1. Green Investment Scheme in Bulgaria Christo Christov, Energy Institute, Bulgaria Workshop Facilitation Green Investment Scheme: first lessons learnt and the way forward April 24-25, 2008, Budapest, Hungary

2. 2 Opportunities for Bulgaria Surplus of AAUs Potential for Bulgaria to trade AAUs: Approximately 30 mill t CO 2 e / year Potential for Greening AAUs in Bulgaria could be 75 million tons of CO2e Emission Reductions for 5 years period

3. 3 Potential of Bulgaria to realize ER District heating & cogeneration – 50 mill t CO 2 Energy efficiency – 11 mill t Renewable energy – 7 mill t CO 2 Waste management – 3 mill t CO 2 Fuel switch – 3 mill t CO 2 Forestry – 2 mill t CO 2 Total – about 75 mill t CO 2

4. 4 Benefits for Bulgaria Additional financing sources – compliance with commitments and real projects Additional flexibility compared to JI projects Avoidance of EU ETS Double accounting of the Emission Reductions Achievement of emission reductions in the most efficient manner

5. 5 WB Study for Bulgaria on GIS, 2004 confirmed the feasibility of a GIS recommended various options for establishing and implementing a GIS received favorably across the various sectors and Ministries - seminars, comments recommended a multi-sectoral investment program under the GIS

6. 6 In early 2005 the BG Government was committed to moving forward with a GIS as quickly as possible The Government promised: to take all necessary measures to implement GIS to work with multilaterals, bilateral agencies, private sector and local stakeholders in this regard to design the GIS to use flexible financial instruments to provide support for eligible projects – soft, hard, JI

7. 7 AAU-based Green Investment Scheme understanding in Bulgaria (2004 -2005) Long term financing facility which links transfer of AAUs through 2012 with emission mitigation activities and projects through and beyond 2012 Selling country to assure buyers that proceeds from sale of AAUs would be used to finance agreed Green Investment Scheme (GIS) and adopt suitable monitoring and verification measures Buying country(ies) to provide financing for GIS per the terms of contract

8. 8 Bulgaria GIS Study, 2004 - Findings Bulgaria is well positioned to establish a GIS GIS can be implemented without requiring new law(s) Establishment of a GIS can proceed without delay Central heating, waste management, energy efficiency, have potential for producing emission reductions of 50-60m tones between 2005-2020 Forestry can also produce large benefits Bulgaria can offer an attractive GIS (with an initial consideration for sale of AAUs around 25 million tons in first tranche) See full report at www.moew.government.bg www.moew.government.bg

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11. 11 GIS Considerations for Bulgaria 2005 GIS structure should cover all management costs without depending on government budgetary resources GIS should be flexible to ensure financing of public/private sector projects and PPP initiatives using market friendly instruments GIS should be flexible to accommodate bilateral and multilateral negotiations and preferences in implementation

12. 12 GIS Recommendations, 2005 Bulgaria is the most attractive JI Country and is the pioneer in formulating a GIS backed AAUs (Point Carbon) Establishment of a GIS with an initial size of euro 250 to 350 million is feasible Existing ECO Trust Fund with good track record is an attractive option to set-up and manage GIS Additional “Fund Management” support to ECO Trust Fund through experienced commercial banks which can raise new financing and also provide own financing Establishment of an AAU Management Function which coordinates all activities involving AAUs

13. 13 Proposal of WB Group for Assistance Facilitating discussions and negotiations between the government & buyer(s) Assist with the establishment and launching of a complete GIS framework that meets buyer(s) requirements and Bulgaria’s needs Financial assistance to GIS in the form of loans and/or guarantees Technical Advisory services for GIS Capacity building for Art.17 eligibility

14. 14 Closing The Compliance Gap EU countries, Canada and Japan have expressed interest in AAUs only as long as the investments are linked to emission reduction activities (“Greening AAUs”) The requirement for Greening of AAUs would reduce the amount of AAUs that can be offered substantially - by as much as 50% or more

15. 15 Bulgaria 2005 - 2008 Nothing was done for establishment of GIS WHY? The current Government considers AAUs trading applicable without greening GIS would just limit the freedom of the Government to utilize the proceeds from AAUs sale for other than emission reduction purposes AAUs banking for the next (2013 – 2020) period is considered as well.

16. 16 THAK YOU FOR THE ATTENTION !!!