1 Project Development Work in Progress Uganda Team

2 Activities in Task 5 Seminar for project developers Seminar for project developers The characteristics : Energy, Forestry, Waste management ( Private sector) The characteristics : Energy, Forestry, Waste management ( Private sector) We prepared documents for the Carbon trade fair We prepared documents for the Carbon trade fair Documents were used during training Documents were used during training Went through the PCN,PIN,PDD Went through the PCN,PIN,PDD

3 Mt Elgon Hydro Power Company (Page 1) The size of power: Renewable energy project with an installed capacity of 7. 5 MW. The size of power: Renewable energy project with an installed capacity of 7. 5 MW. There will be 110 kV transmission line to the consumers. There will be 110 kV transmission line to the consumers. The project will also include reforestation of the area along the river bank to reduce silting at the dam The project will also include reforestation of the area along the river bank to reduce silting at the dam

4 Mt Elgon Hydro Power Company (page-2) Estimated tonnage: 40,000 per annum Estimated tonnage: 40,000 per annum Up to a period 10 years 355,000 t CO2 -equivalent Up to a period 10 years 355,000 t CO2 -equivalent Baseline Scenario: Displacing diesel in transport, commercial and domestic sector for power generation and paraffin for household needs. Baseline Scenario: Displacing diesel in transport, commercial and domestic sector for power generation and paraffin for household needs. Development cost: US$ 1.7 million Development cost: US$ 1.7 million Installed cost US$ 13.2 million Installed cost US$ 13.2 million Other costs US$ 1.1 million Other costs US$ 1.1 million Total cost US$ 16 Total cost US$ 16 The estimated cost from carbon contribution about < 3%! The estimated cost from carbon contribution about < 3%! There is a need for smart subsidy ? Under ERT Program There is a need for smart subsidy ? Under ERT Program Will the a forestation contribute to the carbon financing ? Will the a forestation contribute to the carbon financing ?

5 Kakira Cogeneration (Page 1) The present installed capacity for power generation is 4.5 MW. It is planned to add a MW turbo- alternator, The present installed capacity for power generation is 4.5 MW. It is planned to add a MW turbo- alternator, supply 6 MW peak power to the grid and subsequently 12MW, supply 6 MW peak power to the grid and subsequently 12MW, Utilizing the excess bagasse which is disposed off by open-field burning. Utilizing the excess bagasse which is disposed off by open-field burning. The project is suitable for Clean Development Mechanism because it uses the bagasse to replace diesel generators. The project is suitable for Clean Development Mechanism because it uses the bagasse to replace diesel generators.

6 Kakira Cogeneration (Page 2) The project is estimated to supply 10,980,000 kWh per annum to the grid 6 MW peak period). This would displace diesel-generated electricity, The project is estimated to supply 10,980,000 kWh per annum to the grid 6 MW peak period). This would displace diesel-generated electricity, The project period is 14 years; thus about There is a potential of increasing to 12MW The project period is 14 years; thus about There is a potential of increasing to 12MW Negotiations with the government PPA power to be supplied at peak period Negotiations with the government PPA power to be supplied at peak period Sources from carbon financing 87,840 tonnes for ten years. Sources from carbon financing 87,840 tonnes for ten years.

7 Kakira Cogeneration (Page 3) Total project cost estimate: Total project cost estimate: Development cost US$ 14.0 million (minimum 6 MW grid supply) Development cost US$ 14.0 million (minimum 6 MW grid supply) Incremental project cost US$ 2.5 million (for 12 MW grid supply) Incremental project cost US$ 2.5 million (for 12 MW grid supply) Sources of finance Sources of finance Equity : US$ 2.1 Equity : US$ 2.1 Debt : US$ 8.6 ( EADB Financed) Debt : US$ 8.6 ( EADB Financed) GEF grant : US$ 3.3 (confirmed under the World Bank ERT Project – 26 % !! ) GEF grant : US$ 3.3 (confirmed under the World Bank ERT Project – 26 % !! ) Carbon finance contribution sought : 6 hr – peak - 2% ! Carbon finance contribution sought : 6 hr – peak - 2% ! Expand the Power Purchase Agreement to18 hr 6% ! Expand the Power Purchase Agreement to18 hr 6% !

8 Electricity Demand Supply ( )

9 Suggestions to Resolve the Problems Develop a case study by modifying the data and make appropriate assumptions. Develop a case study by modifying the data and make appropriate assumptions. To arise the level of confidence of Project Developers (PD) that will not be misused To arise the level of confidence of Project Developers (PD) that will not be misused Training the financial analysist, consultants ( the one was involved in the feasibility study) for the PD Training the financial analysist, consultants ( the one was involved in the feasibility study) for the PD Explain to the project developers that the Financing Institutions will use the CDM funds as leverage. Explain to the project developers that the Financing Institutions will use the CDM funds as leverage. They have to know that the PDD will be a public document, but the financial details will not revealed. They have to know that the PDD will be a public document, but the financial details will not revealed. CDM can make projects more attractive ? Hustle ! CDM can make projects more attractive ? Hustle !

10 Constraints and suggestions Constrains Suggestions Financial constraints - Limited funds from CDM Financial constraints - Limited funds from CDM Limited data (finance) - Make conservative estimates Limited data (finance) - Make conservative estimates Integration of carbon financing - Make conservative estimate Integration of carbon financing - Make conservative estimate - Train the consultants for the PD - Train the consultants for the PD No details on baseline - Use the small scale topology No details on baseline - Use the small scale topology methodology check the methodology methodology check the methodology WB is pushing harder Provides - Can CD4CDM inject in funds-for WB is pushing harder Provides - Can CD4CDM inject in funds-for 25% up front feasibility study? 25% up front feasibility study? - Inform PD that WB is one of buyers - Inform PD that WB is one of buyers WB is wining PD confidence - Sensitisation WB is wining PD confidence - Sensitisation Low Carbon market - Special rates for SS Project Low Carbon market - Special rates for SS Project Competition from GEF - Reduce hustles and transaction cost Competition from GEF - Reduce hustles and transaction cost