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Workshop on Financing Modalities of Clean Development Mechanism (CDM)

This event aims to identify the financial risks for implementing CDM projects.

It was organized by the Institute for Global Environmental Strategy (IGES), UNEP RISŲ Centre on Energy, Climate, and Sustainable Development (URC), United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and Japan Bank for International Cooperation (JBIC), Japan

Mr. Toru Kubo, CDM Specialist, presented ADB's CDM operations. [ PDF: 177kb | 24 pages ]

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The CDM was established by Article 12 of the Kyoto Protocol. Through the CDM, an industrialized country invests in projects in a developing country and obtains credits for achieved emission reductions called Certified Emission Reductions (CERs). The CDM is intended to provide specific benefits for developing countries, including transfer of clean technology, foreign direct investment and an income from the sale of tradable CERs, while attracting the investments from the private sector in developed countries in return to the generated CERs. The CDM also assists industrialized countries in achieving cost-effective compliance with their quantified emission limitations and reduction commitments under Kyoto Protocol's Article 3.

Getting the CDM into gear will require financial resources. The financial sector can play an important role in this respect, and, in particular, provide project financing, lending and insurance for CDM projects. However, the current involvement of private financial institutions in CDM projects remains low. This seems because the financing the CDM projects is more difficult than financing conventional projects due to several sort of unique barriers for CDM.

Therefore, the work shop aims to explore the financial feasibility of CDM project from a view of financial institution's behaviour and consider the possible solution to reduce such barriers. In addition, it is also necessary to identify policy options which are taken by Host countries and Annex-I countries for project developers and financial institutions to implement the CDM projects.

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• To identify the risk and the issues on financial appraisals when the CDM project will be implemented
• To consider the way how such risks and issues are mitigated
• To find out the policy solution to solve them to project developers and the government of host countries

For more information about this workshop, visit http://www.iges.or.jp/en/cdm/index.html*

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• Commercial Bankers (Foreign & Domestic banks)
• Multilateral financial institutions (ADB) and Bilateral Donor (JBIC)
• Project developers (Local developers or consultants)
• Government officials (Indonesia, The Philippines, Vietnam, Cambodia, India)
• KADIN (Indonesian Chamber of commerce) member companies

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