cdm cpa validation report · 03 2012-07-16 fernando rangel villasana trainee auditor revisions and...

Validation Report

Germanischer Lloyd Certification GmbH • Brooktorkai 18 • 20457 Hamburg • Germany Handelsregister Hamburg, Abt. B., Nr. 52078

CDM CPA VALIDATION REPORT

ALBA RIVAS, WIND POWER PLANT – TEPEU POA

CPA # 1

GLC Report No: 228-CPA1, Version: 16

Validation Report GLC Report No. 228-CPA1, Rev. 16

Germanischer Lloyd Certification Code: DC-GHG 015_A, Rev.00 Date: 2012-02-24; MN, Cyf, Junw

Attention: This form is controlled electronically and shall only be printed out for using as a record

Organisational Unit

Germanischer Lloyd Certification GmbH (GLC), Greenhouse Gas Services

Name of Client Client reference person

Mabanaft Carbon B.V. Patricia Rosenthal

Summary:

PoA-DD Title: Tepeu Wind Programme of Activities

Generic CPA-DD Title: [name] Wind Power Plant – Tepeu PoA CPA #[number]

Specific CPA-DD Title: Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1

CPA Host Country(ies): Nicaragua

CPA Implementer(s): Alba de Nicaragua S.A.

CPA Number: 1

GPS coordinates of CPA:

The project area is defined by the following set of coordinates:

Latitude Longitude 1 11.395403 - 85.799375 2 11.395350 - 85.795589 3 11.386644 - 85.785106 4 11.380894 - 85.784781 5 11.374681 - 85.786447 6 11.365814 - 85.787733 7 11.358875 - 85.795761 8 11.362328 - 85.804031 9 11.371522 - 85.812797 10 11.378469 - 85.795844

Sectoral Scope, Technical Area(s):

CDM Sectoral Scope 1, Technical Area 1.2

Methodology(ies) / Version(s): ACM0002 version 12.3.0: Consolidated baseline methodology for grid-connected electricity generation from renewable sources

CPA Project Size (Scale): Large Scale Small Scale | Micro Scale

ER Estimation of CPA: 751,626 t CO2eq total 107,375 t CO2eq per year

Start of PoA Crediting Period: 2012-12-20 (or the date of registration, whichever is later)




PoA Duration: 28 Years

Start of CPA Crediting Period: 2013-03-31 (the expected date of commissioning or the date of inclusion, whichever is later)

CPA Crediting Period: Fixed (10 years) Renewable (7years)

GSC Start of the PoA: 2011-12-28

CPA Start Date: 2012-02-17

Positive Validation Opinion:

Negative

Project Assessement Team: Technical Review Team: Final Approval:

Fernando Rangel Villasana José Emilio Moreno

Karunakar Avuram Jun Wang

Markus Weber

Date of this revision: Revision No. Number of pages

2013-03-21 16 93

Mode of Distribution:

No distribution without permission from the client or responsible organisational unit

Limited distribution Unrestricted distribution




History of report revisions: Rev. Date Person (short sign or

name) Function Action

01 2012-07-02 Fernando Rangel Villasana José Emilio Moreno

Trainee Auditor ATL

Draft Report

02 2012-07-06 Karunakar Avuram Trainee reviewer Review with comments 03 2012-07-16 Fernando Rangel Villasana Trainee Auditor Revisions and responses to TR

comments 04 2012-07-26 Jun Wang Final Reviewer Review with comments 05 2012-08-10 Fernando Rangel Villasana Trainee Auditor Revisions and responses to TR

comments 06 2012-08-20 Jun Wang Final Reviewer Review with comments 07 2012-08-22 Karunakar Avuram Trainee reviewer Review and closing of addressed

comments 08 2012-08-28 Fernando Rangel Villasana Trainee Auditor Revisions and responses to TR

comments 09 2012-09-04 Jun Wang Reviewer 10 2012-09-06 Fernando Rangel Villasana Trainee Auditor Revisions and responses to TR

comments 11 2012-09-11 Jun Wang Final Reviewer Final Review 12 2012-09-12 Markus Weber Approver Reviewed and approved 13 2012-11-27 Fernando Rangel Villasana

José Emilio Moreno Trainee Auditor ATL

Revisions in response to notification of incompleteness

14 2012-11-27 Jun Wang Markus Weber

Final reviewer Approver

Final Review and approved

15 2013-03-19 Fernando Rangel Villasana José Emilio Moreno

Trainee Auditor ATL

Revisions in response to request for review

16 2013-03-21 Jun Wang Markus Weber

Final reviewer Approver

Final Review and approved




Abbreviations ACM Approved Consolidated Methodology ALBANISA Alba de Nicaragua S.A. AM Approved Methodology CAR Corrective Action Request CDM Clean Development Mechanism CDM-EB CDM Executive Board (the board) CER Certified Emission Reduction CL/CR Clarification Request CME Coordinating and Managing Entity CMP Meeting of the Parties to the Kyoto Protocol CONAM Consejo Nacional del Ambiente (National Environmental Council of Peru) CO2 Carbon dioxide CO2eq Carbon dioxide equivalent COES Comité de Operación Económica del Sistema Interconectado Nacional

(Committee for the Interconected Electricity System’s Economic Operation) COP/MOP The Conference of the Parties to the United Nations Framework Convention on

Climate Change serving as the Meeting of the Parties to the Kyoto Protocol CPA Component Project Activity or CDM Programme Activity CPA-DD CPA Design Document DNA Designated National Authority DOE Designated Operation Entity EIA Environmental Impact Assessment EF Emission Factor FAR Forward Action Request GSC Global Stakeholder Consultation GHG Greenhouse gas GLC Germanischer Lloyd Certification GmbH GWP Global Warming Potential INE Instituto Nicaragüense de Electricidad (Nicaraguan Electricity Institute) IPCC Intergovernmental Panel on Climate Change LDC Least Developed Country LoA Letter of Approval MARENA Ministerio del Ambiente y los Recursos Naturales (Ministry of Environmental

and Natural Resources of Nicaragua) MINAM Ministerio del Ambiente (Ministry of Environment of Peru) NGO Non-governmental Organisation NIS Nicaraguan Interconnected System (national power grid of Nicaragua) ODA Official development assistance O&M Operation and maintenance PDD Project Design Document PoA Programme of Activities PoA-DD Programme of Activities Design Document PP Project Participant (s) SEIN Sistema Interconectado Nacional (Interconected Electricity System – national




power grid – of Peru) SSC Small Scale CDM SME Small and Medium size Enterprises UNFCCC United Nations Framework Convention on Climate Change VVM Validation and Verification Manual




Table of Contents Page

1 INTRODUCTION............................................................................................................................. 9

1.1 Objective ................................................................................................................................................... 9

1.2 Scope and Criteria .................................................................................................................................... 9

2 VALIDATION TEAM...................................................................................................................... 10

2.1 Assessment Team .................................................................................................................................. 10

2.2 Technical Review and Final Approval Team ........................................................................................... 10

3 METHODOLOGY.......................................................................................................................... 12

3.1 Desk Review of the CPA-PDD and Supporting Documents.................................................................... 12

3.2 On-Site Assessment and Follow-Up Interviews with Project Stakeholders............................................. 12

3.3 Resolution of Clarification and Corrective Action Requests .................................................................... 13

4 VALIDATION REPORTING........................................................................................................... 16

4.1 Participation in the Project Activity and Parties Approval ........................................................................ 16

4.2 CPA Project Design Document ............................................................................................................... 17

4.3 CPA Project Description and Technology to be Applied ......................................................................... 17

4.4 CPA Compliance against the Eligibility Criteria for Inclusion under the PoA........................................... 19

4.5 The Coordinating and Managing Entity (CME) and PoA Monitoring Plan ............................................... 19

4.6 Baseline and Monitoring Methodology .................................................................................................... 21

4.6.1 Applicability of the Selected Methodology to the Programme of Activity ............................................ 21

4.6.2 CPA Project Boundary........................................................................................................................ 22

4.6.3 Baseline Identification......................................................................................................................... 22

4.6.4 Algorithms and Formulae used to Determine Emission Reductions................................................... 22

4.7 Additionality of the SSC-CPA.................................................................................................................. 24

4.7.1 Prior Consideration of the Clean Development Mechanism............................................................... 24

4.7.2 Identification of Alternatives to the CPA ............................................................................................. 24

4.7.3 Investment Analysis............................................................................................................................ 25

4.7.4 Barrier Analysis .................................................................................................................................. 37

4.7.5 Common Practice Analysis................................................................................................................. 37

4.8 Monitoring Plan of the CPA..................................................................................................................... 37




4.9 Stakeholder Consultations (Local and Global) ........................................................................................ 38

4.10 CPA Crediting Period .............................................................................................................................. 39

4.11 Environmental Impacts Analysis (EIA) .................................................................................................... 39

5 VALIDATION OPINION................................................................................................................. 40

6 REFERENCES.............................................................................................................................. 41

ANNEX A: VALIDATION QUESTIONNAIRE AND RESOLUTION OF CORRECTIVE ACTION AND CLARIFICATION REQUESTS (FINDINGS’S LIST) .............................................................................. 45

ANNEX B: CERTIFICATES OF COMPETENCE ................................................................................... 90




1 INTRODUCTION

Mabanaft Carbon B.V. has commissioned Germanischer Lloyd Certification GmbH (GLC) to perform the validation of the CPA Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1 (hereafter called “the project”) which is to be included at validation under the PoA Tepeu Wind Programme of Activities. This validation report summarizes the findings of the validation of the project, performed on the basis of UNFCCC criteria for the CDM for CPA inclusion under a PoA, as well as criteria given to provide for consistent project operations, monitoring and reporting. UNFCCC criteria refer to Article 12 of the Kyoto Protocol, the CDM modalities and procedures and the subsequent decisions made by COP/MOP and the CDM Executive Board.

1.1 Objective

The purpose of a validation is to have an independent third party assess the project design. In particular, the project's baseline, monitoring plan, and the project’s compliance with relevant UNFCCC and host Party criteria are validated by a Designated Operational Entity (DOE) in order to confirm that the project design as documented in the PoA Project Design Document (PoA-DD), CPA Design Document generic (CPA-DD generic) and CPA-DD real case is sound and reasonable and that it meets the identified criteria. Validation is a requirement for all CDM projects and is seen as necessary to provide assurance to stakeholders of the quality of the project and its intended generation of Certified Emission Reductions (CERs). The executing DOE can only provide a validation opinion but the ultimate decision whether a project is registered or not rests with the CDM Executive Board (CDM-EB).

1.2 Scope and Criteria

The validation scope is defined as an independent and objective review of Project Design Document (PDD) and supporting documentation. The PDD and supporting documentation are reviewed against the criteria stated in Article 12 of the Kyoto Protocol, the CDM modalities and procedures as agreed in the Marrakech Accords and the relevant decisions by the CDM Executive Board, including the Approved Methodologies and / or Approved Consolidated Baseline and Monitoring Methodology (ACM0002 version 12.3.0). The validation was based on the recommendations and guidance of the Validation and Verification Manual, VVM version 1.2/6/. The validation is not meant to provide any consulting towards the project participants. However, stated requests for clarifications, corrective actions and/or forward actions may have provided input for improvement of the project design.




2 VALIDATION TEAM

2.1 Assessment Team

A competent team with relevant knowledge and experience in the specific scopes and sectors was appointed by GLC. The appointment of the team takes into account the required scope, technical area, knowledge of the host country and general project activity knowledge requirements for validating the project design and the relevant CERs that would be achieved by the project activity. The appointment of the audit team also includes a screening of everyone involved against any conflict of interest. The assessment team is composed of an Assessment Team Leader (ATL), Auditors (A) and Host Country or Technology Expert (E). Table 2-1 below shows the composition of the assessment team their qualifications and/or functions.

Table 2-1: Validation team members, qualification and knowledge

Type of involvement

Name (Family Name, First Name)

Function

1)

Sectoral scope spe

cific

know

ledge

Technical area specific

know

ledge

Local kno

wledge

Desk re

view

On-site visit / interview

s

Rep

orting

Supe

rvision of work

Expe

rt input

Villasana, Fernando TA, FE

X X X X X

Moreno, José Emilio ATL, E

X X X X X X X

1) ATL: Assessment Team Leader; A: Auditor; TA: Trainee auditor, E: Expert; FE: Financial Expert

2.2 Technical Review and Final Approval Team

Before submission of the final Validation / Inclusion Report to EB of the UNFCCC, a technical review of the whole validation procedure and the draft report was carried out by GLC appointed Technical Reviewer (TR) team. The appointed TR team is composed of competent GHG auditors for the sectoral scope and technical area under which this project falls. Each involved reviewer is not directly involved in the validation assessment up to the start of the internal technical review phase of this project.




As a result of the internal technical review process, the validation opinion and the topic specific assessments as prepared by the validation’s ATL may be confirmed or revised. Furthermore, reporting improvements might be achieved. Finally, the CPA-PDD, validation / inclusion report and any document to be submitted to the EB have to undergo an internal quality control and completeness check before they are approved to be included under the PoA and uploaded to UNFCCC website. The Technical Review team and the person responsible for approval of the report are found in the table below.

Table 2-2: Technical Review and Approval Team.

Type of Involvement Name

(Family name, given name)

Qualification / Function2)

Technical Area Knowledge

Sectoral Scope

Expertise Review Approval

Avuram, Karunakar TR X Wang, Jun R+FR X X X Weber, Markus FA X X 2) TR: Trainee Reviewer, R: Reviewer, TE: Technical Expert, FR: Final Reviewer, FA: Final Approval.




3 METHODOLOGY

The validation consists of the following three phases: I. Desk review of the PoA-DD, CPA-DD generic, CPA-DD specific case/1/ and other supporting

documents. This includes the preliminary compliance check of the project design against the applicability conditions and with regard to baseline setting and eligible project measures and above all the Eligibility Criteria for the Inclusion of a CPA under the PoA.

II. On-site assessment and follow-up interviews (through email communications, telephone calls, skype, inter alia) with project participants and stakeholders as necessary

III. Resolution of outstanding issues and the issuance of the draft validation report and opinion IV. Technical review of the draft validation report and other supporting documentation in order to

ensure the correctness, completeness and depth of the reporting. V. Finally the report and supporting documentation has to be approved by a competent person

before they are submitted to CDM-EB for request for inclusion under the registered PoA This final validation report summarizes the findings after all phases of the validation process have been completed. The following sections outline each step in a more detailed way.

3.1 Desk Review of the CPA-PDD and Supporting Documents

The initial version of the CPA-PDD generic and CPA-DD specific case in Nicaragua/1/ as well as other supporting background documents related to the project design and baseline submitted by the PP, were initially assessed in the context of a desk-review in order to verify the correctness, credibility and interpretation of the presented information. A further crosscheck of the information provided was done with information from other sources as available. Preliminary findings from the desk review were sent to the PPs together with the audit plan to prepare for the subsequent on-site visit as required.

Desk review is based on the first version of the PoA-DD, CPA-DD generic and CPA-DD specific which were uploaded to launch the Global Stakeholder Consultation (GSC) from 2011-12-28 to 2012-01-26.

A complete list of documentation reviewed during the validation process is presented as Information Reference in section 6.

3.2 On-Site Assessment and Follow-Up Interviews with Project Stakeholders

From 2012-01-30 to 2012-02-03, members of the assessment team as appointed by GLC conducted an on-site audit at the site where the CPA will be implemented. The following site(s) was / were visited: � Local CME offices in Managua, Nicaragua � Local office for the Ministry of Environment and Natural Resources (MARENA) in the Municipality of

Rivas, Nicaragua. � Mayor’s office in the Municipality of Rivas, Nicaragua, � La Fe Farm, in the Municipality of Rivas, Nicaragua, where the first real case CPA will be

implemented; � INE - Instituto Nicaragüense de Electricidad (Nicaraguan Electricity Institute). In the context of such on-site visits, GLC performed visual inspection to the project site, and an assessment of project related documents provided by the project participants. The members of the




validation team also conducted interviews with representatives of project stakeholders in order to confirm selected information and to resolve issues earlier identified during the desk review of documents. The main topics addressed during the interviews includes, inter alia:

� Project design and adopted technology � Demonstration of baseline and additionality � Project implementation timeline and any risk of delay � GHG emission reduction calculations � Application of the monitoring methodology as well as expected design and application of the

monitoring and managing plan � Local Stakeholder Consultation process � Assessment of environmental impacts, environmental licensing and legal compliance of the project

and baseline scenario with applicable regional and national legislation � Monitoring of dispatched energy, record keeping and access to data and publications by INE � Official calibration requirements for electricity meters by INE � Letter(s) of Approval(s) by the respective countries’ DNA The names of those interviewed during the validation process are listed below in Table 3-1.

Table 3-1: Names of interviewed persons – CPA1 in Nicaragua

Name Organization / Position

Julian Gonzalez Rios INE/Economics Specialist Miguel A. Aleman INE/Director of Economic Studies and Tariffs Aura Monjarrez INE/Director of the Wholesale Electricity Market Bismarck Morales Nicaraguan DNA/Technical Assisstant Manuel Madriz Callejas Nicaraguan DNA/Coordinator Esperanza Nuñez Tenorio Municipality of Rivas/Vice-Mayor Pedro Aburto Padilla Municipality of Rivas/Head of Financial Department Jeronimo Ruiz Municipality of Rivas/Head of Treasury Department Mario Rodriguez MARENA/Local Representative for Rivas Isabel Málaga Écoressources (CME)/Project Manager Adolfo Mejía Écoressources (CME)/Local Representative for Nicarágua Modesto Rojas ALBANISA/Supervisor - Renewable Energy Deparment Bismarck Rueda ALBANISA/Environmental Technician

3.3 Resolution of Clarification and Corrective Action Requests

The objective of this phase of the validation was to resolve any outstanding issues which needed to be clarified prior to GLC’s positive conclusion on the project design as described in the Project Design Document (PDD) and supporting documentation. In order to ensure transparency, a validation questionnaire was customised for the project, according to the valid version of the applied methodology (ACM0002 version 12.3.0) /2/ and Validation and Verification Manual (VVM),/6/ version 1.2, as well as PoA related CDM requirements according to EB 55 Annex 38 Procedure for registration of a programme of activities as a single poject activity version 4.1/27/ and PoA Standard/31/ (EB70 Annex5).. This questionnaire shows in transparent manner VVM requirements, source, means and findings of




validation as well as the results from validating the identified criteria. The validation questionnaire serves the following purposes: � It organises, details and clarifies the requirements a CDM project activity is expected to meet; � It ensures a transparent validation process where the validators will document how a particular

requirement has been validated and the result of the validation. The validation questionnaire consists of one table with sub-sections. These sections are related to the different topics which have to be validated and checked with respect to the VVM requirements. The completed validation questionnaire for the Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1 is enclosed in Annex A to this report. The different columns of this questionnaire are explained in Table 3-2. Findings established during the validation can either be seen as a non-fulfilment of criteria of the applicable CDM baseline and monitoring methodology, and/or applicable criteria of the CDM or where a risk to the fulfilment of project objectives is identified. Corrective action requests (CAR) are issued, where: i) the project participants have made mistakes that will influence the ability of the project activity

to achieve real, measurable additional emission reductions; or ii) applicable baseline and monitoring methodology, and/or applicable criteria of the CDM have

not been met; or iii) there is a risk that emission reductions cannot be monitored or calculated or that the project

would not be accepted as CDM project activity A clarification request (CL) may be used provided information is insufficient or not clear enough to determine whether the applicable CDM requirements have been met or where additional information is needed to fully clarify a particular issue. The validation questionnaire consists of individual frames for each Corrective action requests (CAR) and clarification request (CL) raised. The content of each frame is described in the table below. To guarantee the transparency of the validation process, the concerns raised by GLC and the responses provided by the project proponents are fully documented in Annex A of this report. Forward Action Requests (FARs) are issued during validation to highlight issues related to project implementation that require review/assessment during the subsequent verification(s) of the project activity. FARs are not related to the CDM requirements for registration The findings are separately presented in a findings list table which is also attached in Annex A. The different columns of this list are explained in Table 3-3. The resolution of all the 11 CARs, 0 CLs (CPA-DD) raised for this project activity is enclosed in Annex A of this Validation Report. The table shows the interaction between the project participants on one hand and GLC audit team on the other hand which resulted in the revision of the final CPA-DD to version 07 dated 2012-09-06. Upon successful closure of the raised CARs and CRs the assessment team confirms that there are no remaining non-conformities.




