Annual Progress Report The World Bank April 2007

A $13m program with an additional leverage of $8m Implemented capacity building activities in 45 countries, with 17 new countries added during Hosted highly successful Carbon Expo, and regional forums in Asia, Africa and North Africa Over 5200 people benefited from CF-A’s training programs and other events 10 DNAs received structured assistance to strengthen their capacities Several country portfolios developed with over 150 projects assisted Active role in the ‘Nairobi Framework’ Established a participatory implementation structure with WB regions, CFU and external partners Highlights of

Carbon Finance Unit Regional Operations DonorsClients World Bank Institute Development Partners Regional/Country Partners Host Country Committee Management Structure

Work Components CF-Assist Capacity Enhancement Market Development Outreach  Training  Portfolio Development  Institutional Strengthening  Carbon Expo  GHG Forums  Financial Sector Intermediation  Annual Market Assessment  Lessons Learnt

Thematic Focus Governance Industry/Finance Engagement Project Deal Flow Knowledge Management

Approach and Impact Phase I (1 year)Phase II (1 year)Phase III (2-3 years) Theme 1 : CDM/JI Governance DNA/Focal Point w/criteria and procedures established Supportive regulatory framework developed Efficient procedures for project review and approval established Proactive development and marketing of national portfolio DNA established sustainable financing plan Theme 2: Financial/Industry Engagement Key financial experts trained Financial industry understands ‘Rules of the Game’ and instruments to hedge risks CF integrated into commercial investments and in concessional lending planning/decisions

Theme 3: Project Deal Flow Key players in sector fully aware of CF, and some have established systems to assess potential project At least one PDD completed Stakeholders have identified and quantified assets in key sectors. At least one industry association/intermediary is engaged in CF Projects continue to be identified autonomously At least one PDD validated and ERPA negotiated Participation at Carbon Expo At least 2 projects annually with ERs Sustaining deal flow Intermediaries engaged in CF on sustainable basis Ongoing Carbon Expo participation with partial or no subsidy Theme 4: Knowledge Management CDM/JI information, approval procedures, and project opportunities widely disseminated Key local experts trained to design and market projects with/to international experts At least one national workshop covering all CF topics in depth Knowledge sustained by web or long-distance learning National and regional networks established Local and regional experts transferring knowledge to other countries/regions Durable mechanisms for KM (e.g. certification, accredited DOE, etc.). Approach and Impact

National/Regional Programs Bangladesh, India, Nepal, Pakistan, Sri Lanka. Argentina, Bolivia, Brazil, Ecuador, Mexico, Paraguay, Peru, Uruguay, Central America region Botswana, Burkina Faso, Kenya, Madagascar, Mali, Mozambique, Rwanda, Senegal, South Africa, Uganda, West African Region, Southern African Region Cambodia, China, Indonesia, Papua New Guinea, Philippines. Albania, Armenia, Azerbaijan, Belarus, Georgia, Macedonia, Kyrgyzstan, Uzbekistan. GIS Studies: Bulgaria, Latvia, Russian Federation, Ukraine. Egypt, Lebanon, Morocco, Tunisia

Latin America Innovative CF Instruments  Argentine Carbon Facility  Mexico Carbon Fund  Brazil Auction Platform New country programs launched in Paraguay and Ecuador New target countries: Central America, Columbia

Middle East and North Africa Focusing on project development in Morocco, Tunisia and Egypt Programs initiated in Lebanon and Yemen Algeria and Jordan new prospects Successful Regional Forum held in Morocco

Sub-Saharan Africa Most countries in preliminary phase of capacity development New countries launched under Africa Assist: Botswana, Burkina Faso, Kenya,Rwanda Regional programs in southern and western Africa Sectoral assessments in cement and biofuels Successful CF event at COP/MOP2 CF Investment Forum for Bankers in May ‘07

Europe and Central Asia In JI countries, focus is on helping set up the regulatory framework, and GIS In CDM countries, emphasis on strengthening local institutions and project development New target countries are Croatia, Moldova and Kazakhstan

South Asia Comprehensive country program implemented in Sri Lanka  National CDM strategy  DNA strengthening  20 PINs and 5 PDDs developed Focus in India is on unlocking potential in public sector PHRD grant for CB in Pakistan with emphasis on Power sector

East Asia Decentralization of institutional structure and promotion of CDM Fund in China Project portfolio development in Philippines and Indonesia Institutional strengthening in Cambodia Target new countries are Mongolia and Vietnam

Carbon Expo participants from 92 countries 185 Exhibitors from 50 countries 150 journalists 29 non-Annex I host country representatives Over 100 project transactions

