Carbon Finance Opportunities at The World Bank
Carbon Finance Opportunities at The World Bank
Kirtan C Sahoo The World Bank
Structure • Carbon Market Overview • Carbon Finance Business at World Bank • Different carbon finance products at World Bank • Typical Carbon Finance Projects (Bank pipeline)
Size of Carbon Market (cumulative 2008-2012 volumes in tons CO2 equivalent) • Estimates suggest that OECD cumulative target reductions will be 5-5.5 billion tons of carbon dioxide based on their Kyoto obligations • If we assume half are achieved from domestic measures within the OECD this would leave a “ compliance gap” of about 2.5 billion tons • The main sources of emissions reductions to fill this gap are: – Energy/Infrastructure based CDM projects: ~300 million tons by end 2012; – HFC23/N2O based CDM projects: ~1 billion tons by end 2012 – but for most buyers will need “ greening” – Greened Assigned Amount Units (AAUs, or “ Hot Air” ) – upto 1.5 billion tons needed – but this capacity is uncertain and urgently needs a commercial scale test.
Outline
Preferred CDM Destination – Rating by Point Carbon 1. India 2. Chile 3. Brazil 4. Peru 5. China 6. Morocco 7. Mexico 8. Vietnam 9. Thailand 10. South Africa 11. Indonesia
Carbon Finance Business @ World bank • Part of the larger global effort to combat climate change • To reduce poverty and improve living standards in the developing world • The mission is to catalyze a global carbon market through the purchase of high quality emission reductions in climate-friendly projects in developing countries and economies in transition • CF business started with the launch of Prototype Carbon Fund in early 2000 • Followed by launching of several other carbon funds
How the Carbon Funds Work $
Industrialized Governments and Companies
$
Finance
Bank Managed Carbon Fund
Finance
Developing Countries and Communities
CO2 Equivalent
CO2 Equivalent
Emission Reductions
Emission Reductions
P ayment on delivery of emissions reductions, not up-front capital costs
$ 290 million of Wr itten Commitment to the Wor ld Bank fr om the Danish Gover nment and the Spanish Gover nment. Spanish and Danish Car bon Funds will be oper ational by mid-December 2004. Total commitments to date is $760M
Opportunities with World Bank • Total commitments to date is $760M • Has identified projects (active pipeline) for about $500 million • Looking for projects worth at least $250 million more in the next 1-2 years • ERPAs signed (that is money legally committed in contracts) totals just about $150 million which means a long way to sign ERPAs for more than $600 million. Bank is actively looking for projects which are consistent with the World Bank policies and procedures.
More Info at .. www.carbonfinance.org Thank You
Kirtan C Sahoo The World Bank
Structure • Carbon Market Overview • Carbon Finance Business at World Bank • Different carbon finance products at World Bank • Typical Carbon Finance Projects (Bank pipeline)
Size of Carbon Market (cumulative 2008-2012 volumes in tons CO2 equivalent) • Estimates suggest that OECD cumulative target reductions will be 5-5.5 billion tons of carbon dioxide based on their Kyoto obligations • If we assume half are achieved from domestic measures within the OECD this would leave a “ compliance gap” of about 2.5 billion tons • The main sources of emissions reductions to fill this gap are: – Energy/Infrastructure based CDM projects: ~300 million tons by end 2012; – HFC23/N2O based CDM projects: ~1 billion tons by end 2012 – but for most buyers will need “ greening” – Greened Assigned Amount Units (AAUs, or “ Hot Air” ) – upto 1.5 billion tons needed – but this capacity is uncertain and urgently needs a commercial scale test.
Outline
Preferred CDM Destination – Rating by Point Carbon 1. India 2. Chile 3. Brazil 4. Peru 5. China 6. Morocco 7. Mexico 8. Vietnam 9. Thailand 10. South Africa 11. Indonesia
Carbon Finance Business @ World bank • Part of the larger global effort to combat climate change • To reduce poverty and improve living standards in the developing world • The mission is to catalyze a global carbon market through the purchase of high quality emission reductions in climate-friendly projects in developing countries and economies in transition • CF business started with the launch of Prototype Carbon Fund in early 2000 • Followed by launching of several other carbon funds
How the Carbon Funds Work $
Industrialized Governments and Companies
$
Finance
Bank Managed Carbon Fund
Finance
Developing Countries and Communities
CO2 Equivalent
CO2 Equivalent
Emission Reductions
Emission Reductions
P ayment on delivery of emissions reductions, not up-front capital costs
$ 290 million of Wr itten Commitment to the Wor ld Bank fr om the Danish Gover nment and the Spanish Gover nment. Spanish and Danish Car bon Funds will be oper ational by mid-December 2004. Total commitments to date is $760M
Opportunities with World Bank • Total commitments to date is $760M • Has identified projects (active pipeline) for about $500 million • Looking for projects worth at least $250 million more in the next 1-2 years • ERPAs signed (that is money legally committed in contracts) totals just about $150 million which means a long way to sign ERPAs for more than $600 million. Bank is actively looking for projects which are consistent with the World Bank policies and procedures.
More Info at .. www.carbonfinance.org Thank You