Table 3-2: Structure of the Validation Questionnaire

CHECKLIST

QUESTION / VVM

REQUIREMENT

SOURCE MEANS AND

FINDINGS OF

VALIDATION

Assessment

based on POA-

DDand CPA-

DDs in GSP

Conclusion based

on Final PoA-DD

and CPA-DDs

Lists CDM requirements which the project should meet. The checklist is organised in several different sections. Each section is then further sub-divided. The lowest level constitutes a checklist question.

Gives reference to documents where the checklist question or item is from.

The section is used to elaborate and discuss the checklist question and/or the conformance to the question. It is further used to explain the conclusions reached.

This is either acceptable based on evidence provided (OK), or a Corrective Action Request (CAR), Clarification request (CL), or Forward Action Request (FAR).

This is either: OK, when the Draft Conclusion is OK or raised CAR/CL have been successfully closed out; OK, with only FAR remaining; Or: CAR/CL/CRs

Table 3-3: Structure of the Findings List – Resolution of Corrective Action and Clarification Requests

Description of Finding (CAR, CL, FAR)

Describe the finding in a transparent manner i.e. state

clearly what is required and why; address the context (e.g. section)

Project Participants Response This section shall be filled by the PP. The finding shall be addressed with suitable

arguments and evidence

GLC Assessment The assessment shall include how the finding is closed i.e. how it is found that

the response is assessed to be appropriate and meeting the specific

requirement of the finding. In case the response is not satisfactory, additional

response and DOE assessments (#2, #3, etc.) shall be sought.

Closed Out? (Y/N)

In this column a finding is described in a clear and transparent manner. It also shall be described which further information is needed or which correction must be applied. The date of issue is also indicated

In this column the PP shall provide a clear statement how to close the finding. This statement shall be sustained with suitable arguments and evidence. The date of response is also indicated.

In this column GLC shall provide the conclusion of the assessment. The finding can be close here or if the argumentation and/or evidence are not suitable a new line below with the continuation of the finding will be opened. The date the response is assessed is also indicated.

GLC indicates whether the issue raised in the finding has been closed out or not




4 VALIDATION REPORTING

4.1 Participation in the Project Activity and Parties Approval

The project participants, as indicated in the final PoA-DD in section A.3 and in annex 1 are:

� ÉcoRessources Carbono S.A.C. as the CME and, � Mabanaft Carbon B.V.

No entities other than those approved as project participants are included in these sections of the PoA-DD. Mabanaft Carbon B.V. has been approved by the DNA of The Netherlands according to the Letter of Approval with reference number 2012ANL592 /32/ issued on 2012-03-26 authorizing Mabanaft Carbon B.V. as a project participant. The Netherlands approval has further been double checked with the List of Approved Projects published by the Ministry of Infrastructure and the Environment, International Affairs Directorate /33/. The following Non-Annex I countries have issued Letter of Approvals authorizing ÉcoRessources Carbono S.A.C. as the CME of the PoA in their respective countries since according to EB 55 Annex 38 Procedure for registration of a programme of activities as a single poject activity version 4.1/27/ and PoA Standards/31 “The operators of individual CPAs are not required to be project participants. CDM programme participation is only recorded at the PoA level.” The DNA from the host country of Nicaragua, Oficina Nacional de Desarrollo Limpio (Nacional Office for Clean Development, ONDL), has issued a Letter of Approval /34/ on 2012-02-01 authorizing ÉcoRessources Carbono S.A.C. as a project participant and also as the CME to coordinate and manage the PoA in Nicaragua. The Nicaraguan approval has been checked by the validation team through personal interviews with Mr. Manuel Madriz, ODNL coordinator, who confirmed the authorization for the CME and the Tepeu Wind Programme of Activities as stated in LoA with reference number DM-JAS/0092.02.12. The host country of the first CPA, Nicaragua, the annex I Party, The Netherlands, and the additional host country of Peru all fulfill the requirements to participate in CDM project activities. GLC received these letters from the project participants directly and after double checking, considers the provided letters to be authentic according to VVM § 49(c). Furthermore, after checking the LoAs provided, GLC is able to confirm that the letters refer to the same proposed CDM project activity titled Tepeu Wind Programme of Activities which is in line with the title in the PoA-DD. The letters also indicate that each of the participating Party is a Party to the Kyoto Protocol, and that the participation in the Tepeu Wind Programme of Activities project is voluntary. The LoAs from the Non-Annex I countries also confirm that the proposed CDM project activity contributes to the sustainable development of their countries (host countries). Based on the information given in these letters, GLC




considers the approval and the participation of each of the parties as unconditional. The requirements of the VVM (§§ 45-48) are therefore considered to be complied with.

4.2 CPA Project Design Document

GLC can confirm that the CPA-DD generic and CPA-DD specific case have been completed in accordance with relevant Form and Guidance as provided by UNFCCC. The most recent versions of the CPA-DD generic and CPA-DD specific case form under VVM track have been used with relevant information provided by the participants in the applicable sections. Correctness and completeness was assessed and documented through the questionaire included in Annex 1.

4.3 CPA Project Description and Technology to be Applied

The CPA to be implemented in La Fe farm, near the city of Rivas, Nicaragua as the first CPA to be included under the PoA involves the installation of 22 wind turbine generators with a total installed of 39.6 MW. The project generation capacity is above the SSC threshold, therefore it is not subject to a debundling check, as per the “Guidelines on assessment of debundling for SSC project activities” (version 03)/22/. In addition, through interviews and document review performed during the on-site visit, the GLC validation team confirmed that wind power projects neighboring this CPA (e.g. in the region of Rivas) belong to different PPs and have different turbine suppliers, so it was confirmed that this CPA cannot be not considered a part of a larger project activity.

Based on document review, interviews and observations by the GLC validation team (including confirmation of GPS coordinates) during the on-site assessment, it can be confirmed that the project will be implemented over an area of 214 hectares enclosed within the following coordinates:

Table 4-1: Coordinates encompassing the project activity area /36/

Point Latitude Longitude

1 11.395403 - 85.799375 2 11.395350 - 85.795589 3 11.386644 - 85.785106 4 11.380894 - 85.784781 5 11.374681 - 85.786447 6 11.365814 - 85.787733 7 11.358875 - 85.795761 8 11.362328 - 85.804031 9 11.371522 - 85.812797 10 11.378469 - 85.795844

The electricity generated by the proposed project will be exported to the Nicaraguan Interconnected System (national power grid of Nicaragua). The project start date is 2012-02-17/23/, the operational lifetime is 20 years /50/ and the renewable crediting period is 7 years, starting on the date of registration of the PoA or the expected date of commissioning on 2013-03-31/56/, whichever is later. The project contributes to sustainable development of the host country, and no ODA is involved in project financing.




Technical details of the project equipment are presented below:

Table 4-2: Technical specification of the wind turbines /39/

Parameter of Turbine Unit Value Model - V100-1.8 MW Quantity - 22 Rated capacity kW 1800 Class IEC S Rated Voltage kV 34.5 Diameter m 100 Hub height m 80 Rated wind speed m/s 9.9 Manufacturer Vestas

Note: Vestas will also supply a SCADA system for the project operation.

Table 4-3: Micro-sitting for the wind turbines as proposed by the equipment manufacturer /36/

Wind

Turbine Latitude Longitude

1 11.394658 -85.798763 2 11.360961 -85.799445 3 11.388509 -85.789918 4 11.391444 -85.797961 5 11.364374 -85.800393 6 11.388123 -85.797196 7 11.385169 -85.789108 8 11.383943 -85.796517 9 11.382119 -85.788406 10 11.371678 -85.802113 11 11.372429 -85.809019 12 11.380242 -85.795772 13 11.36042 -85.793244 14 11.365603 -85.793708 15 11.367514 -85.801049 16 11.371537 -85.794343 17 11.36503 -85.788441 18 11.377958 -85.787855 19 11.37579 -85.794975 20 11.374284 -85.787239 21 11.366556 -85.807898 22 11.375533 -85.803022

As confirmed through document review and interviews with the project participants, the final geographical coordinates defined in the proposed micro-sitting above could be subject to slight variations due to actual soil conditions at the time of installation of the wind turbines. A final micrositting




showing the final geographical coordinates for each wind turbine will be presented during the verification of the CPA. This is considered reasonable and correct.

The total emission reductions from the project are estimated to be 751,626 t CO2e over the selected 7 year (renewable) crediting period (an average of 107,375 t CO2e per year), as indicated in the emission reduction calculation spreadsheet /14/. It is the opinion of the validation team that a clear and sufficient description of the project activity is provided in CPA-DD/1/, covering all relevant aspects. Precise nature of the project activity and the technical aspects of its implementation are presented in an understandable manner. All information regarding project design in CPA-DD/1/ is consistent with the result of on-site inspection and document check.

4.4 CPA Compliance against the Eligibility Criteria for Inclusion under the PoA

The Coordinating and Managing Entity (CME) has outlined clear and unambiguous criteria for the inclusion of a CPA under the PoA. These Eligibility Criteria have been validated by GLC with regards to the applicability of the applied methodology ACM0002 version 12.3.0 /2/, Technological requirements, manufacturer specifications for wind turbines, CPA location and boundary, start date, scale and additionality of each CPA, monitoring requirements of each CPA, host country laws and regulations, contracts signed between ÉcoRessources Carbono S.A.C. and CPA implementer Alba de Nicaragua S.A. (ALBANISA), avoidance of double counting and de-bundling. Details of the evaluation of the Eligibility Criteria were captured in the CPA validation questionaire in Table 3 of Annex A of this report. PPs revised the Eligibility Criteria mentioned in the CPA-DD uploaded at GSC by including the specifications of technology/measure including the level and type of service, performance specifications including compliance with testing/certifications, as well as specific requirements stipulated by the CME including any conditions related to undertaking local stakeholder consultations and environmental impact analysis. This is also in agreement with the recently adopted EB 70 Annex 5 PoA Standard /31/ This is also according to Validation and Verification Manual paragraph 167 which says eligibility criteria should “...include inter alia the means of demonstrating the additionality of the CPA and the applicability of the applied methodology” /6/.

GLC can therefore confirm that the list of Eligibility Criteria as indicated in the final PoA-DD and applied in this CPA is appropriate and complete and that this CPA fully complies with the validated Eligibility Criteria. For detailed assessment please refer to Table 3 in the Annex of this report.

4.5 The Coordinating and Managing Entity (CME) and CPA implementer

It has been stated in section A.3 of the PoA-DD that ÉcoRessources Carbono S.A.C. is the CME which will be jointly communicating with Mabanaft Carbon B.V. to the Executive Board. The operation and management of the PoA will be coordinated by ÉcoRessources Carbono S.A.C. The CME will enter into a contractual relationship with the implementers of the CPAs and provide training on data monitoring and recording. The contractual arrangement suscribed with ALBANISA includes the following provisions:




� The CPA has not been and will not be registered as a single CDM project activity or as a CPA under another PoA.

� The project implementer is aware that the CPA will be subscribed to this PoA � The project implementer cedes its rights to claim and own emission reductions, under the Clean

Development Mechanism of the UNFCCC or any voluntary scheme, to the managing entity of this PoA.

� The project implementer certifies that the CPA is not registered under the Clean Development Mechanism of the UNFCCC or any voluntary scheme.

This arrangement will help avoid double counting - to avoid the case of including a new CPA that has already been registered either as a CDM project activity or as a CPA of another PoA. The CME will create, manage and continuouslly update a record keeping system (database) for each CPA under the PoA, which contains the following information per CPA:

1. Name of the CPA and unique ID number. 2. CPA status. 3. Name of the implementing entity of the CPA. 4. Contact detail of the implementing entity, including contact person, address, telephone and e-

mail. 5. Installed capacity and other relevant technical specifications of the CPA. 6. Location of the CPA (coordinates). 7. Verification status and monitoring reports. 8. Recording and storing of all relevant information of the PoA and CPAs in a minimum of two

geographically distinct and secure digital locations. A sample of the database (still under contruction) as well as the training manuals contained in the CME Operation Manual /7/ has been presented to the audit team during the site visit. GLC can therefore confirm that the CME, with the structure in place, will be able to manage and coordinate the PoA as described in the PoA-DD according to the requirements of Validation and Verification Manual, paragraph 166/6/, since the structure is “sufficient to ensure that the coordinating/managing entity will have control of all records and information related to the implementation of individual CPAs and will be in a position to ensure each CPA is being operated in accordance with the specific requirements of the programme”. The GLC validation team further assessed documents relevant to the experience of ÉcoRessources Carbono S.A.C for acting as CME or implementing a PoA /8/. GLC confirms that the CME has demonstrable experience in emission reduction projects, with active involving and participation in the development of several other PoAs in Latin America. It was confirmed during the on-site visit that ÉcoRessources Carbono S.A.C was appointed by Mabanaft Carbon B.V. as the Coordinating and Managing Entity to manage this PoA. In this regard, Mabanaft Carbon B.V. and ÉcoRessources Carbono S.A.C have signed a formal agreement /17/ stating that ÉcoRessources will act as the CME of the proposed PoA, have direct contact with all the CPA implementers, and execute all responsibilities of a CME. This agreement is valid for the entire duration of the PoA.




In addition, Mabanaft Carbon B.V. entered into an agreement with ALBANISA /18/ where the inclusion conditions are described, and which requires ALBANISA to work directly with the CME, to submit all requested information of the project and to provide support and assistance during the implementation and operation phases, in order to meet the inclusion and monitoring requirements of the PoA. Both Mabanaft Carbon B.V. and the CME have also developed a Cooperation Agreement to be signed tripartite with each CPA /19/. This agreement is a direct contractual document which details the responsibilities of the CME and CPA implementer the context of the PoA.

4.6 Baseline and Monitoring Methodology

4.6.1 Applicability of the Selected Methodology to the CPA GLC has checked the compliance with each applicability criterion as listed in the applied baseline and monitoring methodology ACM0002 version 12.3.0 /2/, and can confirm that all applicability criteria have been demonstrated by this CPA. The selected baseline and monitoring methodology also refers to the following tools:

� Tool to calculate the emission factor for an electricity system (version 02.2.1)/9/; � Tool for the demonstration and assessment of additionality (version 06.0.0) /4/; � Combined tool to identify the baseline scenario and demonstrate additionality (version 4.0.0) /5/; � Tool to calculate project or leakage CO2 emissions from fossil fuel combustion (version 02) /24/.

The assessment was carried out for each applicability criterion in ACM0002 and applicable tools including, among others, the compliance check of the local project setting with the applicability conditions with regard to baseline setting and eligible project measures. This assessment also included the review of other sources not provided by PPs, and these sources could confirm that applicability conditions are complied with. The Methodology specific checklist (validation questionnaire: Application of a baseline and monitoring methodology to a typical CPA) included in Annex A, documents the assessment process of the applicability check, which also includes the various steps taken in the course of the validation. The results of the compliance check, as well as the relevant evidences, are detailed in Annex A - the validation questionaire. GLC is able to confirm that the chosen baseline and monitoring methodology ACM0002 version 12.3.0 /2/ is applicable to the CPA. The applicability of the selected methodology has been included in the list of eligibility criteria as required according to the Validation and Verification Manual/6/ paragraph 167 which states that eligibility criteria should “...include inter alia the means of demonstrating …the applicability of the applied methodology.” Moreover, as refered in ACM0002 version 12.3.0 /2/, the Tool to calculate the emission factor for an electricity system (version 02.2.1)/9/ will be followed to calculate the CO2 emission factor for the displacement of electricity generated by power plants in the electricity systems where the CPAs will be implemented. Emission sources, which are not addressed by the applied methodology, and are expected to contribute more than 1% of the overall expected annual average emission reductions, have not been identified. This project therefore fulfils all the applicability criteria of the applied methodology and the tools therein.




4.6.2 CPA Project Boundary This PoA is international and its boundary is defined as the geographical area within which all CPAs included in this PoA will be implemented. The geographical boundary of the PoA will be the national boundaries of all the CPA host countries. The boundary of each CPA includes the spatial extent of the project power plant and all power plants connected physically to the electricity system that a CPA power plant is connected to. The physical boundary (electricity system) for this CPA has been defined in the CPA-DD and includes the project activity and all power plants phisycally connected to the national grid of Nicaragua. This is in accordance to the applied methodology and GLC therefore considers the definition of the project boundary appropriate.

4.6.3 Baseline Identification As prescribed by the methodology ACM0002 version 12.3.0 /2/, the baseline scenario is identified as follows for new grid connected renewable power plant/unit: “Electricity delivered to the grid by the project activity would have otherwise been generated by the operation of grid-connected power plants and by the addition of new generation sources, as reflected in the combined margin (CM) calculations described in the “Tool to calculate the emission factor for an electricity system”.

The CPA involves the construction of a new grid-connected wind power plant, thus the electricity generated will displace electricity generated by fossil-fuel power plants connected to the Nicaraguan Interconnected System (national power grid of Nicaragua, NIS) during its operation.