Regional Events Regional Carbon Forum for North Africa  April 4-5, Rabat, Morocco  86 Participants (40 buyers) and15 Exhibitors Africa CF Forum  November 13-14, Nairobi, Kenya  440 participants; 30 exhibitors Carbon Expo Asia  October 26-27, Beijing, China  1062 participants; 107 exhibitors

Sector Assessment Transportation  Potential assessment  Methodology development Cement industry in Africa  Barrier analysis  Estimation of potential  Assistance to project development  Identification of capacity needs Biofuels in Africa  Barrier analysis  Estimation of potential  Identification of capacity needs

Knowledge Management Annual State of the Carbon Market Verification, Validation and Monitoring Manual Outreach  Dedicated Website (  Pamphlets for CF-Assist and Africa Assist  Host Country Committee

Nairobi Framework Announced at COP/MOP2 for capacity building with initial focus on Africa Partners: UNFCCC, UNDP, UNEP, AfDB and WB CF-Assist, with CDCF, represents WB Carrying out CDM assessment in Africa Dialog with African host countries on 4 May Feedback to be presented on 14 May at SB

CF-Assist Partners PartnerCountry/RegionProgram/Event Center Mario MolinaMexicoExecuting Agency for CF-Assist IETAGlobalCarbon Expo KoelnmesseGlobalCarbon Expo CEFEBAFRCF Training Programs in Africa AFDAFR / MNAAfrica Assist UNDPGlobalUNDP Project Development Facility UNEP-RISOe CenterAfricaCF-SEA and CD4CDM Argentine Secretary of Environment ArgentinaArgentine Carbon Facility METAPMNAMETAP CF Initiative Regional Energy Association El Salvador, Guatemala and Nicaragua Central America program OLADELACLA Carbon Forum

Achievements in Expo 37% GHG Forum 30% Training 33% 1673 People 5295 People

Achievements Special products designed  Argentina, Brazil, Mexico DNAs strengthened  Albania, Bolivia, Cambodia, China, Kenya, Kyrgyzstan, Macedonia, Mali, Mozambique, Sri Lanka, Uganda, Uruguay, Uzbekistan Project portfolios developed  150 projects in different stages of development in Albania, Cameroon, China, Ghana, India, Kyrgyzstan, Mali, Macedonia, Madagascar, Mozambique, Senegal, Sri Lanka, Tunisia, Uzbekistan and Zambia

Key Lessons from Need for targeted capacity building in short term Importance of accelerated procedures for project approvals Focus on underlying finance for CF projects Differentiated emphasis in capacity building for short term and long term requirements

Work Program ProgramOngoingNew ImplementationProposals Sub-Saharan Africa Botswana, Madagascar, Mali, Mozambique, Senegal, Uganda Burkina Faso, Kenya, Rwanda, Southern Africa, Western Africa. Benin, The Gambia, Niger, Nigeria Middle East and North Africa Egypt, Morocco, TunisiaLebanonAlgeria, Jordan, Yemen South AsiaIndia, Pakistan, Sri LankaNepal East Asia and Pacific Cambodia, China, Indonesia, Philippines Papua New GuineaMongolia, Vietnam, Pacific Islands Latin America and Caribbean Argentina, Bolivia, Brazil, Mexico, Peru, Uruguay Central America, Ecuador, Paraguay Columbia, Central America Europe and Central Asia Azerbaijan, Georgia, Uzbekistan Russian FederationCroatia, Kazakhstan, Moldova

Work Program ProgramOngoingNew Implementation Proposals Global Program Transportation Study Market Facilitation Carbon Expo 2008; Nairobi Framework Latin America Carbon Forum North America Carbon Forum; Asia Carbon Expo Knowledge Management and Outreach State of Carbon Report E-Training Tools and Modules

Spain 6 Switzerland France 2.04 Australia DCF 0.15 Denmark French MEDD 0.18 PCF Plus 0.8 CF-A Resources ($13.4m)

Overall Allocation ( ) National 52% Global 8% Expo 19% HCC 4% Management 14% Miscellaneous 3%

Regional Distribution

Budget ($4m) AFR 17% ECA 4% EAP 12% LAC 24% MNA 6% SAR 3% Global 10% Expo 11% HCC 2% Management 9% Misc 2%

Priorities and Next Steps Increase Coverage and Depth Ensure geographical equity Strengthen Public and Private Institutions Future role of Expo and regional events? Accelerate Pipeline Development for Sectoral focus (Energy - EE, IGCC, HHE; LULUCF) Programmatic approaches Project-focus for CB Vision beyond Kyoto Post-2012 regime discussions Linking development with mitigation Clean Energy Investment Framework Adaptation???