1. The Climate Investment Partnership A Public-Private Approach to Financing Renewables The Climate Investment Partnership Frank Joshua, CEO “Renewable Energy on the Market” Sonderborg, Denmark, 18 September 2003

2. Contents The partnership strategy and objectives 1 Business development plan 2 CIP’s core activities CIP’s contribution to JREC’s objectives 4 3 I 2

3. 1 The partnership strategy and objectives The Climate Investment Partnership

4. I 4 What is The Climate Investment Partnership?  The CIP is a Geneva-based not for profit association of public and private financial organizations that seeks to provide upfront financing for projects that promote renewable energy and reduce greenhouse gas (GHG) emissions.  The CIP’s main purpose is to act as an “investment clearinghouse” for GHG emission reduction and renewable energy projects, combining financial resources and specialised expertise from both public and private financial organizations to enable projects to proceed.  The CIP will work with project developers, project suppliers, investors, and specialised service providers to identify, screen, process and finance suitable projects.

5. I 5 What is the CIP’s Project Finance Mechanism?  The CIP’s Project Finance Mechanism consists of: (a)A Project Finance Facility (PFF); (b)An Investment Committee within the PFF; (c)A Database of suitable GHG and renewable energy projects; (d)An On-line system for registration and management of projects; (e)A network of “Project Suppliers”; (f)A network of specialised GHG service providers; and (g)GHG project selection criteria.

6. I 6 What is the CIP’s Project Finance Facility?  The PFF is designed to: Facilitate the bringing together of investment resources (including in the form of equity, loans and other debt instruments or securities, grants, credit or other guarantees and indemnities, delivery insurance, specialised technical expertise and services) with suitable projects; Enable project developers to obtain upfront financial and technical resources for suitable projects; and Enable investors who are PFF Participants to pursue investments in suitable projects.  PFF Participants will benefit from: (I) access to high-quality projects; (ii) substantially reduced search and processing cost; (iii) access to high-quality financial services and carbon market expertise, and (iv) faster project implementation.

7. I 7 CIP’s Project Finance Facility Project 2 Project Finance Facility (PFF) PFF Manager (Swiss Re) Project 1Project nProject 3 Financial Support Emission reductions credits Equity Investors Loan & Grant Providers Delivery Insurance Providers Credit Guarantee Providers

8. I 8 CIP’s Project Selection Criteria  Commercially attractive projects  Substantial GHG reduction potential  High likelihood for projects to qualify under a major GHG regulatory regime (e.g. Kyoto, EU ETS)  Partially funded projects (30% minimum)  Technology focus: renewable energy (biomass, hydro, wind, geothermal, solar, etc.); methane capture; fuel-switching; and energy efficiency  Substantial non-GHG benefits.

9. 2 Business development plan The Climate Investment Partnership

10. I 10 Business Development Plan C.I.P Project Developers Strategic Partner (service provider) L. American Project Agents African Project Agents CEE Project Agents Russian Project Agents Asian Project Agents Lawyers, verifiers, technical specialists, finance houses, venture capital, etc. Projects Project Flows sourced by C.I.P Agents.Success fees passed to Partners in DCs & EITs Project pays for services received GHG Project Finance Facility C.I.P contracts with PFF - funds are channelled directly from Investors to Project Developers Investors pay management fee to C.I.P. C.I.P refers service providers to Project Developers

11. I 11 Climate Investment Partnership (CIP) Core Processes Information Technology Investors Project Finance Facility (PFF) Project Developer Docs & Reports VerifierConsultantsLawyers Services paid for by project developer to bring the carbon to a marketable standard Equity Loans Guarantees Insurance Investment Committee Funds are channeled directly from Investors to Project Developers HTML form CIP refers service providers to Project Developers Financial returns and VERs, ERUs etc are channeled back to PFF and/or Investors CIP pay a % of management fee or ERU to sales person Project Developer can register direct with CIP or Project Developer can register via an a ccredited CIP sales person Project Development Financial Structuring Project screening & Capacity building Project report sent to Invs Mgr PFF Manager (Swiss Re) Approved documents sent to PFF Investors pay management fee to CIP Resource Management Marketing Management & Administration Business development plan Organisational Scheme

12. I 12 Stakeholders (1) Climate Investment Partnership Finance providers Project providers Development finance institutions Insurance and re- insurance companies Banks and Investment funds Companies (and Associations) Renewable promoters Construction, engineering and consulting companies Heavy Industry NGOs Public and quasi- public Institutions Export credit agencies and warranty providers Investment Banks Equipment manufacturers and suppliers

13. I 13 Stakeholders (2) Original Vienna Group Members Swiss Re EBRD Development Bank of Japan (DBJ) Austria Wirtschaftsservice (AWS) FINNFUND European Commission Natsource Ernst & Young Fenwick Elliott Some other Key CIP “Partners” Swiss State Secretariat for Economic Affairs (SECO) World Economic Forum Standard Bank INNOGY/RWE Deloitte & Touche Environmental Investment Partners (EIP) Factor Consulting

14. 3 CIP’s core activities The Climate Investment Partnership

15. I 15 CIP’s Core Activities 1.Structured Finance for Emission Reductions Projects 2.Project Management 3.Project Sourcing and Screening 4.On-line System for Project Registration & Documents Management 5.Partnership Networking 6.Regulatory Support for GHG Projects 7.Training and Capacity Building.

16. 4 CIP’s contribution to JREC’s objectives The Climate Investment Partnership

17. I 17 How can the CIP contribute to the objectives of JREC?  The CIP is in a unique position to contribute to the JREC objectives agreed at Brussels in June: Firstly, the CIP is a market driven mechanism that focuses on grasping the new opportunities for sustainable development offered by regulatory regimes that generate a market value for environmental benefits (e.g. CDM & JI credits and renewable energy certificates); Secondly, the CIP provides an international framework for project developers and investors (public and private) to work together to facilitate investments in renewables; Thirdly, the CIP establishes a comprehensive infrastructure to enable upfront financing for suitable projects, including the availability of equity and grants where appropriate; and Fourthly, one combined effect of the above actions should be to encourage all countries, but especially host countries, to establish adequate targets for renewables within appropriate regulatory frameworks.

18. The Climate Investment Partnership Contact Details: Frank Joshua Chief Executive Officer, CIP 6 Place des Eaux-Vives 1207 Geneva, Switzerland. Tel. +41 78 77 24 183; Fax. +41 22 776 5078 Email: frank.joshua@bluewin.ch