Asian Development Bank Results Based Finance for Mitigation The Future Carbon Fund way ! Asian Development Bank

Asian Development Bank An Introduction

Asian Development Bank An Introduction

ADB Climate Finance (2015) By Sector By Region Total Climate Finance: $2.648 billion Mitigation: $2.367 billion Adaptation: $281 million Note: In addition, external resources ($239 million) and technical assistance ($29.5 million) to climate support. 4

Carbon Market Program Capacity Development Trust Funds Technical Support Facility (TSF) Asia Pacific Carbon Fund (APCF) Future Carbon Fund (FCF) Japan Fund for the Joint Crediting Mechanism (JFJCM) Capacity Development 2006 onwards Carbon Finance 2007-2014 KP-1 Carbon Finance 2009-2021 KP-2 Carbon Finance 2014 onwards TSF – Commenced in 2006 Implemented through several Technical Assistance TA 6363: Preparing Clean Energy Projects Eligible for the Clean Development Mechanism TA 6438: Implementation of the Technical Support Facility under the Carbon Market Initiative TA 8223: Supporting the Use of Carbon Financing to Promote Green Growth in Asia and the Pacific TA 8654: Supporting the Use of Carbon Financing from New Carbon Market Mechanisms to Promote Green Growth in Asia and the Pacific TA 9062: Supporting Low-Carbon Development in Asia and the Pacific through Carbon Markets APCF $151.8 million Trust Fund Commenced in 2007 Fund Participants include Seven European Governments Supported 71 CDM projects in 9 DMCs Contracted 15.63 million CERs Provided carbon finance support to 1.9 GW renewable energy projects All contracted CERs received and distributed to Fund Participants Fund closed in 2014 FCF $115 million Trust Fund Commenced in 2009 Fund Participants include Four Governments and two private sector entities from Europe and Asia Supporting 37 CDM projects in 12 DMCs Contracted 10.5 million CERs as of March 2016 Providing carbon finance support to 1.2 GW renewable energy projects Disbursed more than $32 million Fund will close in 2021 Result Based Finance

Turning Cash Flow into Financing Carbon Market Program Turning Cash Flow into Financing

Participants - Future Carbon Fund

Future Carbon Fund Establishment: Status: Commenced operations in 2009 Funding commitments of $115 million Fund Participants: Government of Finland, Swedish Energy Agency, Participatie Maatschappij Vlaanderen NV (PMV) for Flemish Region of Belgium, Republic of Korea, POSCO and Eneco Energy Trade Status: Portfolio of 37 CDM projects as of 31 August 2016 Contracted to purchase more than 10 million CERs Well-diversified project portfolio including 1.2 GW of Renewable Energy Capacity projects Projects located in 12 countries in Asia and the Pacific, including 4 Least Developed Countries and 2 Small Island Developing States

Unique Features

FCF Portfolio By Project Types (CER Volume) By Country (CER Volume)

Result based Finance - FCF

Case Study

Kinoya Sewerage Treatment Plant GHG Emission Reduction Project, Fiji (UNFCCC Ref. # 4552)

Arial view of the Project Project Location Site Location Kinoya, Suva City, Viti Levu, Fiji Arial view of the Project Biogas Digester and Flare System

Project Description The Project involves the augmentation and rehabilitation of the Kinoya Sewerage Treatment Plant (KSTP) located close to the capital city Suva, on Viti Levu Island. The Project aims to recover methane generated by the anaerobic decomposition of organic matter in the sludge of an existing sewerage treatment plant. The Project treats appx. 472 cubic meters per day of wet sludge. It introduces methane recovery and flaring system to the existing and new anaerobic sludge treatment units (anaerobic digesters). The Project is a first-of-its-kind methane recovery and flaring activity in Fiji. The Project is developed by the Water Authority of Fiji under the Ministry of Infrastructure and Transport, Govt. of Fiji.

Project Objective The Project develops and expands water supply and sewerage treatment systems in Suva urban areas of Fiji. The Project contributed in human and economic development in Fiji through the development of water supply and sewerage services in the Suva urban areas. It improved living standards in the Suva area, particularly for the urban poor. Being the first methane capture and combustion project in Fiji, it sets an example as a clean technology demonstration model for existing and new wastewater treatment plants in the country. The Project was registered with the UNFCCC on 03 May 2011 and expected to generate over 22,000 CERs annually. The Project avoids venting of methane into the atmosphere resulting in environment protection in the region and reducing global GHG emissions The Project contributed to the country’s sustainable development goals in terms of improving the local environment and hygiene by eliminating obnoxious odors and air pollution, thereby improving the living and working conditions for the local communities The Project has contributed in reduction of water borne diseases leading to reduced costs due to less expenditure on health The refurbishment of sewage is a good news for fisher folk and families that forage for their dinners in the waters off Suva. None of their family members has fallen sick from eating seafood The Project has improved access to sustainable water supply and sewerage services in Suva urban areas of Fiji

Project Impacts The Project avoids venting of methane into the atmosphere resulting in environment protection in the region and reducing global GHG emissions. The Project contributed to improve local environment and hygiene by eliminating obnoxious odors and air pollution, thereby improving the living and working conditions for the local communities. The Project has contributed in reduction of water borne diseases leading to reduced costs due to less expenditure on health. The Project has improved access to sustainable water supply and sewerage services in Suva urban areas of Fiji. The Project avoids venting of methane into the atmosphere resulting in environment protection in the region and reducing global GHG emissions The Project contributed to the country’s sustainable development goals in terms of improving the local environment and hygiene by eliminating obnoxious odors and air pollution, thereby improving the living and working conditions for the local communities The Project has contributed in reduction of water borne diseases leading to reduced costs due to less expenditure on health The refurbishment of sewage is a good news for fisher folk and families that forage for their dinners in the waters off Suva. None of their family members has fallen sick from eating seafood The Project has improved access to sustainable water supply and sewerage services in Suva urban areas of Fiji

ADB’s Support for the Project ADB provided funding for the development of the project through a financing Facility FCF has purchased approximately 160,000 Post-2012 CERs to be generated from the Project to be delivered between 2013 and 2020 ADB’s Technical Support Facility has provided CDM related technical assistance to the Project including preparation of PDD, facilitating validation, registering with UNFCCC and post-registration monitoring of CDM Project ADB is providing ongoing capacity development support to manage the CDM project The Project avoids venting of methane into the atmosphere resulting in environment protection in the region and reducing global GHG emissions The Project contributed to the country’s sustainable development goals in terms of improving the local environment and hygiene by eliminating obnoxious odors and air pollution, thereby improving the living and working conditions for the local communities The Project has contributed in reduction of water borne diseases leading to reduced costs due to less expenditure on health The refurbishment of sewage is a good news for fisher folk and families that forage for their dinners in the waters off Suva. None of their family members has fallen sick from eating seafood The Project has improved access to sustainable water supply and sewerage services in Suva urban areas of Fiji

Results Based Finance – Lessons Learned GHG emission reduction activities require financial incentivisation Carbon finance an effective stream to achieve sustainable development Project developers highly value assurance on the quantum & timing of carbon finance Carbon finance needs to be complemented with capacity development support Key to success - strong support of Fund Participants and engagement with project developers

Asian Development Bank Thank you V.K. Duggal Senior Climate Change Specialist Fund Manager - Future Carbon Fund Sustainable Development and Climate Change Department Asian Development Bank Tel (632) 632-5937 vkduggal@adb.org 20