Through document review and based on interview with the CME it has been verified that the baseline scenario is identified according to the methodology; and in regard to item 87 of VVM. GLC hereby confirms the following statements: a) All the assumptions and data used by the project participants are listed in the PoA-DD, including

their references and sources; b) All documentation used is relevant for establishing the baseline scenario and correctly quoted and

interpreted in the PoA-DD; c) Assumptions and data used in the identification of the baseline scenario are justified

appropriately, supported by evidence and can be deemed reasonable; d) Relevant national and/or sectoral policies and circumstances are considered and listed in the

PoA-DD; e) The approved baseline methodology has been correctly applied to identify the most reasonable

baseline scenario and the identified baseline scenario reasonably represents what would occur in the absence of the proposed CDM project activity.

4.6.4 Algorithms and Formulae used to Determine Emission Reductions The calculations are done as per applied methodologies ACM0002 version 12.3.0 /2/ and the relevant provisions of the tools referred therein (i.e. the Tool to calculate the emission factor for an electricity system version 02.2.1 /9/). The ERy of the project activity during the crediting period is the difference between the baseline emission (BEy) and the sum of project emission (PEy) and leakage (LEy).




GLC has assessed the calculations of project emissions, baseline emissions, leakage, and emission reductions. Corresponding calculations were carried out based on the calculation spreadsheets of emission reductions /14/ for the first CPA to be included under this PoA. The parameters and equations presented in the PoA-DD and CPA-DD as well as in other applicable documents have been compared with the information and requirements presented in the methodology and other applicable tools. The equation comparison has been made considering all the formulae presented in the emission reduction calculation sheet for Nicaragua/14/ and in the emission factor for the electricity system in Nicaragua calculation sheet /13/. The combined margin emissions factor for the NIS was calculated as 0.6886 tCO2/MWh. This calculation was done as required by the Tool to calculate the emission factor for an electricity system version 02.2.1 /9/.

The assumptions and data used to determine the emission reductions are listed in the first CPA-DD and all the sources have been checked and confirmed as reported in Annex A – Validation Questionnaire. The validation team confirms that the estimates included in the CPA-DD for data and parameters that are monitored during implementation are reasonable and are available after validation as per VVM § 91 /6/. Based on the information reviewed it can be confirmed that the sources used are correctly quoted and interpreted in the Nicaragua CPA-DD/1/. The values presented in the CPA-DD are considered correct based on the documentation and references reviewed as well as on the result of interviews conducted during the site visit. Thus, it is the validation team’s opinion that the estimates in the CPA-DD of the parameters monitored ex-post are reasonable. The baseline methodology has been correctly applied according to requirements. The estimate of the baseline emissions can be confirmed to be the same as that which have been replicated by the audit team using the information provided. Detailed information on the validation of the parameters used in the equations can be found in Annex A – Validation Questionaire. The algorithms for the determination of the baseline, project, and leakage emissions are discussed below in subsequent sections of this report. Baseline Emission of this CPA:

As per ACM0002 version 12.3.0/2/, baseline emission is calculated as quantity of net electricity generation that is produced and fed into the grid as a result of the implementation of a CPA in year y (EGpj,y) multiplied by the combined margin CO2 emission factor for grid connected power generation in year y (EFgrid,CM, y).

As per “Tool to calculate the emission factor for an electricity system” (version 02.2.1), the baseline emission factor (EFgrid,CM, y) is determined as a combined margin (CM), consisting of the weighted average of operating margin (EFOM) and build margin (EFBM) factors. For this CPA located in Nicaragua the CM will be defined ex-ante using option (a) of Step 3 in the tool. PPs have used official electricity generation data from the Nicaraguan Electricity Institute (INE) /10/ for calculating the EFOM and EFBM. For the first crediting period, EFgrid,CM, y is calculated using default weighting values for the operation and built margins (wOM and wBM) for wind and solar power generation project activities of 0.75 and 0.25 respectively as per the “Tool to calculate the emission factor for an electricity system” (version 02.2.1). The value presented in the CPA-DD for the combined emission factor (0.6886 tCO2/MWh), calculated with the most recent information available at the time of start of validation, is considered to be




reasonable based on the documentation and calculations reviewed /13/ and based on interviews with local representatives from the Nicaraguan grid operator (INE). GLC can therefore confirm that the baseline for the first CPA in Nicaragua (i.e. electricity delivered to the grid by the project activity would have otherwise been generated by the operation of grid-connected power plants and by the addition of new generation sources) has been calculated correctly and according to ACM0002 version 12.3.0 /2/ and as required in the tools referred to therein. The CME has defined that, for CPAs located in Nicaragua, the CM will be determined on a yearly basis and applied ex-ante over the crediting period of each CPA. In light of this, the CM shall be established at the CPAs and validated during inclusions by the contracted DOE. Project Emission of this CPA: According to the methodology ACM0002 version 12.3.0 /2/, project emission is zero. No consumption of fossil fuel or electricity is expected. Leakage of this CPA: As per ACM0002 version 12.3.0 /2/, no leakage emissions are considered. Emission Reductions of this CPA: Emission reductions would be the emissions avoided by the implementation of the project activity discounted by any leakage emissions and/or project emissions caused by the project activity. Thus, the first CPA “Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1” would achieve a total emission reductions of 751,626 tCO2eq in the first 7 years crediting period and an average of 107,375 t CO2e per year /14/.

4.7 Additionality of the SSC-CPA

This Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1 is additional – the emission reductions that would be achieved as a result of implementing the CPA would be below those that would have occurred without the implementation of the project as demonstrated below. Additionality demonstration for this CPA follows the approach and provisions in Section E.5.1 of the PoA-DD for off-shore wind power projects above 15 MW and all on-shore wind power projects. For these project types, additionality demonstration will be assessed using the “Tool for the demonstration and assessment of additionality” (version 06.0.0)/4/. As defined by the CME, Step 2 (investment analysis) of the tool will be applied. The investment analysis will be performed by determining a suitable benchmark for each host country in the PoA boundary, while the financial indicator for the CPAs will be the internal rate of return (IRR).

4.7.1 Prior Consideration of the Clean Development Mechanism The starting date of the PoA has been defined as 2012-12-20, which is the expected date of PoA registration, while the start of validation, which is the date that the PoA documentation was uploaded on the UN website and made available for GSC, was 2011-12-28. It shoud be noted that the Board agreed that the Guidelines for the demonstration and assessment of prior consideration of the CDM do not apply to PoAs, as at present it is expected that no component of the programme will commence prior to




the start date of validation (EB 60, Annex 26 April 15, 2011) /16/. The first CPA start date is 2012-02-17/23/ which is after the start of validation of the PoA. Therefore the PoA is exempted from assessment of prior consideration of the CDM according to EB 60, Annex 26 April 15, 2011/16/. The start date indicated for the first CPA corresponds to the date of the contract for wind turbine acquisition with Vestas /23/ (wind turbine manufacturer). This is defined as adequate and reasonable as per the Glossary of CDM Terms (version 07) /21/.

4.7.2 Identification of Alternatives to the CPA

As indicated in ACM0002 version 12.3.0 /2/, if the project activity is the installation of a new grid-connected renewable power plant/unit, the baseline scenario is defined as:

Electricity delivered to the grid by the project activity would have otherwise been generated by the operation of grid-connected power plants and by the addition of new generation sources, as reflected in the combined margin (CM) calculations described in the “Tool to calculate the emission factor for an electricity system”.

Therefore, since the CPA is a new, grid-connect wind power plant, identification of alternatives to this CPA is not required.

4.7.3 Investment Analysis Following the selected approach by the PPs, this CPA followed Step 2 (investment analysis) of the “Tool for the demonstration and assessment of additionality” (version 06.0.0)/4/ in order to demonstrate additionality. As per the "Guidelines on the assessment of investment analysis" /26/, if the alternative to the project activity is the supply of electricity from a grid this is not to be considered an investment and a benchmark approach is considered appropriate. Hence the PPs have chosen Sub-Step 2b Option III: Benchmark Analysis. In the case of the host country of Nicaragua the benchmark rate has been derived from government bond rates increased by a suitable risk premium, as per “Guidelines on the assessment of investment analysis” (version 05) /26/. The assessment of the appropriateness of the benchmark rate for Nicaragua has been applied as required and presented below and in Section B.3 of Annex A of this report. It should be noted that as per the “Guidelines on the assessment of investment analysis” /26/, the expected return on equity is composed of four elements: (a) a risk free rate of return; (b) an equity risk premium; (c) a risk premium for the host country; and (d) an adjustment factor to reflect the risk of projects in different sectoral scopes. Also as per Methodologies Panel Fiftieth Meeting Report Annex 8, Information Note on “Default values for equity return for CDM projects” /58/ the minimum required return on equity for a country for any specific project is equal to the risk free rate of return + equity risk premium + risk premium for the country + risk premium for the specific industry group. Therefore, the GLC validation teams confirms that the formula applied for determining the benchmark rate for Nicaragua is appropriate and in accordance to available EB guidance. Each parameter of the formulae presented (IRRBENCHMARK = Risk-Free Government Bond Rate + (Nicaragua Total Risk Premium + Nicaragua Electricity Sector Premium)) was crosschecked with the




references provided in the PoA-DD. As a link to publicly available sources for each value is provided in order to cross-check the source, the information is considered credible and reliable. The resulting benchmark for this CPA (IRRBENCHMARK = 21.0362%) is considered appropriate. As per Methodologies Panel Fiftieth Meeting Report Annex 8, Information Note on “Default values for equity return for CDM projects” /58/: since the US stock market has the longest well recorded data for government bonds as well stocks, estimating risk free rate of return and equity risk free return based on US market is justifiable. Therefore the use of US government bonds as the risk-free government bond rate component in the benchmark calculation is deemed appropriate and correct. The validation team also confirms that the benchmark rate for Nicaragua corresponds to a nominal, post tax rate since each of its components (Risk-Free Government Bond Rate, Nicaragua Total Risk Premium, Nicaragua Electricity Sector Premium) is sourced from historical, non-indexed data (e.g. no inflation is considered) so that the resulting benchmark can be duly compared against the equity IRR of this project resulting from nominal cashflows as presented in the investment model1. Moreover, the GLC validation team conducted a review of relevant independent sources referenced in the PoA-DD for the purpose of comparing the conservativeness of the calculated benchmark. The validation team reviewed the “Renewable Energy Market Analysis for Nicaragua” undertaken by the Project ARECA for the Central American Bank for Economic Integration (BCIE)/42/, the United Nations Development Program (PNUD/UNDP) and the Global Environmental Facility (FMAM/GEF) in 2010. This documents states that the estimated rate of return for investments (equivalent to IRRBENCHMARK) in the electricity sector in Nicaragua average 23.5%, mainly due to a higher perceived country risk. Hence the benchmark used is considered conservative. All the studies and regulations were checked carefully and found correct. All the variables were confirmed through physical evidence such as official documentation and valid web references. The calculation of the IRR for this project is based on a list of economic parameters provided by the CPA owner that were available at the investment decision. These parameters included: Technical Parameters (e.g. annual electricity generation, technical lifetime), Financial Parameters (e.g. electricity tariff), Incomes (e.g. electricity and power) and Costs and Investment (e.g. total investment, operation and maintenance). As declared by the CPA owner (Alba de Nicaragua S.A. - ALBANISA) through a sworn declaration /35/ and as also confirmed by the GLC validation team through interviews carried out during the on-site assessment, this CPA will be financed by ALBANISA without any debt component i.e. 100% equity participation. Thus project IRR and equity IRR i.e. project return on equity are equivalent in the project activity case and there is no need to differentiate the exclusion/inclusion of the portion of investment that is going to be financed by debt in the net cash outflow, neither the cost of servicing debt (interest and 1 It should be noted that no escalation (i.e. subtraction of the accumulated inflation) was made to the cash flow because the cash flow was not expressed in real terms. The only parameters in the financial model for Alba Rivas which affected by inflation correspond to “Operation and minor maintenance + Administrative Expenses” and “Generator maintenance”. By factoring in the average forecasted inflation rate for Nicaragua (7.5%, 5-year average, as reported by the International Monetary Fund)/59/ to these parameters the annual costs for the project activity will increase proportionately, resulting in a less conservative additionality analysis. Through review of the referenced sources and calculations presented in the financial model / 15/ and based on financial expertise, it is the opinion of the GLC validation team that the approach undertaken by the project participant to present the cash flow as nominal is valid and leads to a conservative analysis of the additionality demonstration.




principle payments) in the cash flow, given that the calculation made considering project IRR or equity IRR will provide the same output (i.e. same IRR value). Therefore, the GLC validation team confirms that the IRR calculated for the project is suitable for comparison with the selected equity benchmark and in accordance to the guidance from EB62 Annex 5 “Guidelines on the Assessment of Investment Analysis” 26/. The equity IRR calculated for Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1 is 9.98%, as indicated in the CPA-DD, which is lower than the calculated benchmark IRR. The financial calculation has been completely checked, all the references provided in Table 3 of the CPA-DD were checked and no mistakes have been found. Available evidence and expertise in the relevant financial practices was considered as part of the assessment. The following table contains details of the assessment of key financial parameters used in investment analysis:

Table 4-3: Assessment of financial parameters

Parameter Value applied

Unit Means of Validation and Conclusions

Electricity sales price

98.850

USD/MWh The electricity sales price has been estimated to be 98.850 USD/MWh and the value was sourced by the project participant from power purchase agreements (PPA) published by INE /10/ which show the electricity sales tariffs for all power generators that have a current and valid PPA with one of the transmission companies in Nicaragua. The validation team has reviewed the publicly available PPAs and concluded that the tariff selected was adequately selected by the project participant based on the information available at the time of investment decision. This price is higher than the ones considered for other wind power plants in Nicaragua like Amayo (UNFCCC Ref 2315, price: 86.25 MWh) and Amayo II (UNFCCC Ref 5305, price 92 USD/MWh). It should be noted that these two projects are located within the same region and the same province (Rivas) in Nicaragua, and therefore the electricity tariff applied in both cases can be deemed comparable to the proposed CPA. It can be confirmed that the electricity price estimated based on data published by INE is a credible and reliable source. GLC identified that the electricity sales price of 98.850 USD/MWh is appropriate for wind power projects in Nicaragua and that the value is valid and applicable at time of investment decision. The value has been correctly indicated in CPA-DD /1/ and






Financial Model for Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1 /15/.

Time of investment decision

2012-02-17 (date) The time of investment decision for this CPA was confirmed by the validation team as 2012-02-17 based on Supply, Installation, Commissioning and Testing Contract from Vestas /23/, the Project Construction Planning/56/ also from Vestas, and through interviews with staff from CPA implementer during the on-site assessment. Since this contract represents the main disbursement for acquiring the project activity equipment, the validation team deems this timing as consistent and appropriate as the correct time that the CPA implementer made the investment decision, in accordance with the “Guidelines on the assessment of investment analysis” (version 05) /26/.

Gross Energy Generation

183,450.00 MWh/y The gross power generation estimate was based on the Wind Farm Assessment Report for Albarivas by Vestas/43/, the turbine manufacturer, dated 2011-12-28. As per the turbine type, number of generators, individual capacity, and operational losses (indicated as 0.5%), the turbine manufacturer estimates that the plant will generate 183,450.00 MWh/y/43/. The value has been correctly indicated in CPA-DD /1/ and Financial Model for Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1 /15/.

Generation Capacity 39.60

MW The installed capacity (22 x 1.8 MW = 39.60 MW) has been sourced from the Wind Farm Assessment Report for Albarivas by Vestas/43/, the turbine manufacturer, dated 2011-12-28. The estimation of the generation capacity potential is based on the theoretical output of the wind turbines, while also taking into account on-site






wind measurements/44/. The capacity estimates were carried out by Vestas using WindPro 2.7 and WAsP 8.3 software. Moreover, the generation capacity was confirmed with the “Supply, Installation, Commissioning and Testing Contract”/23/ between the CPA owner and Vestas, the equipment manufacturer.

Load Factor 45 % The load factor has been estimated to be 45%, which is derived from Wind Farm Assessment Report for Albarivas by Vestas/43/ and typical Availability and electric losses (estimated as 15%)/45/ as follows: Load Factor = Gross Energy Generation * (1 - Availability and electric losses) / (Generation Capacity * 8760 Load Factor = 183,450 MWh * (1 – 15%) / (39.6 MW * 8760 h/y = 45% This net load factor is comparable to the ex-ante value considered for other wind power plants within the same region and the same province (Rivas) in Nicaragua: Amayo (UNFCCC Ref 2315, 48.5%) and Amayo II (UNFCCC Ref 5305, 48.97%). However, according to the actual generation data from four available Monitoring ReportsI/57/ published at the UNFCCC website, the net load factor for Amayo I (UNFCCC Ref 2315) has historically ranged from 34% to 43% between April 2009 and March 2012. Considering that the actual net load factor for Amayo I is lower than its ex-ante estimation (and based on actual generation data which takes into account real availability and losses occurring at the project site), then the load factor estimated for Albarivas is thus deemed appropriate and conservative for the purpose of estimating ex-ante revenue from electricity generation in the investment analysis of the CPA. The value has been correctly indicated in CPA-DD /1/ and Financial Model for Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1 /15/.

Availability and electric losses

15.00 % Availability and typical operational losses for wind farms were estimated as 15%, which is a value consistent with research by the European Wind Energy Association/45/. Loss factors taken into account included wake effects, turbine availability, electrical efficiency, turbine performance and environmental conditions.






Net Estimated Energy Sold

155,932.50 MWh/y The average net electricity generated and sold to the Nicaraguan grid was estimated as 155,932.5 MWH/y. The values have been calculated based on the Gross Energy Generation minus the availability and electric losses, as follows: Net Estimated Energy Sold = Gross Energy Generation * (1 – Availability and electric losses) Net Estimated Energy Sold = 183,450 MWH/y * (1 – 15%) = 155,932.5 MWH/y The calculation of net electricity generation has been checked and identified to be correct and appropriate.

Initial investment Civil works (18,800,000 USD) Machinery and Equipment (64,540,000 USD)

83,340,000

USD The total investment has been estimated to be 83,340,000 USD and the value is sourced from financial proposal by Vestas, the equipment manufacturer /46/. The total investment costs are a summary of the cost of civil works, transmission line, substation, and turbine generators (including transportation and commissioning). Pre-investment costs included wind tower costs, prefeasibility studies costs, administrative and office costs, and generation license cost /47/. The proposal by equipment supplier Vestas and the evidences related to pre-investment costs have been assessed and figures are deemed credible and reliable. Furthermore, investment costs for this CPA were compared against other wind power plants within the same region and the same province (Rivas) in Nicaragua: Amayo (UNFCCC Ref 2315) and Amayo II (UNFCCC Ref 5305). The investment amount per MW of installed capacity for this CPA is 2,104,545 USD/MW. The total investment for Amayo (23.1 MW of installed capacity amounts to 58,863,000 USD (or 2,548,181 USD/MW), while the total investment Amayo II (39.9 MW of installed capacity amounts to 80,233,000 USD (or 2,010852 USD/MW). Through comparisson of investment costs against similar wind power projects within the same host country, the validation team confirms that the investment costs referenced for this CPA are credibleand relevant in the






context of the financial analysis of this CPA. Thus, based on a review of available evidences, the validation team can confirm that the values utilized in the investment analysis are reasonable and correct.

