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					A Carbon Financing Guide
     for South Africa
              Geoff Stiles
            Project Manager


               Presented to
            Carbon Emissions:
      a Financial Markets Perspective
             8 February 2005

         Developing greenhouse gas mitigation
         projects for Southern African industries
           Topics Covered….
   About CBLA…
   State of carbon financing in SA
   Informational and capacity needs
   The Carbon Financing Guide




                Developing greenhouse gas mitigation
                projects for Southern African industries
                   About CBLA….
   Capacity Building, Leadership & Action
   Focus on GHG mitigation opportunities in industry
   Objectives
       To help build capacity to mitigate industrial greenhouse
        gas emissions through energy efficiency
       To help establish voluntary initiatives or mechanisms for
        GHG mitigation through industry associations
       To identify, develop, and facilitate implementation of
        specific GHG mitigation projects
   Operates in South Africa and Mozambique
   Funded by CIDA (CCCDF)
   Implemented by Marbek Resource Consultants &
    AMEC

                        Developing greenhouse gas mitigation
                        projects for Southern African industries
              Industry Projects
   Working with 6 industry groups:
       Sectoral associations: chemicals, mining,
        textiles
       Sectoral direct: food/beverage
       Geographic associations: Durban, Mozambique
   Process:
       Screening audits (33 completed)
       Feasibility studies (4 completed, 5 in progress)
       Facilitation of project implementation (incl.
        CDM design and financing)
       Monitoring

                     Developing greenhouse gas mitigation
                     projects for Southern African industries
         CBLA Information and
       Capacity-Building Activities

   Energy Auditor training programme
    (w/DME)
   E.E. Charter development (w/DME & NBI)
   Intro Climate Change course (w/MEETI)
   CDM Project Development course
    (w/UNIDO)
   Web-based Project Clearinghouse (CBLA)
   Carbon Financing Guide (CBLA)

                Developing greenhouse gas mitigation
                projects for Southern African industries
        Current State of Carbon
       Financing in South Africa

   Significant price increases in CDM
    market
   Maturation of international markets
   Increasingly a seller’s market
   Huge technology transfer & low-cost
    financing opportunities
   Knowledge base available already
   Approval process transparent
               Developing greenhouse gas mitigation
               projects for Southern African industries
 Kyoto’s GHG Market Is Evolving
                                                          European Union:
        Canada:
                                   Japan:              Ratified Kyoto Protocol;
Ratified Kyoto Protocol;                               EU Compliance Starts
                           Ratified Kyoto Protocol;                                   United Kingdom:
 Trading system under                                          Jan 2005
                           Largest Volume Buyer
development; Provincial                                                              500 trades under UK
                             in Carbon Market
  GHG requirements                                                                    Emissions Trading
      implemented                                                                    Scheme involving 1.6
                                                                                         to 1.7 million
                                                                                          allowances
Sweden and Norway :
Issued tenders for CDM                                                                  Netherlands:
    and JI projects                                                                 Purchased 25.2 million
                                                                                   GHG reductions for $138
                                                                                    million from ERUPT and
                                                                                   CERUPT; 1 more ERUPT
      Austria:                                                                       issued; Transactions
Plans to issue tender                                                               outside tender process
worth 36 million EUR                                                                         executed
                                                              Denmark:
   for CDM and JI
       projects                  Finland:               GHG cap in power sector,       New Zealand:
                                                         2001-2003; Purchased
                           Tender for small-scale        ERUs from Romania in       2nd Round of Project
                            CDM project issued;            March 2003, Further     Mechanism Announced
                                     Developing             gas mitigation
                             Expected to yield greenhousePurchases Planned            by Government
                                      Mt CO for
                             500,000projects 2e Southern African industries
Implications for South African
     Project Developers
   Buyers of carbon getting more sophisticated
       Lowering risk is as crucial as finding optimal price
   Buyers looking for larger projects over longer
    periods of time
   Implications for project developers:
       Sellers need to understand buyers’ needs
       Project design becomes crucial (e.g. bundling of small
        projects, choice of proven technologies, achieving host
        country approvals)
       Evidence of project financing and solid balance sheet
   Bottom line:           1. Think RISK
                           2. Learn more about sellers
                       Developing greenhouse gas mitigation
                       projects for Southern African industries
    CDM Advantage: South Africa
   Favored supply: Currently under represented in all major
    public sector and private sector portfolios
      Location diversity is stressed to mitigate risk
   High carbon intensity of SA grid rewards action on electrical
    as well as thermal opportunities
   Will be focus of much needed capacity building funding
      CBLA/CIDA, CF Assist, UNF, WBCSD, DANIDA
   English the main language of business – no translation of
    PDD etc.
   Financial infrastructure in place
   DNA now in place
   Africa’s strong sustainable development factors

                        Developing greenhouse gas mitigation
                        projects for Southern African industries
    Information and Capacity Needs:
              South Africa
   Industry understanding of CDM extremely variable
   Most larger SA companies instituting programmes to
    identify CDM opportunities:
       SASOL
       ESKOM
       SAB
       BHP-Billiton
       SAPPI
   Need for capacity to undertake:
       Feasibility assessments
       PDD development
       Marketing of projects to potential buyers/brokers
       Forum for financing people involved in CDM


                         Developing greenhouse gas mitigation
                         projects for Southern African industries
        The Carbon Financing Guide:
            Purpose and Scope
   To provide South African financial/other
    managers with a practical, simplified guide
    to carbon financing.
   To provide insight into topics such as:
       Understanding carbon markets
       Understanding various carbon pricing scenarios
       Accessing various sources of carbon finance
       Placing carbon assets on your balance sheet



                     Developing greenhouse gas mitigation
                     projects for Southern African industries
              Target Users
   Financial managers of
     Private corporations (industry,
      buildings)
     Municipalities and other government

   Chief executives wishing to
    familiarise themselves with the
    opportunities for carbon financing
   Project developers

                Developing greenhouse gas mitigation
                projects for Southern African industries
             Topical Coverage

1.   CEO briefing: 2 pages front-end
        Strategies for Climate Change
        Adapting to the Impacts
        Understanding Response Measures
        Capitalising Your Carbon Assets
2.   Management Toolkit
        Adaptation and Response
        Mitigation Opportunities
        Selling Carbon Credits
        The Clean Development Mechanism in South
         Africa
3.   List of links and further reading
                   Developing greenhouse gas mitigation
                   projects for Southern African industries
             Launch Details
   Guide in draft stage
   Official launch: late February
   Launch on website: same time
   Publication: March
   Availability:
     On the web (PDF files)
     In print format through CBLA etc.

     By email request

                 Developing greenhouse gas mitigation
                 projects for Southern African industries
   Contact Details

       CBLA Project
         PO Box 898
    Parklands RSA 2121
   Phone: 011-447-7879
    Fax: 011-447-7885
  Email: geoff@cbla.org.za
www.ghgclearinghouse.org.za



      Questions?

       Developing greenhouse gas mitigation
       projects for Southern African industries

				
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