REACH

TA 4496-IND: Capacity Building for the Clean Development Mechanism in India

Objectives:

The TA's goal is to reduce GHGs efficiently by implementing CDM projects. The TA's purpose is to provide broad-based capacity-building support to various stakeholders in specific CDM sectors and selected areas to strengthen India's overall position as one of the key players in the evolving international carbon market. The TA will follow a "learning-by-doing" approach: alongside the training activities, real CDM projects will be developed to demonstrate best practices and guidelines. The TA is divided into two components.

1. Component 1. This will focus on governmental and regulatory entities (NCDMA and stakeholders at state, urban local body, municipality, and rural levels) and project developers and promoters. Four regional workshops will be conducted in India. The capacity-building approach will include the development of projects, such as landfill methane gas capture; waste to energy; and small-scale activities such as rural decentralized energy supply projects, industry clusters, rural energy plantations, etc. The best-practice CDM projects developed under this TA will address risks and costs of institutionalizing various elements of the CDM cycle (additionality, baselines, monitoring and verification modalities, sustainable development objectives, etc.).



2. Component 2. This will help mainstream CDM into the domestic financial and insurance sector. The CDM project appraisal and risk-management toolkit from this TA will help mainstream carbon finance and associated revenue streams into project finance appraisals. Four regional training workshops in India will help build capacity of selected financial institutions (commercial banks, nonbanking financial institutions, rural cooperative banks, etc.) and insurance companies in the area of CDM. One international seminar on carbon markets and financing will be organized. The feasibility of a dedicated fund for CDM projects will be assessed, and its conceptual framework, organizational structure, business plan, and operational guidelines designed.

1. staff of NCDMA and other relevant central-level stakeholders, and urban local bodies (and municipalities) in selected states, and project developers and promoters trained to assess and evaluate CDM projects using GHG-reducing technologies such as landfill gas capture, waste to energy, etc.;



2. two best-practice CDM methodologies and PDDs prepared for these sectors;



3. an action plan and strategy document developed to replicate CDM projects in municipalities and urban local bodies;



4. two best-practice CDM methodologies and PDDs prepared, and associated project bundling mechanisms and financial structuring options formulated (in close cooperation with suitable banks) for selected small-scale CDM sectors such as rural (decentralized) energy supply, small-industry clusters, etc.;



5. an operational toolkit and handbook prepared for small-scale CDM projects;



6. a CDM project appraisal and risk-management toolkit developed for the domestic financial and insurance sector;



7. staff of selected institutions from the financial and insurance sectors trained in appraisal, risk management, and structuring of CDM projects; and



8. the feasibility of a dedicated fund for CDM projects assessed and the fund design developed.

Status:

• Contract negotiations with selected consultant were held on 10-11 August 2005. Consultant’s contract was signed on 22 August 2005 and notice to proceed with the services was issued on 25 August 2005.
• TA Implementation commenced on 01 September 2005.