Operation and minor maintenance + Administrative Expenses Generator maintenance

594,957

67,000.00

USD/y

USD/ unit/y

The operational and administrative expenses of the CPA has been determined by the ALBANISA based on internal costs studies and include salaries, administration, vehicles and equipment, fuel, office space and supplies/48/. The annual estimated expenses amount to 594,957 USD, which has been deemed credible and the value valid and appropriate. The value has been correctly indicated in CPA-DD /1/ and Financial Model for Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1 /15/. The maintenance cost per turbine has been estimated to be 67,000 USD (considering 22 generators, the total maintenance cost amounts to 1,474,000.00 USD/y) and the value is sourced from a maintenance and service proposal by Vestas, the equipment manufacturer /49/. The proposal by equipment supplier Vestas have been assessed and figures are deemed credible and reliable. The total annual operating and maintenance costs (including administration) is 2,068,957USD, or 0.0133 USD/Kwh (considering net electricity generation). This is a value consistent with data from the European Wind Energy Association/45/, which reports that O&M costs based on experiences in Germany, Spain, the UK and Denmark, are estimated at 1.45 c€/kWh (cents of euro per kWh), or 0.0182 USD/kWh. Hence, based on the reviewed evidences and comparison to technical information sources, the O&M costs are deemed reasonable and correct.

Land Rent 0.75 % of electricity sales

As no formal contract had been signed at the time of the submission of this validation report the CPA, the value for land rent was determined based on the land rent costs utilized in registered CDM project 5305 (Amayo Phase II Wind Power Project), which is located in the same region and same province of Rivas, within a 25 km distance of the Alba Rivas CPA, in Nicaragua.






This referenced value of 0.75% of annual electricity revenues was confirmed by the validation team through accessing the documentation for the aforementioned project in the UNFCCC website. The value utilized is thus deemed reasonable and valid. The costs estimated for land rent in the investment analysis have been correctly and consistently applied in the CPA-DD. In addition, a lease contract for a wind park from different project developer adjacent to the project location was presented as evidence by the CPA owner for supporting the value utilized in the IRR estimation. The contract is confidential but was made available to the validation team during the on-site visit and upon review was deemed credible and appropriate. The land rent cost shown in this contract was 3% of the electricity revenues, which in comparison is significantly higher than the value utilized in the investment analysis.. The land rent value applied in the Financial Model for Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1/15/ is thus considered reasonable and appropriate since it leads to a more conservative IRR estimation.

Installed Capacity Fee (Regulation INE)

300.00 USD/MW As per regulation by INE/53/, electricity generators in Nicaragua are required to pay an annual fee of 300 USD per MW of installed capacity. This was confirmed by the validation team through interviews with relevant INE personnel during on-site assessment.

Toll (Transmission)

6.37 USD/MWh The toll for transmission of the electricity generated by the CPA amounts to 6.37 USD/MWh. This toll is applied as per relevant Nicaraguan regulation/55/, which was reviewed by the validation team. The toll must be paid to the National Trasmission Company of Nicaragua (Empresa Nacional de Trasmision Electrica), which indicates the value on its website/55/. Thus, the toll and the transmission costs associated are deemed valid and appropriate. The value has been correctly indicated in CPA-DD /1/ and Financial Model for Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1/15/.

Rolling Reserve (Regulation INE)

5.00 % of electricity sales

According to the Norms of Commercial Operation for players in the Nicaraguan power market/54/, a rolling reserve equivalent to 5% of the instant demand is required for all generation units. This is an operating






condition established by the grid operator to balance the network by guaranteeing reserved generation capacity in case of peak demand. However, since wind power plants cannot adjust generation output, this means that ‘reserve power’ must be purchased from another agent in the market. The estimated purchasing price for the equivalent rolling reserve is 98.850 USD/MWh, which is equal to the expected electricity sales price of the project activity. The rolling reserve cost is estimated as follows: Rolling Reserve = 5% * Net Estimated Energy Sold * Electricity Sales Price Rolling Reserve = 5% * 155,932 * 98.85 = 770,696.38 USD/y It can be confirmed that the cost estimated for purchasing rolling reserve power is conservatively estimated, as from data published by INE for the wholesale market where the spot price for electricity reached 166 USD/MWh/54/ in January 2012. GLC identified that the rolling reserve cost is appropriate and conservative in the context of the investment analysis for this CPA, and that the value is valid and applicable at time of investment decision. The value has been correctly indicated in CPA-DD /1/ and Financial Model for Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1 /15/.

Lifetime of the turbine generators

20 y The lifetime of the turbine generators has been estimated to be 20 years. The value is sourced from the technical certification of the turbine generators by DNV for the model Vestas V100-1.8 MW 50/50 Hz VCS Mk 7./50/ . This value is also in line with guidance from the “Tool to determine the remaining lifetime of equipment” (version 01)/51/, which states that project participants may use manufacturer’s information on the technical lifetime of equipment. By means of local and sectoral knowledge, GLC identified that the applied value is appropriate and the source is deemed credible. The value is valid and applicable at time of investment decision. The value






has been correctly indicated in CPA-DD /1/ and Financial Model for Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1 /15/.

Depreciation period 10 y The depreciation period has been sourced from official Nicaraguan legislation “Rulebook of Law No. 453”/52/. The value is applicable for civil works, machinery and equipment. Depreciation is also considered for the civil works, applied to the value of items specified in Vestas Supply Turnkey Proposal /46/. The value of civil works includes, among other items, foundations for the wind turbines, platforms, trenches, supply and installation of underground transmission cables, grounding, supply and installation of optic fiber for controlling and communications, substation, buildings and control boards, transformers and capacitors. The total value of civil works takes into account materials, machinery and labor. As per Rulebook Law 453/52/, depreciation of civil works is possible under Nicaraguan legislation. Based on local expertise, the validation team can confirm that the approach for depreciation of civil works is in accordance with current standard accounting practices in Nicaragua. Furthermore, by means of financial expertise, GLC identified that overall, the applied depreciation approach is appropriate and the relevant sources are deemed credible. The annual depreciation values are valid and applicable at time of investment decision. The values have been correctly indicated in CPA-DD /1/ and Financial Model for Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1 /15/.

Income tax 30 % The income tax has been sourced from official Nicaraguan legislation “Rulebook of Law No. 453”/52/. By means of financial expertise and local and sectoral knowledge, GLC identified that the applied value is appropriate and the source is deemed credible. The value is valid and applicable at time of investment decision. The value has been correctly indicated in CPA-DD /1/ and Financial Model for Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1 /15/.






Benchmark rate 21.0362 % The benchmark rate for Nicaragua was determined through the following formula: IRRBENCHMARK = Risk-Free Government Bond Rate + (Nicaragua Total Risk Premium + Nicaragua Electricity Sector Premium) Where:

Risk free rate of return

3.0362% Estimated using the polynomic regression of the US government bond rate curve in order to obtain the estimate for a 20 year government bond rate. Data from 20/12/2011

Equity risk premium

6.0% Based on Prof. Aswath Damodaran’s “country default spreads and risk premiums” data published in January 2012 Damodaran uses a risk premium of 6% for mature markets obtained from the US Standard and Poor’s 500 index (historical risk premium for a mature equity market).

Risk premium for the host country

9.0% Based on Moody’s rating for Nicaragua (B3) a default spread for that rating (based upon traded country bonds) is estimated over the default free government bond rate.

Adjustment factor to reflect risk of projects in different sectoral scopes

3.0% This adjustment factor refers to the project risk premium which is calculated based on the risk premium of investing in a hydropower project in Nicaragua. The data was obtained from the Renewable Energy Market Analysis for Nicaragua undertaken by the ARECA project for the Central American Bank of Economic Integration, the United Nations Development Program, and the Global Environmental Fund.

/42/

Thus, the benchmark rate was calculated as 21.0362%, as reported in Financial Model for Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1 /15/. The validation team compared this value with the benchmark rate determined for the most recent wind power project






registed in Nicaragua, Amayo II (UNFCCC 5305), which is located in the same region and province as this CPA. Upon review, it was noted that a similar methodology was followed for the calculation of a benchmark rate in Nicaragua, which takes into consideration a relevant risk premium based on US equity, size of industry premium, and the Nicaraguan bond yield premium (equivalent to country premium) which are added to the government bond rate. The benchmark determined for this project is 20%. Moreover, references by the PP to the ARECA project published in 2010 were also reviewed. The ARECA project is a joint effort on behalf of the United Nations Development Programme (UNDP), the Central American Bank for Economic Integration (BCIE) and the Global Environmental Facility (GEF). The discount rate as per this publication is 23.5%. Hence, the determination of the benchmark rate is deemed reasonable and correct, and the references provided for each element are justifiable and relevant.

It should be noted that, according to the “Guidelines on the assessment of investment analysis” (version 05) /26/, “both project IRR and equity IRR calculations shall as a preference reflect the period of expected operation of the underlying project activity (technical lifetime), or - if a shorter period is chosen - include the fair value of the project activity assets at the end of the assessment period.” As per the technical certification of the turbine generators by DNV for the model Vestas V100-1.8 MW 50/50 Hz VCS Mk 7/50/, the expected operational lifetime of the turbines spans to 20 years, which is a time period equal to that of the financial analysis and calculation of the IRR. Moreover, since in accordance with local regulations and accounting practices in Nicaragua/52/, the depreciation period for project assets is 10 years, this means that the residual book value of the project assets will be 0 USD (zero) as these will be fully depreciated by the end of the 20-year project financial evaluation period. Hence, a fair value of the project activity assets (e.g. salvage value) at the end of the assessment period is adequately assumed as zero by the project participants. This is deemed reasonable and correct by the validation team. The assessment is in accordance with applicable guidance of Annex 58 of EB51 “Guidelines on the Assessment of Investment Analysis, version 05”/26/ and the Validation and Verification Manual (version 01.2) /6/.




Four parameters were chosen for performing the sensitivity analysis: Energy Sales (from variations in the price of energy), Energy Sales (from variations in the load factor), Initial investment and Running costs. Variations for each of the four parameters are 53.2%, 81.3%, -42.4%, and -179.4% respectively in order to reach the benchmark, as per the analysis shown in Section B.3 of the CPA-DD. As the turning point for these variations to reach the benchmark is significant, it is justified that the attainable variation of sensitivity analysis indicators is not likely to make the IRR reach the benchmark rate. On the basis of specific local and sectoral expertise, confirmation is provided that the input values from the sources and references applied as assessed above in Table 4-3 “Assessment of financial parameters” were valid and applicable at the time of the investment decision.

4.7.4 Barrier Analysis Not applicable, only Step 2 (investment analysis) of the “Tool for the demonstration and assessment of additionality” (version 06.0.0)/4/ is used for additionality demonstration of this CPA.

4.7.5 Common Practice Analysis The step-wise approach for common practice analysis indicated in the “Tool for the demonstration and assessment of additionality” (version 06.0.0)/4/ has been applied. Given that renewable energy generation is one of the measures listed in paragraph 6 of the tool, the common practice analysis for this CPAs included the procedure defined in paragraph 47. For this, the PPs have defined the applicable geographical region for the common practice analysis as the country of Nicaraguan and its electricity system NIES. The assessment team has reviewed the references presented in the CPA-DD and can confirm that appropriate information sources have been taken into account for demonstrating that the project is not common practice. The assessment team has reviewed official sources such as the website of the UNFCCC in order to confirm that the list of similar projects presented in the CPA-DD is complete and updated. Similar projects with +/-50% capacity range, which are not CDM projects, have been checked through reviewing all available documentation from the INE/10/, which lists the existing grid connected electricity generation units in the host country of Nicaragua (Nall). It was found that all these projects apply a technology different than wind turbines (Ndiff), such as thermal power generation or other renewable energy sources like geothermal. Therefore, it can be confirmed that the proposed CDM activity is not a common practice in the defined geographical region.

4.8 Monitoring Plan of the CPA

All parameters to be monitored for each CPA as detailed in section E.7.1 of PoA-DD will be monitored according to the Monitoring Plan outlined in E.7.2. of PoA-DD. Primary data will be collected by CPA implementers stored according to the procedures defined in section E.7.1. of the PoA-DD. For this CPA located in Nicaragua this will include the monitoring of the following parameter:

Data or Parameter to be monitored Procedure or means of measurement

1

Quantity of net electricity supplied to the grid as a result of the implementation of the CDM project activity in year y / Quantity of net

The net electricity supplied to the grid will be measured continuously and recorded at least every 15 minutes according to the electricity sector requirements.




electricity supplied to the grid by the project plant/unit in year y MWh/yr). (EGPJ,y )

Two class 0.2 main meters (one primary meter and one backup) will be installed in the high voltage transmission line section of the project which will measure the net electricity generation of the power plant. These meters will comply with IEC norms and will be calibrated at least every two years according to the national regulation of Nicaragua. It is the validation team’s opinion that this calibration frequency meets the national requirements as this interval was confirmed based on interviews with relevant staff at INE (grid operator) during the on-site assessment. Meter data will be cross-checked with available internal and/or external information such as electricity invoices or official information of the energy sector institutions (e.g. INE). Generation data will be kept for two years after the end of the crediting period or the last issuance of CERs for this project activity, whatever occurs later.

The CPA implementers will then forward the monitored data to the CME who will in turn store them in an electronic database. The Sampling Method that would be applied. No sampling method will be applied for the purpose of monitoring this CPA by the CME.

4.9 Stakeholder Consultations (Local and Global)

Global Germanischer Lloyd Certification GmbH published the project documents (PoA-DD, CPA-DD generic and CPA specific case for Nicaragua) on UNFCCC’s website (http://cdm.unfccc.int/ProgrammeOfActivities/Validation/DB/RGYSWPL82UWLZC4S5YGQS5BHIPSUFE/view.html) on 2011-12-28 and invited comments within the period from 2011-12-28 to 2012-01-26 by Parties, stakeholders and non-governmental organisations. No comments were received. Local Two Stakeholder Consultations were conducted in Nicaragua. A general stakeholder consultation process took place in Managua, Nicaragua on 2012-01-26 with the purpose of gathering comments from various stakeholders ranging from government and private institutions to individuals. The GLC validation team reviewed and verified the evidences provided by the PP /25/ and confirms that relevant stakeholders were invited and that comments were duly addressed durint the meeting. A local stakeholder consultation was held on 2011-12-13 in the city of Rivas, Nicaragua, with local government representatives, neighboring inhabitants to the project site and NGO representatives whose views represent the views of the nearby residents. Evidences of the invitations sent, attendance list and minutes of the consultation were provided to the GLC validation team and deemed correct /41/.




A summary of the comments received during the local stakeholder consultation has been included in the CPA-DD and this has been cross-checked with the documentation /41/, and interviews with government representatives from the city of Rivas. The information is considered complete and the validation team confirms that the comments presented by the local stakeholders have been duly addressed by the PPs. The CME and the PP plan to dedicate a percentage of the income obtained from the sale of CERs generated during the project’s lifetime to community programs. Although this percentage has not been defined yet, the validation team confirmed through joint interviews with authorities of the Municipality of Rivas, the CME and the PP that there is a high degree of communication between the parties and existing verbal agreements between the PP and the local government for investing in social programs. Based on the information gathered through these interviews during the on-site visit, in particular the assertions from the vice-mayor of Rivas Ms. Esperanza Nuñez Tenorio, the GLC validation team can confirm that the CME and the PP are committed to contributing a portion of the CER revenue in favor of programs or projects that will benefit the local population, which are to be identified and agreed upon with the local government. GLC can therefore confirm that the correct means was used to invite input from stakeholders and that the right stakeholders attended the meetings and finally GLC confirms that local stakeholders’ concerns have been considered in the final design of the project according to Validation and Verification Manual, paragraph 129 (a, b & c)/6/.

4.10 CPA Crediting Period

PPs have selected a 7 year renewable renewable crediting period for this CPA starting on 2013-01-18 or the date of inclusion, whichever is later. The information has been described correctly in section A.4.3 of the CPA-DD. It has also been confirmed that the end date of the CPA crediting period will not exceed the duration of the PoA.

4.11 Environmental Impacts Analysis (EIA)

Environmental Impacts Analysis for the PoA under which this CPA will be included will be conducted at CPA level and validated during inclusion. According to national regulations and PoA description, the Ministry of Environmental and Natural Resources of Nicaragua (Ministerio del Ambiente y los Recursos Naturales, MARENA) does not require an EIA for this first CPA - Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1. Instead, according to national regulations (Environmental Evaluation System Decree No. 76-2006) the project has to develop an “Environmental Evaluation”, which was submitted and approved as confirmed by the validation team through interviews with Mr. Mario Rodriguez, the local MARENA representative for the City of Rivas in Nicaragua. The Environmental Permit for the project within the La Fe Farm was granted through Administrative Resolution No. 008-09 and Administrative Resolution No. 008-09A (extension) /37/. In addition, the PPs have also conducted an EIA “Environmental Impact Assessment for the wind project Alba Rivas”, which includes an an Environmental Management Program with mitigation measures for potential issues such as noise and impact on local fauna. Hence the PPs followed the requirements of the host country regarding the environmental impacts.




