Does project reduce, prevent or mitigate the release of 1 or more of the Kyoto gases [See appendix 3]? Does the project remove CO2 or other GHGs from the atmosphere? Are reductions based on nuclear power, decrease in production or force majeure [1]? Does project contravene or work against other international, regional or national treaties [2]? Have project activities already started [3]? Is loan finance used in any of the parts listed in [5]? Are any grants included in the project financing for tasks other than those listed in [7] Are any loans provided by International Finance Institutions [6]? Are loans concessional and/or underwritten by ODA? Does grant include ODA or IFI loan underpinned by ODA? NO YES Is Official Development Aid (ODA) used in implementation of the project [5]? START YES NO YES NO YES NO Project not relevant Project not eligible Project unlikely to be approved Project unlikely to be eligible – see note [4]. Project not eligible for some buyers & unattractive to MDG Carbon Are reductions based on avoided deforestation? YES NO A A D D D D D  go to sequestration page X Screen 1: General eligibility for CDM Does the donor provide clear documentation that they do not have, and will not make any claim to the emission reductions? NO B Usage of this finance (& all project financing) will require very clear & careful analysis & tracking to ensure it is not used in contravention of the Kyoto Protocol or the donor’s documented intent. YES Continue screening B2.2 (WCD) B6.1 B3.2 Case Study: Okilu Hydro Project China

Is project in an Annex I country (see Appendix 2 for list of countries)? Is the project in an Annex II country (see Appendix 2 for list of country)? YES NO Project not eligible for CDM in this country START Has the host country ratified the Kyoto Protocol [See Appendix 2 for list of countries]? Project is not eligible for CDM but may be eligible for JI Does host country have an operating DNA [1]; [See Appendix 2]? YES Unlikely CDM project will be successful in this country NO Is ratification planned to be completed by 1/1/2008? NO YES Unlikely project will be approved soon enough to be viable NO Is a DNA in the process of being established now? NO YES Will DNA be functional for approval before 1/1/2008? NO YES Does the DNA currently operate effectively [2]? YES DNA high risk of being impediment to project development NO Is the DNA likely to be able to operate effectively by 1/1/2008 [2]? NO YES Need to work with host government to build DNA capacity Will the project likely satisfy the stated host country sustainable development policies and/or is host government actively supportive of project type? YES NO Is project type likely to be accepted/incorporated into host governments sustainable development policies? Project will not achieve DNA approval NO Need to work to make project attractive to host government’s SD policies UNKNOWN YES Consult with host government on sustainable development policies B BA C C C D D D C Screen 2: Host country eligibility and approval of projects for CDM D B1.2 D1.1 ? (yes) A2.1 & D1.2

Is the project required by federal, state or municipal legislation or regulation? Can it be clearly demonstrated that non-compliance with these laws is widespread? YES NO Not eligible START Are there relevant national or regional sectoral policies that give comparative advantage to higher emitting technologies (E+) [1]? NO Were these policies implemented after 11 December 1997? YES Is overcoming this policy an important part of showing additionality? YES Unlikely to be additional NO Baseline establishment and additionality cannot include these policies Are there relevant national or regional sectoral policies that give comparative advantage to lower emitting technologies (E-) [2]? Were these policies implemented after 11 November 2001? YES Is excluding this policy an important part of showing additionality? NOYES Unlikely to be additional NO Is the project the least cost option [3]? Are there other barriers to project implementation [4]? YESNO Unlikely to be eligible NO YES Is the project common practice in the country? YES Can project conservatively and transparently demonstrate barriers? NO OR UNKNOWN Unlikely to be eligible YES Is project common practice in the region? YES Not eligible Are there particular circumstances for this project that can clearly show why this project is different to local conditions? NO Significant risk this project will be rejected unless particulars of the project are clearly unique YES Can project clearly demonstrate differences between national and local conditions, and that the project is not common practice locally? NO Can project clearly show this? Need to demonstrate that the project is not common practice NO YES NO YES B BAA D D D D C C C - B NO B Baseline establishment and additionality cannot exclude these policies Screen 3: Additionality B2.2 & C1.1 ? Policy to promote coal? C1.1 ?? ? ? Y or N?

