www.german-energy-solutions.de/en

Bereich für Bild

Landfill gas projects in Brazil:

Financial solutions

• Feasibility of landfill projects in Brazil

• Financing (On-Balance)

• Financing (Off-Balance)

210/09/2019

Table of contents

310/09/2019

What determines the financial feasibility of landfill gas projects?

Main income streams:

• Gate fee

• Government support

• Electricity sales

• Certificates (e.g. CDM, RECs,

CBIO)

Expenditures:

• Fees, taxes and customs

• Site preparation

• Gas collection and treatment

• Power generation

410/09/2019

How does traditional financing with certificates work?

Investor

Validation and

Verification

Greenhousegas reduction

Rehabilitation

Carbon Credits

ERUs or CERs

510/09/2019

Example cogeneration landfill gas in Nanjing / China

Nanjing

Installed power output : 2.528 kW el.

Reduction:

CO2 reduction potential : 0,463 t/MWh

1,15 t CO2 /h

9.363,7 t CO2 /a*

Additionally CH4 potential for CH4 not going

in the atmosphere approx. 30. 000t/MW/a

GWP of CH4 21 times higher than CO2

100.000t/a multiplied with the CO2 price/t

610/09/2019

What are other financing options?

Solutions

• Over the counter business of CDM certificates still gives reasonable income

• Institutions and private companies looking for certificates

• Other certificate-based financing (RECs, CBIO, CDM Gold Standard)

• Government supported financing and equity (KfW-DEG, BNDES)

• Climate Bonds

• Crowdfunding

• Leasing/Contracting

• Traditional financing options like

- Private equity

- Senior debt

- Export credit

710/09/2019

What are Climate Bonds?

• Climate Bonds were created to fund projects that have positive environmental

and/or climate benefits.

• For the creation of the bonds, the projects are checked by an independent

validator and certified.

• The Climate Bonds were invented only a few years ago and enjoy a steady

growth in the market.

810/09/2019

How can Climate Bonds be created?

• Become partner at standardisation entity

• Establish documentation to achieve bonds

• Hire validator to check documentation

• Get certified

• Hire bank or other entity to distribute bonds

• Achieve proceeds

• Hire verifyer to check if standard measures were kept

910/09/2019

Which criteria have to be fulfilled?

• Technical criteria

• Project must proof to be sustainable by measurable parameters

• Financial criteria

• Total transparency and accountability of the funds

• Sector criteria (for each sector different)

• Guidelines must be met (e.g. environmental and construction)

1010/09/2019

What are the main cost factors?

• Partnership standardisation entity - 0,0065%-

• Certification fee (for €100 Million) - 0,001%

• Validator services approx. - 0,01%

• Verifying service approx. - 0,01%

• Bank fees (for €100 Million) - 0,25%

(to be evaluated)

• Interest of the bond - 3%

• Compensation consultant - 1%

Total 4-5%

1110/09/2019

What are the advantages of climate bonds?

• No investor as equity provider in the company

(therefore no sales of shares necessary)

• Once bond is paid back 100% no other obligations

• Obligations are well known in advance

(fixed interest, fixed payback time)

• Flexibility

(bond conditions can be adjusted to the project)

• Off-balance possible

1210/09/2019

What are the risks of Climate Bonds?

• Project doesn‘t meet criteria of Certification body

• Bonds cannot be distributed

• Project fails

A group of high-qualified and experienced

implementing partners will eliminate those risks

1310/09/2019

What are financing optimisation possibilities?

• Purchase your own bonds on secondary market

• Sell bonds a second time if necessary

1410/09/2019

Ficaríamos contentes por uma cooperação!!!

Ulrich Sawetzki

Tel.: +491739067730

www.powerlinkinvest.com

Obrigado pela atenção!!!!