5 VALIDATION OPINION

Germanischer Lloyd Certification GmbH has performed a validation of Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1. The validation was performed on the basis of UNFCCC criteria and host country criteria, as well as criteria given to provide consistent project operations, monitoring and reporting. The review of the project design documentation and the subsequent follow-up interviews have provided Germanischer Lloyd Certification GmbH with sufficient evidence to determine the fulfilment of stated criteria. In our opinion, the project meets all relevant UNFCCC requirements for the CDM and all relevant host country criteria. The project is therefore recommended by Germanischer Lloyd Certification GmbH for registration. The project applies ACM0002 version 12.3.0. The methodology has been correctly applied and the assumptions made for the selected baseline scenario are sound. By displacing grid electricity partially generated through fossil fuel combustion, the first CPA results in reduction of 107,375 t CO2eq emissions per year that are real, measurable and give long-term benefits to the mitigation of climate change. Given that the project is implemented as designed, the project is likely to achieve the estimated amount of emission reductions. It is sufficiently demonstrated that the project is not a likely baseline scenario and that emission reductions attributable to the project are additional to any that would occur in the absence of the project activity. Given that the CPA would be implemented as described in the CPA-DD, it is likely to achieve the estimated amount of emission reductions of 751,626 t CO2eq over the 1st seven year crediting period, leading to a calculated annual average of 107,375 t CO2eq as indicated in the final CPA-PDD. No relevant negative environmental impacts are expected from the implementation of the CPA. A global and local stakeholder consultation was conducted. In summary, it is GLC’s opinion that Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1 as described in the revised project design document (CPA-DD version 08) meets all relevant UNFCCC requirements for the CDM and all relevant host Party criteria and correctly applies ACM0002 version 12.3.0. Hence, GLC requests the inclusion of the Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1 as a CPA under the Tepeu Wind Programme of Activities. Hamburg, 2013-03-21

Markus Weber




6 REFERENCES

The following table outlines the documentation reviewed during the validation:

Ref. No. TITLE of DOCUMENT or EVIDENCE (Author, website link)

/1/

PoA-DD “Tepeu Wind Programme of Activities” version 01, dated 2011-12-07, (uploaded for GSC),: CPA-DD Specific “Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1” version 01, dated 2011-12-07 (uploaded for GSC), CPA-DD Generic “[name] Wind Power Plant – Tepeu PoA CPA #[number]” (uploaded for GSC) Files uploaded for GSC were made available at: http://cdm.unfccc.int/ProgrammeOfActivities/Validation/DB/RGYSWPL82UWLZC4S5YGQS5BHIPSUFE/view.html PoA-DD “Tepeu Wind Programme of Activities” version 09, final version, dated 2013-03-08 CPA-DD Specific “Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1” version 09, final version, dated 2013-03-08 CPA-DD Generic “[name] Wind Power Plant – Tepeu PoA CPA #[number]” , final version

/2/

ACM0002 “Consolidated baseline methodology for grid-connected electricity generation from renewable sources” Version 12.3.0 (EB 66, Annex 35) http://cdm.unfccc.int/methodologies/DB/UB3431UT9I5KN2MUL2FGZXZ6CV71LT/view.html

/3/

Clarification Regarding the Procedures for Registration of a PoA as a single CDM Project Activity and Issuance of CERs for a PoA, version 01. (EB 60, Annex 26) http://cdm.unfccc.int/Reference/Guidclarif/PoA/poa_guid06.pdf

/4/

“Tool for the demonstration and assessment of additionality” (version 06.0.0) http://cdm.unfccc.int/methodologies/PAmethodologies/tools/am-tool-01-v6.0.0.pdf

/5/

“Combined tool to identify the baseline scenario and demonstrate additionality” (version 4.0.0)

/6/

“Clean Development Mechanism Verification and Validation Manual” (version 01.2) http://cdm.unfccc.int/UserManagement/FileStorage/18Y54N6CWUV2LOESXQP3RMBAID9FHK

/7/

“Tepeu Wind Programme of Activities” – Coordinating/Managing Entity Operational Manual

/8/

Evidence – CME relevant experience CV EcoRessources - Resume.pdf CV Adolfo Mejia.pdf CV Isabel Malaga.pdf CV Luis Salgado.pdf

/9/

“Tool to calculate the emission factor for an electricity system” (version 02.2.1) http://cdm.unfccc.int/methodologies/PAmethodologies/tools/am-tool-07-v2.2.1.pdf

/10/

Nicaraguan Electricity Institute (INE) www.ine.gob.ni/

/11/

Committee for the Interconected Electricity System’s Economic Operation – Peru www.coes.org.pe/

/12/

“Guidelines on assessment of de-bundling for SSC project activities” (version 02) http://cdm.unfccc.int/EB/047/eb47_repan32.pdf

/13/

Emission factor for the electricity system in Nicaragua EF nicaragua 2010 v2 09 03 2012.xls




/14/

Emission Reduction Calculation Sheet for Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1 ER CPA Alba Rivas - PoA Tepeu #1 v5 06 09 2012.xls

/15/

Financial Model for Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1 Cash Flow Alba-Rivas v6 08 03 2013.xls

/16/

“Guidelines for the demonstration and assessment of prior consideration of the CDM”. http://cdm.unfccc.int/Reference/Guidclarif/reg/reg_guid04.pdf

/17/

Development Agreeement – Mabanaft Carbon B.V. and ÉcoRessources Carbono S.A.C

/18/

CPA Inclusion Agreement – Mabanaft Carbon B.V. and Alba de Nicaragua SA.

/19/

Cooperation Agreement – Mabanaft Carbon B.V., ÉcoRessources Carbono S.A.C and Alba de Nicaragua SA.

/20/

Guidelines on the demonstration of additionality of small-scale project activities (Version 09) (previously known as Attachment A to Appendix B of the simplified modalities and procedures for small-scale CDM project activities) http://cdm.unfccc.int/Reference/Guidclarif/meth/methSSC_guid05.pdf

/21/

Glossary of CDM Terms (version 7, EB 70 Annex 7) http://cdm.unfccc.int/Reference/Guidclarif/glos_CDM.pdf

/22/

“Guidelines on assessment of debundling for SSC project activities” (version 03) http://cdm.unfccc.int/Reference/Guidclarif/ssc/methSSC_guid17.pdf .

/23/

Supply, Installation, Commissioning and Testing Contract - VESTAS (Contrato de Suministro, Instalación, Puesta en Marcha y Pruebas. Entre ALBA DE NICARAGUA S.A y Vestas Chile Turbinas Eólicas Limitada) Vestas Contract - Supply, transport and installation.pdf

/24/

“Tool to calculate project or leakage CO2 emissions from fossil fuel combustion” (version 02) http://cdm.unfccc.int/methodologies/PAmethodologies/tools/am-tool-03-v2.pdf

/25/

Evidences – General Stakeholder Consultation in Nicaragua General Stakeholder Consultation - PPT.pdf General Stakeholder Consultation - Neswpaper evidence.jpg General Stakeholder Consultation - Neswpaper front page.jpg General Stakeholder Consultation - Participants GLSC Tepeu1.jpg General Stakeholder Consultation - Participants GLSC Tepeu2.jpg General Stakeholder Consultation - invitations.rar

/26/

“Guidelines on the assessment of investment analysis” (version 05) http://cdm.unfccc.int/Reference/Guidclarif/reg/reg_guid03.pdf

/27/

EB 55 Annex 38 Procedure for registration of a programme of activities as a single poject activity version 4.1 http://cdm.unfccc.int/Reference/Procedures/PoA_proc01.pdf

/28/

Final Report (FSR) for Alba-Rivas Wind Project AlbaRivas Report for the Ministry of Energy and Mines in 2010.pdf

/29/

Standardized Financial Model for additionality demonstration of off-shore projects over 15 MW and all on-shore projects - ÉcoRessources Carbono S.A.C Standardized financial analysis spreadsheet_v1_r1.xls

/30/

EXECUTIVE BOARD OF THE CLEAN DEVELOPMENT MECHANISM THIRTIETH MEETING Report http://cdm.unfccc.int/EB/030/eb30rep.pdf

/31/

“Standard for demonstration of additionality, development of eligibility criteria and application of multiple methodologies for programme of activities” ver 02.1 EB 70 Annex 5. Also referred as “PoA Standard” http://cdm.unfccc.int/Reference/Standards/meth/meth_stan04.pdf

/32/

Letter of Approval The Netherlands LoA Annex I - 2012ANL592.pdf




/33/

Confirmation of Letter of Approval – The Netherlands http://www.agentschapnl.nl/en/node/94860

/34/

Letter of Approval Nicaragua LoA Tepeu - Nicaragua.pdf

/35/

Sworn Declaration – No prior participation in CDM or other carbon mechanisms CME - Sworn declaration - carbon mechanism_Albarivas.pdf Sworn Declaration – Start date of the project activity and no external financing ALBANISA - Sworn declaration - start date of the project activity.pdf

/36/ Map and geographic coordinates for the CPA project site Location - Coordinates La Fe Farm.pdf Micro-sitting for the wind turbines designed by Vestas (equipment manufacturer). Dated 2012-01-17 Project location_vestas-ID-0112-V3-R1-Layout1.pdf

/37/ Environmental Authorization for Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1 Administrative Resolution No. 008-09 (Environmental Authorization 13_04_09.pdf) Administrative Resolution No. 008-09A (Renovation of environmental authorization 23_09_11.pdf)

/38/ Sworn Declaration – No Annex I Funding CME - Annex I funding – Albarivas.pdf

/39/ Der Norske Veritas Type Certificate for Wind Turbines DNV Type Certificate.pdf

/40/ Sworn Declaration – Voluntary Participation CME - Sworn declaration - voluntary participation- Albarivas.pdf

/41/ Evidences Local Stakeholder Consultation – Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1 LSC AlbaRivas 1. Invitation Emails.pdf LSC AlbaRivas 2. Press Announcement.pdf LSC AlbaRivas 3. Poster Announcements.pdf LSC AlbaRivas 4. Assistance List.pdf LSC AlbaRivas 5. Presentation of PoA Tepeu.pdf LSC AlbaRivas 6. Presentation of AlbaRivas Project.pdf LSC AlbaRivas 7. Surveys.pdf LSC AlbaRivas 8. Final Report.pdf LSC AlbaRivas 9. Photographs.pdf

/42/ Proyecto Areca – Renewable Energy Market Analysis for Nicaragua http:\www.proyectoareca.org/?cat=1015&title=Estudios&lang=es

/43/ Wind Farm Assessment Report for Albarivas by Vestas, dated 2011-12-28 /44/ ALBANISA - Analysis of Wind Measurements

Project Alba Rivas Analysis of wind potential.pdf /45/ European Wind Energy Association – “Wind Energy – The Facts”

http://www.wind-energy-the-facts.org/documents/download/Chapter1.pdf http://www.wind-energy-the-facts.org/documents/download/Chapter3.pdf

/46/ Supply Turnkey Proposal – VESTAS Vestas Supply Turnkey Proposal.pdf

/47/ Evidences for Pre-Investment Costs: Wind Tower proposal: TDR_parque eolico_especificaciones WTG.pdf Administrative costs / Preliminary Studies / Office Space: Administrative costs_office payments.jpeg Generation license payment (as per regulatory framework – Requisitos Licencia de Generacion.pdf

/48/ Summary of operation and Administrative Expenses O&M Cost_ALBA RIVAS.xls

/49/ Maintenance and Service Proposal – VESTAS Vestas Maintenance and Service Proposal.pdf




/50/ DNVType Certificate for the model Vestas V100-1.8 MW 50/50 Hz VCS Mk 7 DNV Type Certificate.pdf

/51/ “Tool to determine the remaining lifetime of equipment” (version 01) http://cdm.unfccc.int/methodologies/PAmethodologies/tools/am-tool-10-v1.pdf

/52/ Rulebook of Law No. 453 – Fiscal Equity Law (Reglamento de la Ley No. 453, Ley de Equidad Fiscal) Rulebook Law 453.pdf

/53/ Regulation INE - Fee for installed capacity Regulation INE - sentencia caso INE.pdf

/54/ Evidence for Rolling Reserve Norms of Commercial Operation Reserva Rodante.pdf INE – Wholesale electricity market in Nicaragua, spot prices for 2012 http://www.ine.gob.ni/DGE/mercadomayorista/precios_medios/precios_Enero12_ActMar12.pdf

/55/ Evidence on Transmission Toll Noms for Transmission in the Nicaraguan Electric System (Normativa de Transporte del Sistema Eléctrica de Nicaragua): Resolution No. 004-2000.pdf National Trasmission Company of Nicaragua (Empresa Nacional de Trasmision Electrica) http://www.enatrel.gob.ni/index.php?option=com_content&task=view&id=16&Itemid=128

/56/ Vestas Project Construction Planning Schedule_ Project Implementation.pdf

/57/ Monitoring reports for Amayo 40 MW Wind Power Project ‐ Nicaragua (UNFCCC Ref 2315) 1st Monitoring Period (From April 12, 2009 to September 30, 2009) http://cdm.unfccc.int/filestorage/U/M/R/UMR5L6DVFAJZ4TQCE2W97G1YB3PIXO/Amayo%20MR.pdf?t=cHJ8bTJyZGI3fDB3c1uSep4U8sb17PHFKycO 2nd Monitoring Period (From October 1, 2009 to August 31, 2010) http://cdm.unfccc.int/filestorage/5/Z/J/5ZJNAKWIF1TEDC0HMS2R4L7XVOYPB9/Amayo%202%20MP.pdf?t=cUR8bTJyZGJifDDD5fRjZ5sh1zkAMUOgXsA8 3rd Monitoring Period (From September 1, 2010 to April 30, 2011) http://cdm.unfccc.int/filestorage/C/4/S/C4S53HUEKDOW2VG1JY70L9QPMTZ6NF/2315%203%20MR.pdf?t=Mm18bTJyZGJkfDBHnkZ-cE7JHEHcIK19mIza 4th Monitoring Period (From May 1, 2011 to March 31, 2012) http://cdm.unfccc.int/filestorage/L/4/U/L4UIQVW6TKO5YNRAD38XJEF9GPH102/2315%204%20MR.pdf?t=Y3l8bTJyZGJnfDAoxv2sFFPNkS7NfXrfNs_v

/58/ “Methodologies Panel Fiftieth Meeting Report Annex 8, Information Note on Default values for equity return for CDM projects”

/59/ International Monetary Fund - World Economic Outlook Database Inflation values for Nicaragua http://www.imf.org/external/pubs/ft/weo/2012/02/index.htm


Germanischer Lloyd Certification Code: DC-GHG 015_B, Rev.00 Date: 2012-02-24; MN, Cyf, Junw


ANNEX A: VALIDATION QUESTIONNAIRE AND RESOLUTION OF CORRECTIVE ACTION AND CLARIFICATION REQUESTS (FINDINGS’S LIST)




VALIDATION QUESTIONAIRE

CHECKLIST QUESTION / VVM AND POA REQUIREMENTS SOURCE MEANS AND FINDINGS OF VALIDATION (BASED ON GSC VERSION OF THE CPA-DD)

ASSESSMENT

FINAL CON.

Consistency and specific CPA issues A. General Description of small scale CDM project

activity (CPA)

A.1. Title of the CPA A.1.1. Are title, current version number and the

date of document completion given in section A.1 of the real case CPA-DD? Does the CPA title also refer to a unique CPA No., e.g., CPA1-xxx?

EB 33 Annex 44

Yes, the required information of the PoA is listed as follows in section A.1 of the CPA-DD: Title: Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1 Current version number at time of GSC: 1. Date of completion at time of GSC: 07/12/2011. Nevertheless, it is noted that the version number and date of completion may be changed at the time of request for registration submission stage.

OK OK

A.1.2. Has the exact name/title of the PoA been included in the header of the CPA-DD form?

EB 33 Annex 44

Yes, the exact name/title of the PoA been included in the header of the CPA-DD form as ‘Tepeu Wind Programme of Activities’

OK OK

A.1.3. Has the latest version of the CDM-SSC-CPA-DD form been applied?

EB 55 Annex 1 § 55

Yes, the latest version, i.e. version 01 of the CDM-SSC-CPA-DD form been applied. UNFCCC website has been checked http://cdm.unfccc.int/Reference/PDDs_Forms/PoA/index.html and compared with the CPA-DD form.

OK OK

A.2. Description of the CPA A.2.1. Is the description of the CPA consistent

between POA-DD (section A.2 and A.4.2.1) and the generic CPA-DD (section A.2)?

EB 55 Annex 38,

Yes, the description of this CPA is consistent with POA-DD (section A.2 and A.4.2.1) and the generic CPA-DD (section A.2).

OK OK





ASSESSMENT

FINAL CON.

§15(d) A.2.2. Has it been stated in a clear, accurate and

complete manner which technology or measures are to be employed by the CPA?

EB 55 Annex 38 § 6 (f), EB 55 Annex 1 § 58

Yes, the CPA description includes a description of the technology in a clear, accurate and complete manner. As per CPA-DD ‘the project will use 22 wind Vestas turbines model V100 of 1,800 kW for a 39.6 MW of total installed capacity. The turbines are IEC class S Wind Turbines with a hub height of 80 m, nominal frequency of 60 Hz, rotor diameter of 100 m and 34.5 voltages. The model V100 has been evaluated according to IEC requirements for wind turbines, filling into IEC class S for a wind rate speed of 9.9 m/s and an operation wind range of 3 m/s to 20 m/s working with an asynchronous generator’.

OK OK

A.2.3. Is this description in accordance with the real situation or, in case of Greenfield CPAs, is it most likely that the CPA will be implemented acc. to the description?

EB 55 Annex 1, §§63, 64

This CPA is a greenfield but according to the FSR and other available documentation it can be expected that the CPA will be implemented as described in the CPA-DD.

OK OK

A.2.4. In case the CPA involves alteration of the existing installation or process, is a clear description available regarding the differences between the proposed CPA and the pre-project situation?

EB 55 Annex 1, §§63, 64

Not applicable, this CPA in a greenfield and does not involve alteration of the existing installation or process.

OK OK

A.3. Entity/individual responsible for the CPA A.3.1. Does the real case CPA-DD include EB 55 Yes, Section A.3 of the CPA-DD v1 has included the following details OK OK





ASSESSMENT

FINAL CON.

information, e.g., name/contact details of the entity/individual responsible for the operation of the CPA, hence forth referred as CPA implementer(s)?

Please describe this entity/individual responsible for the CPAs and steps taken to verify the information.

Annex 38, §7 (a)

of the entity responsible for the operation of the CPA. Entity: Alba de Nicaragua S.A - ALBANISA. Contact person: Eng. Modesto E. Rojas R., Department: Renewable Energy Email: [email protected].

A.3.2. In case the CPA implementers are also project participants of the PoA, are their names included in the PoA?

The operators of individual CPAs are not required to be project participants. CDM programme participation is only recorded at the PoA level.

EB 55 Annex 38, §8

No, the CPA implementer is not the project participants of the PoA, hence its name is not included in section A.3 and Annex 1 of the PoA-DD.

OK OK

A.3.3. Has contact information on entity/ individual responsible for the CPA been sufficiently and appropriately included in Annex 1 of the CPA-DD and consistent with section A.3 of the same?

Each organisation listed in section A.3 shall include the following mandatory fields: Organization, Name of contact person, Street, City, Postfix/ZIP, Country, Telephone and Fax or e-mail.

EB 55 Annex 1, § 52

No, Annex 1 of the CPA-DD does not provide sufficient information regarding CPA implementer. Hence, CPA-CAR 1 is raised.

CPA-CAR 1

OK

A.4. Technical description of the CPA A.4.1. Identification of the CPA A.4.1.1. Host Party A.4.1.1.1. Are all host parties included in the real

case CPA-DD consistent with section A.4.1.1 of the PoA-DD?

EB 55 Annex

38, §7 (b)

Yes, the host party of this CPA is Nicaragua, which is consistent with section A.4.1.1 of the PoA-DD.

OK OK

A.4.1.2. Geographic reference or other means of





ASSESSMENT

FINAL CON.

identification allowing the unique identification of the CPA

A.4.1.2.1. Does the real case CPA-DD include correct geographical reference or other means of unique identification of a CPA? In case of GPS Coordinates, Decimal Degree formats should be given, e.g., Latitude: 31.125833, Longitude: -30.125833.

In case of stationary CPA, geographic reference should be used; in case of mobile CPAs, registration number, GPS devices, etc. should be used.

