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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
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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
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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
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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
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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
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& 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.)
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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%)
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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
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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%)
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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
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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
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