Has the project identified relevant sources of emissions in the project [1]? Identification of sources is required before assessment of project viability can be made START Costs of monitoring will need to be carefully examined & strictly controlled B A Has the project determined a credible baseline scenario (ie an objectively reasonable description of what would happen in the absence of the project)? Has the project identified relevant sources of emissions in the baseline [1]? Has the project identified an Approved Methodology that is applicable? (see Appendix 4) Does the project have relevant historical, market &/or sectoral data required for the baseline? Can emissions be monitored and verified using data generated from measurements of project fundamentals [3]? B YES NO Identification of a baseline scenario is required before assessment of project viability can be made B NO B Is an applicable methodology confidently expected to be approved before 1 June 2007? C Is the required baseline data easily and cheaply attainable [2] ? NO C B YES Are monitoring devices specifically for emissions available cheaply “off-the-shelf” in the host country [3]? Can project &/or location specific monitoring devices be developed and implemented at reasonable cost and time [4]? C NO YES NO YES Screen 4: Baselines Identification of baseline sources is required before assessment of project viability can be made Any further delay in methodology approval will seriously threaten project viability Project should attain this data before committing extensive resources Reliable data can be difficult to attain, and this may prove a significant obstacle to baseline approval Costs of monitoring may be higher than income created. YES NO Assumed zero B4.2 (offset grid – in AM0002) B5.1? B4.2 B5.1 Y – MWh delivered to grid

Has the project selected a particular site/region for implementation? Not possible to assess project viability without further site specific information START A B YES NO Screen 5: Ownership & Stakeholder engagement Is project a generic, national approach/strategy that does not apply to a particular site [1]? NO Does project have reliable up to date information from recent feasibility studies? YES This will be necessary to determine implementation times and stakeholder engagements B NO Has initial stakeholder consultation been undertaken? Stakeholder support is essential for registration YES NO Does project have reliable information from local sources to indicate stakeholders views on the project [2]? NO Are stakeholders supportive of the project? Project will not be eligible without stakeholder support YES NO Can stakeholder concerns be reasonably addressed with changes to project and/or other measures? NO YES C - B CD - Adjust or redesign project to address concerns B YES Are there comparable projects that set a precedent for resolving competing ownership claims for the project? Are there, or could there be, competing ownership claims? Are there comparable projects that set a precedent of ownership for the project? Has the project identified & documented ownership of emission reductions? Have potential claimants (including governments) waived ownership claims? B B C Ensure the precedent is applicable & confirm undisputed ownership of ERs Competing ownership claims can quickly ruin a project. This should be addressed before any significant investment. Project should confirm ownership using precedent as soon as possible. Ownership can be an intractable issue & should be addressed before any significant project investment C YES NO YES B1.4 B6.1 A2.1? A2.1 & A2.3 B6.1 A2.2

Can project be implemented by 1/1/2008 [1]? Project only likely to be viable with functional voluntary market and/or post-2012 policy certainty START A YES NO Screen 6: Implementation time and emission reductions Can project be implemented by 1/1/2009? NO YES Can project be implemented by 1/1/2010? NO CD - YES Are average project emission reductions > 25 ktCO2e/year? D Any time delay or delivery failure likely to result in project failure unless post 2012 or voluntary market established Project only likely to be viable with functional voluntary market and/or post-2012 policy certainty C NO YES Are average project emission reductions tCO2e/year? D Any time delay or delivery failure likely to result in project failure unless post 2012 or voluntary market established Project only likely to be viable with functional voluntary market and/or post-2012 policy certainty C Are average project emission reductions > 25 ktCO2e/year? YES NO B Any time delay may imperil project viability YES Are average project emission reductions > 25 ktCO2e/year? Are average project emission reductions 5-25 ktCO2e/year? Are average project emission reductions 1 – 5 ktCO2e/year? D Not viable NO BC Delivery failure may imperil project viability Any time delay or delivery failure likely to result in project failure unless post 2012 or voluntary market established YES ?B6.1? ‘about in 2008’ B5.1