EB 55 Annex 38, §7(a)

No, section A.4.1 of the CPA-DD v1 has included unique identification of the CPA by giving the coordinates for an area encompassing the project site, however the points of this rectangular area extend beyond the exact project area. The following points were given:

Reference

Point

UTM

Coordinates

UTM

Coordinates

1 0630989 1259973

2 0632551 1259019

3 0631929 1256128

4 0629534 1257297

A more precise geographical reference is required. Furthermore, the coordinates must be provided in decimal format. Hence CPA-CAR2 is raised.

CPA-CAR 2

OK

A.4.1.2.2. Has it been demonstrated that the CPA is within the geographical borders of the PoA?

EB 55 Annex

38, §7(a)

Yes, the validation team has confirmed that the CPA is within the geographical borders of Nicaragua.

OK OK

A.4.2. Duration of CPA A.4.2.1. Starting date of the CPA





ASSESSMENT

FINAL CON.

A.4.2.1.1. Does the real case CPA-DD include provisions that the start date can be clearly defined and evidenced?

Apply the definition as per the “Glossary of CDM terms”.

EB 55 Annex1, §99

Section A.4.2.1 of the CPA-DD v1 states that the CPA start date is 15/01/2012; The start date should be substantiated with evidences as per Glossary of CDM terms. Hence, CPA-CAR 13 is raised.

CPA-CAR 13

OK

A.4.2.1.2. Does the real case CPA-DD include a confirmation that the start date of any CPA is not prior to the PoA validation commencement, i.e. the date on which the CDM-POA-DD is first published for global stakeholder consultation?

Otherwise please refer to EB47 Report Para72

EB 55 Annex 38 §7(d);

EB47 Report Para72

Yes, this CPA start date is defined after the PoA GSC date 2011-12-28. This date will be confirmed by the validation team during onsite visit.

OK OK

A.4.2.2. Expected operational lifetime of the CPA

A.4.2.2.1. Does the the CPA include provisions to ensure that the operational lifetime can be clearly defined and evidenced?

Check whether the project lifetime can be clearly defined. Consider the guidance on the assessment of investment analysis (annex to the additionality tool). Check in case of phased implementation this has been reflected throughout the whole PDD incl. the financial assessment, if applicable.

EB55 Annex 38 para7(d)

Yes, the life time of the CPA is defined as 20 years, which is evidenced by a third party certificate: DNV (2004). Type Certificate for the model Vestas V100-1.8 MW 50/50 Hz VCS Mk 7, p. 2. This operational lifetime is also in line with EB 50 Annex 15, which states that the expected technical lifetime for onshore wind turbines is 25 years.

OK OK

A.4.3. Choice of the crediting period





ASSESSMENT

FINAL CON.

A.4.3.1. Starting date of the crediting period A.4.3.1.1. Does the real case CPA-DD address the

appropriate starting date of the crediting period of the CPA in DD/MM/YYY format?

The starting date of a crediting period of the CPA shall be the date of its inclusion in the registered PoA or any date thereafter.

EB 55 Annex 38, §7(c)

Yes, the starting date of the crediting period of this CPA is addressed in section A.4.3.1 of the CPA-DD as ‘The latter between the PoA registration date and the commissioning date (18/01/2013)’.

OK OK

A.4.3.2. Length of the crediting period A.4.3.2.1. Does the real case CPA-DD include the

option to choose the type (fixed or renewable) and duration of the crediting period of the CPA?

Taking into account that the duration of the crediting period shall not exceed the end date of the PoA.

EB 55 Annex 38, §7(c)

Yes, the CPA chooses a renewable crediting period of 7 years. This CPA crediting period starting date is expected to be the same or after the PoA start date. Taking into consideration the 28-year duration of the PoA, the entire duration of the CPA crediting period will not exceed the end date of the PoA.

OK OK

A.4.4. Estimated ER over the chosen crediting period

A.4.4.1. Does the real case CPA-DD include the estimated amount of emission reductions over the chosen crediting period (1st CP if renewable) of the CPA?

EB 55 Annex 38, §7

Yes, the estimated emission reductions of the 1st CPA has been included in section A.4.4 of the CPA-DD v1 as follows:

Years Annual estimation of emission

reductions in tonnes of CO2e

2013 109,533 2014 109,533 2015 109,533 2016 109,533 2017 109,533

OK OK





ASSESSMENT

FINAL CON.

2018 109,533

2019 109,533

Total Estimated Reductions (t CO2e)

766,731

Total number of crediting years

7

Annual average of estimated reductions over the crediting

period (t CO2e)

109,533

A.4.5. Public Funding of the CPA A.4.5.1. Does the real case CPA-DD include

information regarding public funding of the CPA, and consistent with section A.4.5 of the PoA-DD?

In the real case CPA-DD, a table template without exact ER amount shall be included, nonetheless, fixed information throughout the entire PoA duration/.CPA crediting period can be also included.

EB 55 Annex 38, §6(n))

Yes, according to section A.4.5 of the CPA-DD ‘The CPA does not receive or will not receive any public funding. Therefore there is not diversion of official development assistances.’ The validation team has confirmed that this statement is consistent with section A.4.5 of the PoA-DD.

OK OK

A.4.5.2. Has any important Public Funding information been included in Annex 2 of the CPA-DD and consistent with section A.4.5 of the CPA-DD?

Assess information from Parties included in Annex I on sources of public funding for the project activity which shall provide an affirmation that such

EB 55 Annex

38, §6(n)

No, there is no other important public funding information included in Annex 2 of the CPA-DD rather than the same as in section A.4.5 of the CPA-DD. It has also been confirmed there is no ODA used for this CPA.

OK OK





ASSESSMENT

FINAL CON.

funding does not result in a diversion of official development assistance and is separate from and is not counted towards the financial obligations of those Parties. A.4.6. Confirmation that CPA is neither

registered as an individual CDM or is part of another Registered PoA

A.4.6.1. Does the real case CPA-DD include provisions for a confirmation that the CPA is neither registered as a CDM project activity nor included in another registered PoA?

Make sure that each single subsystem of the CPA, e.g., solar cooker, bio-digester, etc. is not registered as part of a CDM project or included in another registered PoA. Make sure that no double counting of any emission reductions will occur.

EB 55 Annex 38, §7(h)

Yes, section A.4.7 of the CPA-DD has included justification according to section A.4.4.1 of the PoA-DD regarding the CPA is neither registered as a CDM project activity nor included in another registered PoA. The following statement is provided ’ The CME of the PoA has checked and confirms that the CPA “Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1” is not registered as an individual CDM project activity nor is it a part of another registered PoA.’ The validation team has confirmed this through review of the registered CDM projects and existing registered PoAs at the time of validation.

OK OK

A.4.6.2. Has it been confirmed that those operating the CPA are aware and have agreed that their activity is being subscribed to the PoA, as per provisions indicated in the PoA-DD?

Please indicate the means and/or documents reviewed by the validation team.

EB 55 Annex 38, §6(i)

This has been confirmed during onsite visit by the validation team through interviews with the CPA implementer.

OK OK

B. Eligibility of CPA and estimation of ERs B.1. Title and reference of the Registered PoA to

which CPA is added





ASSESSMENT

FINAL CON.

B.1.1. Has the exact name/title, version No. and date of the final PoA-DD been consistently included in section B.1 of the real case CPA-DD form?

Please ensure that the latest version number and date of the PoA-DD that is to be submitted for request for registration has been consistently included/updated in the real case CPA-DD.

Yes, section B.1 of the real case CPA provides the exact title of the PoA-DD “Tepeu Wind Programme of Activities”. However, the latest version number and date of completion of the final PoA-DD submitted for registration needs to be updated accordingly on the CPA-DD Hence, CPA-CAR 3 is raised

CPA-DD CAR 3

OK

B.2. Justification of why CPA is eligible to be included in the Registered PoA

B.2.1. Has the real case CPA-DD included justifications with evidences on how each CPA will fulfill the eligibility criteria specified in section A.4.2.2 of the POA-DD?

Complete assessments on CPA compliance with the Inclustion Eligibility Criteria are included in Table 3.

EB 55 Annex 38, §7(e)

No, section B.2 of the CPA-DD v1 has not clearly provided justification and corresponding supporting evidences on the CPA’s compliance towards the eligibility criteria specified in section A.4.2.2 of the PoA-DD. A detailed assessment of each eligibility criterion is provided below in Table 3. Hence, CPA-CAR 4 is raised.

CPA-CAR 4

OK

B.3. Assessment and demonstration of additionality of the CPA, as per eligibility criteria listed in the Registered PoA

B.3.1. Does the real case CPA-DD include information how each CPA will demonstrate additionality as specified in section E.5 of the POA-DD?

Including, as appropriate, the demonstration of the additionality of the CPA.

EB 55 Annex

38, §7(e)

Yes, section B.3 of the CPA-DD has included information on justification of CPA additionality as per section E.5 of the PoA-DD. This section also correctly references the “Tool for the demonstration and assessment of additionality” (version 06.0.0).

CPA-CAR 5 CPA-

CAR 11 CPA-CAR 9

OK





ASSESSMENT

FINAL CON.

Step 1: Identification of alternatives to the project activity consistent with current laws and regulations Sub-step 1a: Define alternatives to the project activity No baseline scenario was identified. PP is requested to define alternatives to the project activity. Sub-step 1b: Consistency with mandatory laws and regulations No baseline scenario was identified. PP is requested to define alternatives to the project activity. Hence, CPA-CAR 5 is raised. Step 2: Investment analysis Sub-step 2a: Determine appropriate analysis method The determination of an appropriate analysis method is sufficiently justified. The PP has selected the benchmark analysis as the most appropriate analysis method. As per the ‘Guidelines on the assessment of investment analysis’ this method is applicable to ‘cases where the choice of the developer is to invest or not to invest’ such as the case of a privately owned power plant. This is consistent with the approach selected in section E:5 of the PoA-DD. Sub-step 2b: Option III. Apply benchmark analysis Clarification is requested on the benchmark IRR as follows





ASSESSMENT

FINAL CON.

Clarification is requested on the use of total risk premium versus country risk premium. Mr. Damodaran states that the country risk premium for Nicaragua (as obtained from Moody’s rating agency) is 9% while the total risk premium used in determining the compounded benchmark rate is 14%. While the Tool for the demonstration and assessment of additionality indicates that benchmarks can be derived from ‘Government bond rates, increased by a suitable risk premium to reflect private investment and/or the project type, as substantiated by an independent (financial) expert or documented by official publicly available financial data’, the PP is requested to sufficiently justify that the use of a total risk premium as determined by Mr. Damodaran for Nicaragua is conservative. Clarification is requested on the procedure applied to calculate the country risk premium from the difference between the 7-year maturity bonds. Also, the PP is required to demonstrate that the linear interpolation used to estimate the Nicaraguan interest rate for a 20-year maturity bond is a valid and conservative approach. PP is required to provide relevant all references and documentation related to this calculation. Sub-step 2c: Calculation and comparison of financial indicators: As a result of the documentation reviewed during on-site visit, PP is





ASSESSMENT

FINAL CON.

requested to provide an updated IRR calculation along with supporting references for the values utilized. Hence, CPA-CAR 11 is raised Sub-step 2d: Sensitivity analysis No issues were found Step 3: Barrier analysis Not applied. Step 4. Common Practice Analysis As checked by the validation team during onsite visit, Analysis of Common Practice is not up to date. Hence, CPA-CAR 9 is raised. Clarify common practice procedure: Scale: A range of ±50% of the CPA’s installed capacity will be considered.

B.4. Description of the sources and gases included in the project boundary and proof that the CPA is located within the geographical boundary of the





ASSESSMENT

FINAL CON.

PoA B.4.1. Does the real case CPA-DD include information

regarding sources and gases included in the CPA boundary and proof that the spatial and technological boundaries of the CPA will be located within the geographical boundary of the PoA?

EB 55 Annex

38, §7(a)

Yes, section B.4 of the CPA-DD includes information regarding sources and gases included in the CPA boundary as per ACM0002 ver 12.3.0. The following GHG emissions are identified:

Source Gas Included? Justification / Explanation

CO2 Yes Main emission source

CH4 No Minor emission source

Baseline

CO2 emissions from electricity generation in fossil fuel fired power plants that are displaced due to the project activity

N2O No Minor emission source

CO2 No

Minor emission source. As a zero emission grid connected wind power project no emissions will result.

CH4 No

As a zero emission grid connected wind power project no emissions will result

Project Activities

Wind energy projects under the PoA

N2O No

As a zero emission grid connected wind power project no emissions will result.

OK OK





ASSESSMENT

FINAL CON.

spatial extend of the project boundary (national grid) is correctly considered within the geographical boundary of the CPA (country of Nicaragua).

B.4.2. Has any important Baseline information necessary to be included in Annex 3 of the CPA-DD and consistent with section E.4 of the PoA-DD?

Assess any further background information used in the application of the baseline methodology. This may include tables with time series data, documentation of measurement results and data sources, etc.

EB 55 Annex 1, §§ 67 (b), 82, §§ 104 – 106

No baseline information is provided in Annex 3 of the CPA-DD. OK OK

B.5. Emission reductions B.5.1. Data and parameters that are available at

validation

B.5.1.1. Are all data and parameters in section B.5.1 of the real case CPA-DD consistent with section E.6.3 of the POA-DD?

EB 55 Annex 38,

§15(d)

Yes, section B.5.1. of the CPA-DD is consistent with section E.6.3 of the PoA-DD as per GSC versions. Section B.5.1 lists the data and parameters relevant to a CPA in Nicaragua.

OK OK

B.5.2. Ex-ante calculation of emission reductions B.5.2.1. Are CPA-specific conservative assumptions used

and uncertainties addressed when calculating the baseline emissions, project emissions and leakage emissions?

EB55 Annex38 § 6(g) & 7(e(ii))

No CPA-specific conservative assumptions were used, however the ex-ante calculation of baseline emissions, project emissions and leakage emissions was generally done in accordance with ACM0002 version 12.3.0. PROJECT EMISSIONS (PEy)

CPA-CAR 8

OK





ASSESSMENT

FINAL CON.

ACM0002 indicates that for most renewable power generation project activities, PEy = 0. This is consistent with section E.6.2 of the PoA-DD. PEy is considered zero since the real case CPA will not involve fossil fuel combustion, release of non-condensable gases or methane emissions from water reservoirs. This is considered a credible and conservative assumption in light of the technology (wind turbines) to be employed by the real case CPA. BASELINE EMISSIONS (BEy) The validation team confirmed that section B.5.2 of the CPA-DD includes a procedure for estimating baseline emissions which is based on ACM0002 ver. 12.3.0 and is consistent with section E.6.2 of the PoA-DD. Baseline emissions correspond to the CO2 emissions from grid electricity that is displaced as a result of the project activity. The procedure for estimating BEy is as follows: BEy : Baseline emissions in year y (tCO2/yr). EGPJ,y : Quantity of net electricity generation that is produced and fed into the grid as a result of the implementation of the CDM project activity in year y (MWh/yr) . EFgrid,CM, y: Combined margin CO2 emission factor for grid connected power generation in year y calculated using the “Tool to





ASSESSMENT

FINAL CON.

calculate the emission factor for an electricity system” (tCO2/MWh). A. DETERMINATION OF EGPJ,Y References are required for net electricity generation indicated in Table 9. Hence CPA-CAR 8 is raised. LEAKAGE (Ly) As per the methodology, no leakage is to be considered.

B.5.2.2. Are all information in section B.5.2 of the real case CPA-DD consistent with section E.6.2 of the POA-DD?

EB 55 Annex 38,

§15(d)

Yes, the validation team has confirmed that section B.5.2 is consistent with section E.6.2 of the PoA-DD.

OK OK

B.5.3. Summary of the ex-ante estimation of emission reductions

B.5.3.1. Does the real case CPA-DD include a table of summary on the estimated amount of emission reductions over the chosen crediting period, incl. annual and total, of the CPA?

EB 55 Annex 38, §7

Yes, section B.5.3 of the CPA-DD provides a table as per CPA-DD template with the summary of the expected ERs over the 7 year crediting period, including annual and total ER volumes for the real case CPA.

OK OK

B.5.3.2. Is an unprotected Excel file with a detailed emission reduction calculation in a reproducible format (i.e. indicating the formulae applied and

EB55 Annex 1 §91

Yes, an electronic spreadsheet was provided to the validation team including the formulae and values applied in the calculation of the ERs.

OK OK





ASSESSMENT

FINAL CON.

properly linked) provided to the DOE? B.6. Application of the monitoring methodology

and description of monitoring plan

B.6.1. Description of monitoring plan B.6.1.1. Are all monitoring parameters and relevant

information in section B.6.1 of the real case CPA-DD consistent with section E.7.1 of the POA-DD?

EB 55 Annex 38,

§15(d)

Yes, all parameters required for the CPA in Nicaragua are included in Section B.6.1 of the CPA-DD consistently with section E.7.1 of the PoA-DD.

OK OK

B.6.1.2. Is the monitoring plan described in the section B.6.1 of the real casec CPA-DD in accordance to the approved methodology as well as section A.4.4.2 and E.7.2 of the PoA-DD?

EB55 Annex38 § 6(g) & 7(e(ii)

Yes, the monitoring plan in section B.6.1 of the CPA-DD is in accordance to the selected methodology ACM0002 version 12.3.0 and sections A.4.2 and E.7.2 of the PoA-DD. However, Annex 4 of CPA-DD does not include any Monitoring information and contains the following incorrect statement ‘Monitoring information is included under chapter B.7.2.’ Hence, CPA-CAR 6 is raised

CPA-CAR 6

OK

B.6.1.3. Has any important Monitoring information necessary to be included in Annex 4 of the CPA-DD and consistent with section B.6 of the CPA-DD?

Assess any further background information used in the application of the monitoring methodology. This may include tables with time series data, additional documentation of measurement equipment, procedures, etc.

EB 55 Annex 38, §6(j); EB 55 Annex 1 123 (b), 124

No, Annex 4 of CPA-DD does not include any Monitoring information. However, Annex 4 contains the following statement ‘Monitoring information is included under chapter B.7.2.’. The PP is requested to correct this statement. Hence, CPA-CAR 6 is raised

CPA-CAR 6

OK





ASSESSMENT

FINAL CON.

C. Environmental Analysis C.1. Level of environmental analysis justification C.1.1. Has the real case CPA-DD consistently

justified the level of environmental analysis as per section C.1 of the PoA-DD?

EB 55 Annex 37, §7(f)

Section C.1 of the CPA-DD has been left blank indicating that the environmental analysis will be undertaken at CPA level, as consistently indicated in Section C.1 of the PoA-DD.

OK OK

C.2. Documentation on the analysis of the environmental impacts, incl. transboundary impacts

C.2.1. Has the real case CPA-DD provided information regarding environmental analysis consistently with section C.2 of the PoA-DD?

