1. Japan’s Financial Schemes for Promoting CDM Projects
- Landfill Gas Utilization and the Clean Development Workshop-
6 September 2005
Bali Hilton International
Nusa Dua, Bali
Presented by
Ms. Yamada Fumiko
Expert Staff
New Energy and Industrial Technology Development Organization (NEDO)
Jakarta Office

2. Contents 1. Japan Kyoto Mechanisms Acceleration Programme (JKAP):
A Facilitator for CDM Project Development
2. Feasibility Studies
3. Upfront Payment
* Cont. by Mr. Matsushita’s presentation

3. Japan Kyoto Mechanisms Acceleration Programme (JKAP)
Objective: Facilitating cooperative CDM/JI projects between Japan and host countries.
MOFA, METI, MOE
JETRO Business Matching Support
GEC/NEDO
CDM/JI Project F/S
JBIC SAPROF PDD Assistance, etc.
JCF Development of CDM/JI Procurement of Credits
MOE/NEDO Uprfront Payment Programme for CDM/JI Projects
NEXI Export Insurance
JBIC Financing

4. Feasibility Studies Project Development Assistance
Organization: NEDO & GEC
Requirement:
Any International consortium must include a Japanese partner to be eligible
Financial assistance for a Feasibility Study (F/S) covers:
PDD development and Study Implementation Cost
up to JPY25M
Budget：
JFY 2004:
1.7 Billion yen (US$16M)
JFY 2005:
1.8 Billion yen (US$17M)
JAPAN
Financial assistance for F/S costs
Project
Developers
Incl.
Japanese
partner
Potential
Project
In host country

5. Up to 50 % up-front payment
Financial assistance for project development with up-front payment covers either one of the following:
Program Administrators: METI, NEDO, MOE
Requirements:
A portion of credits generated from emission reduction project that is proportional to the amount of the financial assistance should be transferred to Japan.
Any international consortium must include a Japanese partner to be eligible.
Type A: Preliminary costs (PDD development, validation and registration costs, etc.)
Type B: Project expenses (equipment costs, etc.)
Type C: Post project review costs (monitoring, verification and certification costs, etc.)
JAPANESE
GOV.
Budget for FY 2005:
Billion yen
(US$54-76M)
CER
Up to 50 % up-front payment
of total project cost
CDM EB
Credit price:
Certification
Report
Fair price to be determined on a project-by-project basis according to project risk, delivery risk, market price trends, etc.
Project
Developer
Incl.
Japanese
partner
CER
CDM/JI project
in host country

6. & Upfront Payment (Supplementary Explanation)
Feasibility Studies
& Upfront Payment (Supplementary Explanation)
Project Type:
Energy Efficiency, Renewable Energy, GHG Reduction, incl. Methane Capture and Utilization, HFC decomposition, N2O reduction, etc. (Sink projects are excluded.)
Acceptance of Applications in 2005:
Feasibility Studies: (1) May (Closed) (2) September
Upfront Payment: (1) April-May (Closed) (2) July-August
(3) November (4) TBA
(Additional program details are available upon request.)

7. Scenario I: Energy Efficiency Project
Upfront Payment-
Scenario I: Energy Efficiency Project
　　　・ Equipment and construction costs ＝ US$30M
　　　　→Maximum amount of upfront payment: US$30M×50% ＝ US$15M
　　　・ERs = 0.4 Mt-CO2/Year
　・Starting year of the crediting period: 2007
　　　・Estimate of credits for the 1st commitment period:
0.4 Mt-CO2×6 years＝2.4 Mt-CO2
If an applicant requests the maximum upfront payment (50%):
① If credit price ＝US$4／t-CO2
→ Available “Upfront payment” = US$4×2.4 Mt-CO2 = US$9.6M (32%)
② If credit price ＝US$７／t-CO2
→ Available “Upfront payment” = US$7×2.14 Mt-CO2 ＝US$15M (50%)

8. Manufacturing and installation completed
Upfront Payment-
Energy Efficiency Project (cont.)
Order Equipment
Manufacturing and installation completed
SCENARIO 1-②:
2005　　　 2006　　 ～2012
The 1st commitment period
Design and partial
manufacturing of equipment
US$10M
Manufacturing and installation of equipment
US$20M
Issuance of credits
　　　　　　　　Applicants
Upfront payments: 　US$5M
US$10M
Japanese Government

9. Scenario II: Decomposition of N2O Project
Upfront Payment-
Scenario II: Decomposition of N2O Project
　　　・ Equipment and construction costs ＝ US$12M
　　　　→ Maximum amount of upfront payment: US$12M×50% ＝ US$6M
　　　・ERs 1.5 Mt-CO2/Year
　　　・Starting year of the crediting period: 2007
　　　・Estimate of credits for the 1st commitment period:
1.5Mt-CO2×6 years ＝ 9 Mt-CO2
If an applicant requests the maximum upfront payment (50%):
① If credit price ＝US$4／t-CO2
　　→Available “Upfront payment” = US$4×1.5 Mt-CO2 ＝ US$6M (50%)
② If credit price ＝US$7／t-CO2
　　→ Available “Upfront payment” = US$7×0.86Mt-CO2 ＝ US$6M (50%)

10. Manufacturing and installation completed
Upfront Payment:
Decomposition of N2O Project (cont.)
Order Equipment
Manufacturing and installation completed
SCENARIO 2-②:
2005　　　 2006　　 ～2012
Design and partial
manufacturing of equipment
US$6M
The 1st commitment period
Manufacturing and installation of equipment
US$6M
Issuance of credits
　　　　　　　Applicants
Upfront payments: US$3M
US$3M
Japanese Government

11. Thank you http://www.kyomecha.org/e/index.html
Comments and inquiries should be forwarded to:
in Energy & Environment Policy Department, NEDO Japan or
in NEDO Jakarta