1. Baltic Sea Region Testing Ground Facility
May 2004

2. TGF established in December 2003
Initial subscribed capital € 10 million
Governments of Denmark, Finland, Iceland, Norway and Sweden as founding investors. Discussions ongoing with Germany.The intention is to also invite private investors
Fund management services provided by NEFCO

3. PURPOSE OF TGF
To facilitate & finance a number of concrete pilot projects and acquire cost effective carbon credits for the benefit of the Investors
To develop the JI mechanism, in particular seeking to clarify rules and methodological issues in the context of concrete projects
To implement the testing ground

4. PHASE I
GOVERNMENTS
PHASE II
ENTERPRISES
INVESTORS’ COMMITTEE
NEFCO
TGF
PROJECTS

5. MODALITIES
The TGF operates as a “purchase fund”, acquiring ERUs and, if possible, AAUs
Payments against delivery. Possible up-front payments to be decided case-by-case
Technical assistance can be financed only case-by- case

6. Incremental investment
TGF
Incremental investment
Loans
Non-incremental
investment
Investor funds
Sponsor’s equity
Co-financing with other sources, including NEFCO (which fund the “baseline” investments)

7. Potential host countries for the time being: Russia, Estonia, Latvia, Lithuania, Poland. The intention is to identify projects in all host countries
Track 2 procedure (until Track 1 may become possible)
A call for projects to be issued in 2004, but projects are also identified continuously

8. Supplier of equipment and services Buyer of AAUs / ERUs
THE ROLE/S OF THE PRIVATE SECTOR
Project owner/sponsor
Investor in TGF
Supplier of equipment and services
Buyer of AAUs / ERUs