EB 55 Annex 37, §7(f)

Yes, this was confirmed during onsite visit by the validation team. Documentation on environmental analysis reviewed included: “Environmental Impact Assessment for the wind project Alba Rivas” / Alba Rivas report for the Ministry of Energy and Mines (2010) Environmental Management Program Administrative resolution No 008-09 Administrative resolution No 008-09A

OK OK

C.3. Environmental Impact Assessment requirement for a typical CPA

C.3.1. Has the real case CPA-DD provided information regarding EIA consistently with section C.3 of the PoA-DD?

EB 55 Annex 37, §7(f)

Yes, section C.3 of the CPA-DD states that the national environmental legislation requires an “Environmental Evaluation” whereas the PP has conducted a full EIA to identify all potential

OK OK





ASSESSMENT

FINAL CON.

impacts due to the project activity. The validation team has reviewed the applicable legislation and found that the project type only required the “Environmental Evaluation”. Further evidences were cross-checked by the validation team during site visit.

D. Stakeholders’ comments D.1. Level of local stakeholder comments

justification

D.1.1. Has the real case CPA-DD consistently justfied the level on which comments by local stakeholders shall be invited as per section D.1 of the PoA-DD?

It is assessed whether stakeholders have been properly consulted in the development of the CPA. EB48 Annex29Para4(m)

EB 55 Annex

38, §7(g)

Section D.1 of the CPA-DD has been left blank indicating that the local stakeholder comments will be invited at CPA level, as consistently indicated in Section D.1 of the PoA-DD.

OK OK

D.2. Description how comments by local stakeholders have been invited and compiled

D.2.1. Has the real case CPA-DD provided information regarding how comments by local stakeholders have been invited before the GSC of the PoA or CPA submission to DOE for inclusion, and is it consistent with section D.2 of the PoA-DD?

EB 55 Annex 37, §7(f)

Yes, the local stakeholder consultation has been conducted at the CPA level via a meeting held in the City of Rivas on 2011-12-13, which is before the GSC of the PoA. The stakeholders were invited by email, through poster announcements and newspaper advertisements on the local newspaper “El Nuevo Diario”. Section D.2 states that 25 people participated in the meeting.

OK OK





ASSESSMENT

FINAL CON.

This was confirmed by the validation team during onsite visit.

D.3. Summary of the comments received D.3.1. Has section D.3 of the real case CPA-DD

sufficiently provided information regarding summary of comments received from local stakeholders?

EB 55 Annex 37, §7(f)

Yes, the summary in section D.3 of the CPA-DD reports the comments received from the local stakeholders during the meeting.

OK OK

D.4. Report on how due account was taken of any comments received.

D.4.1. Has section D.4 of the real case CPA-DD sufficiently provided information regarding how due account was taken of any comments received?

EB 55 Annex 37, §7(f)

No, section D.4 does not provide sufficient information on how due account was taken of the comments received. Hence, CPA-CAR 7 is raised

CPA-CAR 7

OK




TABLE 2 RESOLUTION OF CORRECTIVE ACTION REQUESTS (CAR), CLARIFICATION REQUESTS (CL/CR) AND FORWARD ACTION REQUESTS (FAR)


Project Participants Response

GLC Assessment

Final Concl.

CPA-CAR 1 (16/01/2012): Annex 1 of the CPA-DD does not provide sufficient information regarding CPA implementer.

09/03/2012 (1st round): The new version of the CPA-DD of Alba Rivas has modified Annex 1 content in order to change the contact person and complete the entire table.

19/03/2012 (1st round): Ok, information in Annex 1 of revised CPA-DD version 02 is deemed complete. Hence, CPA-CAR 1 is closed.

OK

CPA-CAR 2 (16/01/2012): Section A.4.1 of the CPA-DD has included unique identification of the CPA by giving the coordinates for an area encompassing the project site, however the points of this rectangular area extend beyond the exact project area, which is deemed as not precise geographical reference. Furthermore, the coordinates are not provided in decimal format. PP is requested to update the maps according to actual turbine distribution (micro-siting) over area to be leased. In addition, a thorough explanation on the status of land ownership/leasing

09/03/2012 (1st round): The first polygonal of the project had the coordinates listed in the CPA-DD of Alba Rivas, but new micro-sitting proposals of the turbine manufacturer required more land. At the moment the entire La Fe farm is used. The new version of the CPA-DD has updated the polygon coordinates and now considers the latest micro-sitting information. vestas-ID-0112-V3-R1-Layout1.pdf The land where the project will be implemented is property of Albalinisa S.A. The project developer will rent the land from Albalinisa but no formal contract has been signed yet. The project owner has shown to the audit team a formal rent contract for land close to the project

19/03/2012 (1st round): The PP is requested to clarify whether the coordinates of the area have been formally defined with the turbine manufacturer or the entity that will lease the land and if other relevant reference points are available to provide a unique geographic identification for the project. Hence, CPA-CAR 2 is still open

OK






GLC Assessment

Final Concl.

location and for wind purposes. This contract is confidential but has been available for the audit team.

and supporting references has not been provided.

20/04/2012 (2nd round): The micro sitting is not final and then the coordinates of the latest polygonal that defines the project activity area (the complete La Fe farm) is now listed in the new version of the CPA-DD. Location - Coordinates La Fe Farm (PDF) Some of the coordinates of the polygonal of the farm are already mentioned in Ref Doc 18 - AlbaRivas Report for Ministry of Energy and Mines 2010, page19 since the project has always been assessed in La Fe farm.

10/05/2012 (2nd round): Ok. The coordinates provided in the revised CPA-DD version 3 for the first real case CPA allow for the unique geographic identification of the project activity area (La Fe farm). The coordinates refer to 10 reference points that encompass the boundary of La Fe farm. Hence, CPA-CAR 2 is closed.

CPA-CAR 3 (16/01/2012): Section B.1 of the real case CPA provides the exact title of the PoA-DD “Tepeu Wind Programme of Activities”. However, the latest version number and date of completion of the final PoA-DD submitted for registration has not been updated accordingly on the CPA-DD

09/03/2012 (1st round): The new version of the CPA-DD has updated section B.1 with the latest version and date of completion of the PoA-DD.

19/03/2012 (1st round): Ok, section B.1 in CPA-DD version 02 was correctly revised. Hence, CPA-CAR 3 is closed.

OK






GLC Assessment

Final Concl.

09/03/2012 (1st round): The list of eligibility criteria has been updated according to new version of PoA-DD. The analysis has been detailed and the additional supporting evidence is: Eligibility criteria 5: CME - Sworn declaration - carbon mechanism_Albarivas (PDF). – signed version pending Eligibility criteria 6: CME - Master Registry List - template v1 (DOC) Tepeu Report v1_February 2012 v1 (XLS) Eligibility criteria 7: CME - Sworn declaration - start date of the project activity-Albarivas (PDF) – signed version pending Eligibility criteria 12: CME - Annex I funding – Albarivas (PDF). Eligibility criteria 14: CME - Sworn declaration - voluntary participation- Albarivas (PDF). – signed version pending

19/03/2012 (1st round): The following referenced documentation has not been provided to the validation team: CME - Annex I funding – Albarivas (PDF). CME - Sworn declaration - voluntary participation- Albarivas (PDF) CME - Sworn declaration - start date of the project activity-Albarivas Tepeu Report v1_February 2012 v1 (xls) CME - Sworn declaration - carbon mechanism_Albarivas (PDF) Hence, CPA-CAR 4 is still open.

CPA-CAR 4 (16/01/2012): Section B.2 of the CPA-DD has not clearly provided justification and corresponding supporting evidences on the CPA’s compliance towards the eligibility criteria specified in section A.4.2.2 of the PoA-DD.

20/04/2012 (2nd round): The sworn declarations have been signed by the project developer and are now submitted to the audit team.

10/05/2012 (2nd round): Ok. The referenced documentation has been received and reviewed by the validation team.

OK






GLC Assessment

Final Concl.

CME - Annex I funding – Albarivas (PDF). CME - Sworn declaration - voluntary participation- Albarivas (PDF) CME - Sworn declaration - start date of the project activity-Albarivas CME - Sworn declaration - carbon mechanism_Albarivas (PDF) The document Tepeu Report v1_February 2012 v1 (xls) was previously submitted with the name “CME - Tepeu Report v1” (XLS). The document is submitted again to the audit team.

Hence, CPA-CAR 4 is closed.






GLC Assessment

Final Concl.

CPA-CAR 5 (16/01/2012): In section B.3 of CPA-DD, ‘Sub-step 1a: Define alternatives to the project activity’, no baseline scenario was identified. PP has not defined alternatives to the project activity as per ACM0002 ver 12.3.0.

09/03/2012 (1st round): According to the VVM 01.2 and VVS version 02.0 where the baseline scenario is prescribed in the approved methodology, no further analysis is required. Since the ACM0002 “Consolidated baseline methodology for grid-connected electricity generation from renewable sources” (version 12.3.0) determines the baseline scenario for new power plants, sub-step 1a clearly states the baseline scenario in the new version of the CPA-DD.

19/03/2012 (1st round): Ok, sub-step 1a in Section B.3 of revised CPA-DD version 02 includes a description of the baseline scenario as per ACM0002 version 12.3.0. Hence, CPA-CAR 5 is closed.

OK

CPA-CAR 6 (16/01/2012): Annex 4 of CPA-DD does not include any Monitoring information. However, Annex 4 contains the following incorrect statement ‘Monitoring information is included under chapter B.7.2.’

09/03/2012 (1st round): All the monitoring information is set in section B.6.1 of the CPA-DD. The reference in Annex 4 has been updated in the new version of the document.

19/03/2012 (1st round): Ok, Annex 4 in CPA-DD version 02 has been corrected. Hence, CPA-CAR 6 is closed.

OK

CPA-CAR 7 (16/01/2012): Section D.4 does not provide sufficient information on how due account was taken of the comments received during the local stakeholder consultation.

09/03/2012 (1st round): The CPA-DD considers the only comments set in the final report of the meeting. The new version of the CPA-DD considers the suggestions made in the written

19/03/2012 (1st round): Section D.4 is revised CPA-DD version 02 does not provide sufficient information on how due account was taken of all the comments receive and listed in Section

OK






GLC Assessment

Final Concl.

surveys and Albanisa’s proposal of how to address them in the future. The follow up email to one of the comments is sent do the audit team: LSC - Follow up e-mail for comment on the workshop (outlook)

D.3. Hence, CPA-CAR 7 is still open

20/04/2012 (2nd round): The new version of the CPA-DD has a more detailed description on how the comments have been taking into account by the project owner (Section D.3).

10/05/2012 (2nd round): Ok. Section D.4 in revised CPA-DD version 3 for the first real case CPA (Alba Rivas) has been reviewed and deemed acceptable. Hence, CPA-CAR 7 is closed

CPA-CAR 8 (8/02/2012): PP is requested to address several instances of outdated generation and emission reduction values in project documentation including CPA-DD and Emission Reduction Calculation as per recent version of wind studies.

09/03/2012 (1st round): ER and IRR calculations spread sheets have been updated based on the latest wind studies: - Page 15, table 10 of Vestas Wind Farm Assessment Report UPDATE DIC 2011 (PDF). In addition the ER calculation and CPA-DD were updated based on the new schedule: - Schedule_ Project Implementation (PDF)

19/03/2012 (1st round): Version 02 of the ER calculation spreadsheet for Alba Rivas does not utilize the updated grid Emission Factor, as per latest submitted version of the spreadsheet for Nicaragua. Updated grid EF was correctly calculated as 0.6886 tCO2/MWh based on 3-year generation-weighted average data from the relevant years 2008, 2009 and 2010.. Tables with estimated ER figures in CPA-DD version 02 have not been amended accordingly.

OK






GLC Assessment

Final Concl.

The CPA-DD has been updated in every applicable part.

Estimation of net electricity generation is not transparent and relevant references to loss factor are missing in Table 3 of the CPA-DD version 02). The estimated annual net electricity generation cannot be confirmed for ER and IRR calculation spreadsheets. Hence, CPA-CAR 8 is still open.

20/04/2012 (2nd round): The new version of the CPA-DD and ER calculation spread sheet has updated the grid emission factor for Nicaragua and therefore, the emission reductions. The net electricity generation is based on the project developer technical knowledge, information sent by turbine manufacturers about typical energy losses on wind power plants and the gross generation with Operational Conditions Losses/Gain from Vestas. The generation data is set in Vestas Wind Farm Assessment Report UPDATE DIC 2011 (PDF) and the use of 15% for losses (plus detailed information), that lead to a final load factor of around 45% is supported by different sources like:

- Operative wind power plants in the same location as the project activity. These projects are Amayo (ref 2315) and Amayo II (ref 5305),

10/05/2012 (2nd round): Ok. The revised CPA-DD for the first real case CPA and the revised ER calculation spreadsheet have been reviewed by the validation team. The response and references provided by the PP on the estimation of net electricity generation were found to be complete and acceptable. The estimated loss factor of 15% is considered reasonable and consistent with typical ranges for wind turbines. The load factor of 45% is also justified and deemed correct. Hence, CPA-CAR 8 is closed.






GLC Assessment

Final Concl.

both located in Rivas, Nicaragua in the same side of the Great Lake of Nicaragua (Gran Lago). The first project is the most similar to the proposed CPA (39.9 MW) and the load factor was estimated around 48.5%. Four of the monitoring reports of Amayo described scenarios where the real electricity generation is lower than the estimations in the PDD, leading to total load factors of less than 40% for 2010 and 2011. Amayo II also estimated a load factor of 49%. Since the proposed CPA considers a total load factor of around 45%, the approach is even conservative compared to operative projects in Nicaragua and therefore, appropriate for the financial evaluation assessment. Amayo CDM Project and Amayo II CDM Project (XLS)

- Wind Energy, The Facts, webpage coordinated by the European Wind Energy Association and supported by the European Union. The Webpage considers a range of 10% to 20% of losses for typical wind farms, therefore the CPA considers a feasible loss factor: “Wind energy - the facts - wind resource estimation, page 51, http://www.wind-energy-the-facts.org/documents/download/Chapter1.pdf.






GLC Assessment

Final Concl.

- Green Energy Ohio (GEO): Not-for-profit organization dedicated to promoting environmentally and economically sustainable energy policies and practices in Ohio, considers that typical losses in wind farms are of 15%. Report, Page 23, http://www.greenenergyohio.org/page.cfm?pageID=2047

References in Table 3 of the CPA-DD have been updated.

CPA-CAR 9 (8/02/2012): Analysis of Common Practice is not up to date.

09/03/2012 (1st round): The new version of the CPA-DD is in concordance with the new version of the PoA-DD. The analysis has been done using INE latest statistics.

19/03/2012 (1st round): Ok, analysis of Common Practice in section B.3 of CPA-DD version 02 was found to be correct as per the step-wise approach in the “Tool for the demonstration and assessment of additionality” version 6.0. Hence, CPA-CAR 9 is closed.

OK






GLC Assessment

Final Concl.

CPA-CAR 10 (8/02/2012): PP is requested to correct the procedures for calibration of the electricity meter as per local requirements from the host country.

09/03/2012 (1st round): As per the commercial annexes of the operation regulation in the energy sector, meters shall be revised at least once every two year (paid by the project developer). As an example, ENATREL (the National Company for Electricity Transmission) offers the verification services with proper calibrated equipment’s, service that can be used by any project owner. - Page 9 of Commercial Annex (DOC). - Verification services_simec – ENATREL (PDF) Section B.6.1 has been updated. This section now considers the project characteristic that can bought electricity from the grid and the any consumption from the grid will be subtracted from the total electricity generation in order to calculate the emission reductions of the power plant.

19/03/2012 (1st round): Ok, Section B.6.1 has been corrected. The validation team checked the references to local host country requirements and confirmed this with interviews with technical staff at INE (Nicaragua). Hence, CPA-CAR 10 is closed.

OK

CPA-CAR 11 (8/02/2012): PP is requested to provide an updated IRR calculation along with supporting references for the values utilized.

09/03/2012 (1st round): The new version of the IRR calculation has introduced the following changes:

19/03/2012 (1st round): Upon review of the revised IRR calculation spreadsheet (version 02), the validation team found the following

OK






GLC Assessment

Final Concl.

1) Energy generation in <Inputs> C20 as per latest wind

studies. See CPA –CAR8. 2) Pre-Investment Costs in <Inputs> C31 with documents: Administrative costs_office payments (JPG), Wind Tower proposal - TDR_parque eolico_especificaciones WTG (PDF). 3) Operation and minor maintenance + Administrative Expenses are now together in <Inputs> E36 based on: O&M Cost_ALBA RIVAS (XLS). 4) Generator maintenance (USD per generator) <Inputs> C38 based on: VESTAS proposal V-100 111216 Propuesta Alba-Rivas OM (PDF) 5) Municipal taxes <Inputs> C46 adapted to Decree 455 - Municipal Taxes Plan. Page 2,3. 6) Toll <Inputs> C48 as per: http://www.enatrel.gob.ni/index.php?option=com_content&task=view&id=16&Itemid=128 7) Investment costs <Calculations> D14: a double counting formula was eliminated. New evidence for the IRR input data: a) Rolling Reserve <Inputs> C50 based on: Rolling Reserve _ ANEXO.TEC_RESERVA RODANTE (PDF). Since wind power plants cannot adjust their capacity, the energy equivalent of the rolling reserve has to be bought from the system. This is how it has been estimated in the IRR spreadsheet.

issues: A transparent estimation of net electricity generation (including relevant references to load factor and loss factors indicated in Table 3 of the CPA-DD version 02) has not been provided. The estimated annual electricity generation cannot be confirmed for ER and IRR calculation spreadsheets. Line 74 in Workbook ‘Calculations” of the IRR spreadsheet shows an error (#REF) message. Further clarification is required on the following estimates: - Pre-investment costs. - Rolling reserve Hence, CPA-CAR 11 is still open






GLC Assessment

Final Concl.

b) Regulation INE <Inputs> C44 based on legal resolution: Regulation INE - sentencia caso INE (PDF). c) Generation licence payment <Inputs> C31 (86,000 USD) based on: Requisitos Licencia de Generacion (PDF) 20/04/2012 (2nd round): The net electricity generation is based on a technical Report of the turbine manufacturer (Vestas) and information of typical losses in wind farms. See more detailed explanation in CPA-CAR 8. The table of the CPA-DD has been updated to detail the source of the information. Line 74 in Workbook ‘Calculations” of the IRR spread sheet was deleted since it was referenced to a non-existent cell. The pre investment costs are detailed in the following table:

Value (USD)

Source/Evidence

37,235

Wind Tower : Administrative costs_office payments (JPEG) and Wind Tower proposal - TDR_parque eolico_especificaciones WTG

(PDF) 418,148 Administrative costs : Administrative

10/05/2012 (2nd round): Ok. The revised IRR calculation spreadsheet dated 2012-04-20 has been reviewed. The validation team has confirmed that the error in line 74 has been addressed. As per response sent by PP, the pre--investment cost totalling 753 700 USD have been justified and supported with relevant documentation. Calculation of the rolling reserve using the expected price for electricity sales instead of the energy market price is deemed correct and conservative. Hence, CPA-CAR 11 is closed.






