDM EB deducts 2% of the CDM revenues to Adaptation fund Transaction costs varies between 5% to 25% of the total revenues depending on the type and size of the project

CER Prices Carbon market is expanding and volume of CERs expected to be transacted by 2012 is about 1.5 billion Market Mechanism has kept the volatility of CER Prices Most of the CER transactions happen in the secondary market where the price range of 12 – 15 Euros are in vogue.

Taxation Issues CERs may be accounted as an intangible asset CERs may be treated as the exported commodity and thus the various sops available for the exported products can be availed CDM revenue may be accounted as “Other Income” and hence normative tax can be applied India is probably waiting for some accounting model to be formulated by the Annex-I countries

CDM Risks Risks related to the registration of the project Upfront Payment of transaction costs Risks related to existence of market beyond 2012

Thank you Thank you Naveen S Sr. Manager Senergy Global Pvt. Ltd. 9th Floor, EROS Corporate Tower Nehru Place, New Delhi – 110019 ns@senergyglobal.com Thank you