Carbon Finance at EBRD: IGOs’ perspectives Technical workshop on Joint Implementation Bonn, 9/10 March 2006

EBRD’s role in the Carbon Market project financing based on Carbon Credit sales develop market mobilise donor funds for project preparation: e.g. CDM project preparation facility in Central Asia and Caucasus policy dialog with Governments (if necessary) intermediary purchasing carbon credits for the account of buyers Netherlands Carbon Fund (2003) aim on Bulgaria, Romania, Ukraine and Russia Multilateral Carbon Credit Fund (“MCCF”): 2006 jointly with EIB public and private window

EBRD pipeline: potential for JI Bulgaria: 6 projects 4.3 million tonne CO2e Romania 7 projects 4.4 million tonne CO2e Large potential for Energy Efficiency Energy Audits Program Ukraine 6 projects 5.3 million tonne CO2e Russia (co-operation with NEFCO and IFC) 7 million tonne CO2e Potential for many more

Market and prices Price determined by supply and demand CER prices: Higher prices: more projects CER prices: € 4 start 2005 € 9 end of 2005 Potential, but JI market is restricted by: ETS, EU directives Approval procedure (Russia and Ukraine) Lack of rules and guidelines (JISC) As a result: Limited competition and lower prices

What would improve JI market quick preparation of project: at least 6 months certainty project preparation: EUR 80 - 120,000 (PDD, Validation, legal DD); additionality only known at end of project preparation; CDM guidelines: Barrier approach simplified and standardised procedure; country Carbon Emission Factor (Bulgaria: NEK CEF); sector baselines

Small Scale Potential, but difficult Example: Project portfolio 6 projects: 2 hydro, 1 biomass, 2 CHP in industry, 1 efficiency improvement (400,000 EURs) Different stage of development Start preparation start 2004 Cost for preparation PDD under validation Hope to contract in April CDM EB approved SCC procedure is not simplified