GLC Assessment

Final Concl.

costs_office payments (JPEG)

32,317 Basic studies: Administrative costs_office

payments (JPEG) -

86,000

Licence payment: Estimation based in the regulatory framework: Generation licence

payment - Requisitos Licencia de Generacion (PDF) page 8.

180,000 Office rent: Administrative costs_office

payments (JPEG)

100,000 Study of the impact of the Project in the system: Estimated by project developer

All the evidence has been previously submitted to the audit team. A formal proposal for the study of the impact of the project in the system was not available for the project developer during this validation phase, therefore, as a conservative approach, the value is deleted in the financial analysis spread sheet and the final values updated in the CPA-DD. According to the rolling reserve regulation (Rolling Reserve _ ANEXO.TEC_RESERVA RODANTE (PDF), page 28), the rolling reserve of an energy project in operation is the 5% of the momentary demand of the system. As explained before, wind turbines cannot adjust their capacity to have a 5% of the momentary demand as rolling reserve and then the project will have to buy the equivalent capacity to another agent in the electric market in order to comply with the existing regulations in






GLC Assessment

Final Concl.

Nicaragua. The Operative Regulation (INE Resolution 26-2000), Chapter 9.7 details the approved options for the dispatch center (CNDC – Centro Nacional de Despacho de Carga) to cover the system requirements of rolling reserve. It is stated that the agents of the market can sign contracts with other agents to cover its rolling reserve or buy directly in the occasional market. If in an hour the CNDC identifies an agent with less of the rolling reserve requirement, they will calculate the payments of this shortage as the multiplication of the energy by the rolling reserve price of that hour. The rolling reserve price is the occasional market price of that hour. All the power plants already operative by the project developer have energy contracts with other agents, then the CPA will have to search in the market to comply with the rolling reserve regulation. The market price of the NIS is published by the INE (Nicaraguan Electricity Institute). The average of the previous two years was considered for the estimations and the result is of 154.2 USD/MWh (see “NIS prices- energy market” for specific data and sources). As a conservative approach the CPA developer considers that they could try to buy the rolling reserve at the same price they estimate will sell the project electricity to the grid (98.85 USD/MWh).






GLC Assessment

Final Concl.

The financial analysis spread sheet is using as input the project electricity price, as it is a more conservative approach. The financial analysis has a solid sensitivity analysis as per CDM requirements. Operation Regulation - Resolution No 26-2000 (PDF) NIS prices- energy market (XLS)

CPA-CAR 12 (25/07/2012) Format of the coordinates in section A.4.1.2 is not valid.

08/08/2012 (3rd round): The new version of the CPA-DD considerers the coordinates also in decimal format. In addition a new format of the map is attached in the CPA-DD in order to have a clear image of La Fe Farm. Also a separate document is submitted to the validation team with the project location. Location - La Fe map and coordinates_decimal (PDF)

2012-08-08 (3rd round): Ok, the revised CPA-DD has been reviewed and the corrections made to the coordinates shown in table of section A.4.1.2. The coordinates are now presented in decimal format and the validation team confirmed through mapping software and GPS coordinates taken during the on-site visit that these coordinates correspond to the location of the project activity. Hence, CPA-CAR 12 is closed.

OK

CPA-CAR 13 (25/07/2012) Start date of the CPA crediting period and reference to the latest version of

08/08/2012 (3rd round): The start date of the crediting period has been updated to reflect the latest schedule send by Vestas submitted in

2012-08-08 (3rd round): Ok, the revised CPA crediting period start date and

OK






GLC Assessment

Final Concl.

the PoA-DD is not up to date. Contact information of the CPA implementer is not consistent with Annex I.

round one. Schedule_Project Implementation” (PDF) A new version of the emission reduction of the CPA is also submitted since a typo was found in the reference date. Although the calculations are right, and not changed in this new version. The new version of the CPA –DD considers the latest version and date of the PoA-DD.

supporting documentation have been reviewed by the validation team. The document Schedule_Project Implementation supplied by Vestas, the equipment manufacturer, indicates the date of 2013-03-31 as the expected date of commissioning of the CPA. Revisions made to the CPA-DD regarding the updated PoA-DD version and date were also reviewed and deemed correct and acceptable. Contact details for the CPA implementer in the revised CPA-DD were found correct and consistent. Hence CPA-CAR 13 is closed.

CPA-CL1 (05/09/2012) Changes were found from the CPA-DD version published for GSC to the final CPA-DD versions which were not triggered by a request from the validation team, including revisions made to the ER calculation spreadsheet and investment analysis spreadsheet.

05/09/2012 (3rd round): The PP implemented minor additional changes in the project CPA: - Even when the pre-investment costs have been properly listed, supported and assessed (see CPA-CAR 11 of the validation report), the PP has chosen to delete all the section related to pre-investment costs in the project evaluation of CPAs in order to have an even more conservative approach for all the CPAs taking into account paragraph 6 of the Guidelines on the Assessment of Investment Analysis (version 5). The impact of this cost is not significant in the IRR of the project (its elimination in the specific CPA adds less than

05/09/2012 (3rd round): Ok. GLC can confirm that PP has undertaken the changes mentioned in the response provided, which were not directly triggered by findings. These changes were reviewed and deemed not to impact on the project design. Pre-investment costs were eliminated from consideration in the financial analysis, resulting in a change of the IRR. The updated IRR is now 9.98%, which has been confirmed by the validation team through review of the calculations provided in version 5 of the investment analysis spreadsheet (Cash Flow Alba-Rivas v5 06 09

OK






GLC Assessment

Final Concl.

0.2% in the IRR). The Specific CPA has been updated accordingly (additionality section). - In addition, the ER and IRR spreadsheets of the CPA have been modified in order to introduce the CPA-DD name, version and date of the project.

2012.xls). CPA-DD for the first real case has been updated consistently as confirmed by the validation team. As per updates in the PoA-DD, the PP has also updated the methodology ACM0002 from version 12.2.0 to version 12.3.0. The CPA-DD for the first real case was found to be consistent with the latest revisions of the PoA-DD and generic CPA-DD: Editing of the ER and IRR spreadsheets regarding date and version numbers are considered correct and acceptable. Any other editing or revision has been addressed and tracked by a finding. Hence, CPA-CL 1 is closed.




Table 3: Eligibility Criteria of the proposed CPA under the PoA and its assessment

Means of Validation # Eligibility Criteria CPA Justification with evidences

Assessment Concl.

1.

The project activity could be implemented under this program if:

a. It will be a new wind power plant that could be

on-shore or off-shore, or: b. Will be a capacity addition over an existing

wind power plant, to increase in the installed power generation capacity by means of: (i) the installation of a new power plant/unit besides the existing power plant/units, or (ii) the installation of new power units, additional to the existing power plant/units. The existing power plant/units continue to operate after the implementation of the project activity, or:

c. Will be a retrofit (or Rehabilitation or Refurbishment) over an existing wind power plant that involves an investment to repair or modify an existing power plant/unit, with the purpose to increase the efficiency, performance or power generation capacity of the plant, without adding new power plants or units, or to resume the operation of closed power plants. Retrofits shall only include measures that involve capital investments and not regular maintenance or housekeeping measures to increase the power generation

Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1 is a new on-shore wind power plant (option a) located in Nicaragua as stated in the AlbaRivas Report for the Ministry of Energy and Mines in 2010 / 28/

Evidence checked

I. It was confirmed by the GLC validation team during the on-site visit, through interviews with the PPs and government representatives and through review of the evidences presented /23/ / 28/ /37/ /46/ /49/ /56/ that this CPA is a new, on-shore wind power plant that will be implemented in the host country of Nicaragua.

II. This is in line with the criterion 1(a).

OK





Assessment Concl. capacity, or:

d. Will be a replacement of one or several existing unit(s) at an existing power plant that involves investment to increase in the installed power generation capacity.

2.

The project activity will be a wind power plant/unit located in the PoA’s host country or in a host country added to the PoA after registration but a CPA will not consider multi country projects (i.e. a CPA cannot consider a project located both in Peru and Nicaragua).

The project is a new wind power plant located in Nicaragua (Rivas Department) as stated in the AlbaRivas Report for the Ministry of Energy and Mines in 2010 / 28/

Evidence checked

The PoA host country currently is Nicaragua and Peru. It was confirmed by the GLC validation team during the on-site visit, through interviews with the PPs and government representatives and through review of the evidences presented that this CPA is a new, on-shore wind power plant that will be implemented in the host country of Nicaragua, which is located within the boundary of the PoA.

OK

3.

The project activity requires no energy generating equipment to be transferred from another activity located in a non-annex I party, and no existing equipment is transferred from the project to another activity.

The project will only acquire new equipment for its operation. The new equipment is from manufacturer Vestas /23/

Evidence checked

It was confirmed by the GLC validation team during the on-site visit, through interviews with the PPs and government representatives and through review of the evidences presented that this CPA is a new, on-shore wind power plant that will be implemented in the host country of Nicaragua. All technology will be new and purchased from Vestas /23/. Since this is a greenfield, it can be confirmed that no existing equipment will be transferred from the project to another activity.

OK

4.

During the operation phase, the power plant will be connected to the national grid system.

The project will be connected to the NIS during its operation, selling all the electricity produced to this system. This consideration is made in the AlbaRivas Report for the Ministry of Energy and Mines in 2010. / 28/

Evidence checked This has also confirmed by validation team during onsite visit and interviews with local officials from INE.

OK





Assessment Concl.

5.

The CPA under the PoA is neither registered as an individual CDM project activity, nor included as a CPA in another registered CDM PoA. The CPA proponent shall sign a formal document stating that the project is not or will not participate in other carbon market mechanism.

The CPA proponent is not submitting the project as a traditional CDM project, as part or another PoA or to another carbon mechanism existing. In addition, all the formal documentation has been signed. CME - Sworn declaration - carbon mechanism_Albarivas.pdf /35/

Evidence checked The sworn declaration provided by the PPs was reviewed and deemed acceptable. The CPA owner has declared under legal oath that the CPA has not participated and will not participate in any carbon mechanism other that this PoA. The document is signed and stamped by Mr. Ramon Calderon Vindell, vice-president of ALBANISA.

OK

6.

To avoid double counting of emission reductions, each CPA-DD shall be uniquely identified and defined in an unambiguous manner by providing geographic information (including coordinates). With this information, the CME can analyze if the project is deemed to be registered either as an independent CDM project activity or as a CPA of another PoA, by checking the UNFCCC official website in ongoing validation processes for independent CDM projects and validation and registration sectors for PoAs.

The CPA (CPA-DD) has a CME internal code (TN002). The official coordinates of the project are set in section A.4.1.2 of this CPA-DD. The official start and end date of the crediting period will be the ones available at the UNFCCC website. The coordinates and description of the project are set in CME internal reports. As an internal process, the CME will contrast this information against any new potential CPA in the future. At the moment there is no similar project in the UNFCCC official website. Location - Coordinates La Fe Farm.pdf /36/

Evidence checked CPA installation records will have a unique identification number in the CME database. The validation team has crosschecked the UNFCCC website and has not identified any registered wind PoA in the host country. There is another wind CDM project besides this CPA in Nicaragua, however by means of reviewing the geographical coordinates it can be confirmed that no other project activity is taking place within the CPA physical boundary. Therefore, it is deemed that this CPA is correctly identified and defined through precise geographical coordinates and that it has not been double counted for another CDM or CPA projects.

OK

7.

The project activity shall not have a start date (as defined by the UNFCCC) before the Global Stakeholder Process (GSP) of the PoA on December 28th, 2011. Since the start date can be defined by different project milestone, the CPA developer shall provide formal documentary

The project start date is February 17th, 2012 (contract of wind turbine acquisition with Vestas). /23/

Evidence checked The start date of the CPA is after the date of the GSC (2011-12-28). The validation team has reviewed the evidence presented (contract of wind turbine acquisition with Vestas) /23, and the start date has been also confirmed through interviews with

OK





Assessment Concl. evidence when the start date has already occurred to the CME for its evaluation (e.g. contracts for supplying wind turbines, contract for civil works, payments set in PPAs, contracts with the entity financing the project, among others according to the project characteristics and party involved) or clearly state that the start date has not taken place at the moment of the CPA inclusion by signing a sworn declaration.

ALBANISA staff during onsite visit.

8.

The project activity must fulfill the methodology ACM0002 “Consolidated baseline methodology for grid-connected electricity generation from renewable sources” (version 12.3.0) as listed in section E.2 of the present PoA – DD. In addition, the baseline scenario shall comply with the list of plausible alternatives (based on the ACM0002 version 12.3.0), listed in section E.4.

The CPA fulfills the applicability conditions of the “Consolidated baseline methodology for grid-connected electricity generation from renewable sources” (version 12.3.0). The project is a new wind power plant of 39.6 WM that do not use fossil fuel nor biomass residues for its operation and has the information to calculate emissions as stated in the PoA-DD.

Evidence checked The CPA fulfils the applicability requirements of ACM0002 version 12.3.0 and tools referred to therein. All options selected for estimating baseline, project and leakage emissions have been reviewed by the validation team and found to be correct. Detailed assessments are included in section 4.3, 4.6.1, 4.6.2 and 4.6.3 of this report.

9.

The CPA shall be able to demonstrate additionality as listed in section E.5 of the present PoA–DD. This sections request the application of the “Tool for the demonstration and assessment of additionality” version 06.0.0 and the “Combined tool to identify the baseline scenario and demonstrate additionality” version 4.0.0 in the alternative identification of the retrofit or replacement projects. In the case of off-shore projects up to 15 MW the PoA refers to the “Information on additionality (Attachment A to

The CPA can demonstrate additionality using an investment analysis as stated in the PoA-DD. See section B.3 of the CPA-DD, where it is concluded that the IRR is below the benchmark for Nicaragua. The project activity is not an off-shore project under 15 MW, therefore no debundling analysis shall be performed. Financial Model for Alba Rivas, Wind Power Plant – Tepeu PoA CPA # 1 /15/

Evidence checked The validation team has assessed the demonstration of additionality through benchmark analysis. The latest version of the financial model has been completely checked, all the calculations were checked and no mistakes have been found. Therefore, the CPA is able to demonstrate additionality as per Section E.5 of the PoA-DD. Through observations and interviews conducted during the on-site visit, the GLC validation team confirmed that the CPA is not an off-shore wind power plant.

OK





Assessment Concl. Appendix B of 4/CMP.1 Annex II)” and the demonstration that the CPA up to 15 MW is not part of a larger project (in this cases the CME will implement a debundling analysis with results set in a formal report.

10.

The CPA proponent shall accommodate a local stakeholder consultation process before its inclusion in the PoA, as stated in Section D of the present PoA – DD. The CPA proponent shall develop the consultation process following the DNA procedures if existent, or develop general and specific invitations to the stakeholders in the surrounding geographical areas, give at least one week between the invitations and the process, have a list of participants, and give a minute of the meeting to describe the comments or agreements.

The local stakeholder consultation has been developed on December 13th, 2011 in the city of Rivas, then before the GSP of December 28th, 2011 and the inclusion of the CPA. See section D of the present CPA-DD.

Evidence checked /Onsite checked

Invitations and records of the local stakeholder consultation were reviewed by the validation team. It was confirmed that the consultation took place on 2011-12-13, and that over a week’s notice was giving to the invitees. DNA representatives who attended the consultation were interviewed and confirmed that even though no specific requirements exist in Nicaragua for conducting consultations, the event was satisfactory and met all expectations.

OK

11.

The CPA proponent shall describe the environmental impact analysis as per the Environmental Impact Assessment, Environmental Evaluation or environmental description as stated in section C of the present PoA – DD. In order to be included in the PoA, the CPA developer shall have the Environmental Impact Assessment (EIA) or the Environmental Impact Declaration (DIA) approved, if applicable.

In Nicaragua, wind power plants are not requested to submit an EIA, but the project owner has developed an EIA that has been approved on April 13th, 2009 and the renovation of the license is dated in September 23rd, 2011. The description of the potential environmental impacts is detailed in sections C.2 and C.3 of the present CPA-DD based on the mentioned EIA. Administrative Resolution No. 008-09 (Ref Doc 15 - Environmental Authorization

Evidence checked

The PPs have followed the requirements of the host country regarding assessment of environmental impacts, as evidences by the environmental authorization extended by MARENA. The validation team was able to confirm this through means of interviewing the local representative of MARENA in the city of Rivas, Nicaragua.

OK





Assessment Concl. 13_04_09.pdf) and Administrative Resolution No. 008-09A (Ref Doc 16 - Renovation of environmental authorization 23_09_11.pdf) /37/

12.

The CPA proponent will sign a formal document affirming that funding from Annex I parties, if any, does not result in a diversion of official development assistance.

The formal documents have been signed by the CPA proponent, as the project will not use funding from any Annex I parties. Sworn Declaration – No Annex I Funding CME - Annex I funding – Albarivas.pdf /38/

Evidence checked

The validation team has checked the evidence. No ODA or Annex I funding is applied to this CPA.

OK

13

The CPAs can have the most suitable technology for the project implementation, but shall at least have 3 blade turbines complying with IEC 61400 or equivalent/better standards and with a lifetime of at least 20 years. The project will have SCADA system (or a equivalent/better system) for data management. The project developer shall evidence the type of equipment’s to be implemented by submitting proposals, technical reports of the project or the acquisition contract if existent.

Project turbines are conformed by 3 blades complying with IEC61400 standard, with a lifetime of at least 20 years. SCADA will be implemented for project operation. See AlbaRivas Report for the Ministry of Energy and Mines in 2010 /28/ and Vestas certificate (DNV Type Certificate). DNV Type Certificate.pdf /39/

Evidence checked The certificate provided by the PPs has been reviewed by the validation team. By means of technical expertise the project equipment is deemed suitable and in compliance to the technology specifications set in this criterion.

OK

14

The CPA has to be a voluntary initiative by the CPA operator and not implemented as a result of a mandatory policy or regulation. The CME will review the regulatory framework and CPA developer will sign a sworn declaration declaring its voluntary implementation and participation in the PoA.

There is no regulation that forces the implementation of wind power plants in Nicaragua (all wind power plants are from private entities and are in the UNFCCC website, registered or on validation). The sworn declaration has been signed by the project developer.

Evidence checked The validation team has checked the evidence. The CPA implementer has solemnly stated that participation in this PoA is entirely on a voluntary basis. Besides, the validation team has also confirmed via onsite interview with government officials that there is no mandatory law enforcing implementation of this PoA.

OK





Assessment Concl. CME - Sworn declaration - voluntary participation- Albarivas.pdf /40/




ANNEX B: CERTIFICATES OF COMPETENCE