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 05.02.2019

Introduction to the Austrian JI/CDM Programme Experience 2007 Outlook 2008 Summary and Closing 05.02.2019

Introduction to the Austrian JI/CDM Programme 05.02.2019

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 05.02.2019

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 9,8 Mio. 35 CDM 22,0 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 (2008-2012): 45 Mio. t CO2e Individual JI/CDM Projects Carbon Facilities/Funds GIS 05.02.2019

Regional distribution of Project Pipeline 161 projects as of 1 January 2008 05.02.2019

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, ... 05.02.2019

Experience 2007 05.02.2019

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) 05.02.2019

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 05.02.2019

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 05.02.2019

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 05.02.2019

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 05.02.2019

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) 05.02.2019

Outlook 2008 05.02.2019

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 05.02.2019

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) 05.02.2019

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 05.02.2019

Summary & Closing 05.02.2019

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! 05.02.2019

Austrian JI/CDM Programme www.ji-cdm-austria.at 05.02.2019