green banking and mrv adfiap takashi hongo jbic
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Green Banking and MRV
17 November 2010
Takashi HongoSpecial Advisor and Head of
Environment Finance Engineering Department
Japan Bank for International Cooperation
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Green Finance and MRV
3
Green Pressure
Financial InstitutionsGreen company
Green Projects
Stake Holders Regulator
Non Green Company/Projects
X
What is “Green” ?
How to evaluate the outcome of “Green” ?
Measurement of CO2 reduction
4
Financial Institutions
InvestorsInvestment
Projects
Affluent society
Mission of Financial Institutions
Mission of Financial institutions
Financial Institutions should support economic growth to realize affluent society under environment constraint. Balancing economy and environment is crucial
0 2 4 6 8
Asean
India
China
Japan
US
2007
1990
Per Capita Energy Demand
Source IEA. ASEAN is 1980 and 2007
Toe0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
0 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1 400
Ele
ctrif
icat
ion
rate
Population without access to electricity (million)
MalawiUgandaBurkina FasoDR of CongoTanzaniaMozambiqueMyanmarAfghanistanKenyaEthiopiaAngolaCameroonSudanYemenBangladeshNigeriaPakistanIndonesiaIndiaOthers
Average electrification rate in developing countries = 72%
1456
Source IEA WEO2009
India300+ million
Access to clean energy
5
“Emission” or “Reduction”?
Reductions
Emission from invested projects
Emission from invested projects
Emission from Existent facilities
66
J-MRV
7
JBIC “GREEN”
Futurecarbon market
Finance
J-MRV
Commercially viable BAT
(best available technology)
Deployment
Possibility
・ Industries・ Carbon Players・ Host Government
Dialogue
Share
GHG emission reduction projects
GHG emission reductions
JBIC will review the followings 1. Climate change policy of the host country 2. Technology to be used 3. Reduction amount by J-MRV
J-MRV・ Scaling up low carbon investment・“ simple, practical and internationally acceptable” guideline・ Following investor’s decision making process
(MRV: Measurement, reporting and verification)
Reduction amount
Ownership
New Financial Program (GREEN) and J-MRV(Global action for reconciling economic growth and environmental preservation)
Procedure of J-MRV and GREEN
Project JBIC
Request for Finance
(with emission data)Financial
consideration
External Expert
Advisory Committee
Loan Agreement
DisburseProject construction
Emission monitoring
After investmentMonitoring
External Expert
Advisory Committee
・ Project completion・ 1 year after completion
Calculation ofReductions
Calculation ofReductions
Third party opinion
Third party opinion
Procedure of GREEN and J-MRV
・ Scaling up low carbon investment・“ simple, practical and internationally acceptable” guideline
・ Following investor’s decision making process
Baseline amounts = Emissions in the case without investment
Option of Baselinea/ Actual emissions before investment,
b/ Emissions from similar installations in operation in the country or in the region
c/ Emissions from similar installations recently invested in the country or in the region
Reduction amounts = Baseline emissions - Emissions from projects
Taking into account of・ investment climate such as economy, energy,
technology, regulation.・ availability and reliability of data
Sampling and theoretical value may be applicable
http://www.jbic.go.jp/en/about/news/2010/0730-01/100730_mrv_guideline.pdf
J-MRV
Energy Efficiency (Renovation)
Reductions
Before Investment After Investment
Taking into account of the capacity increase of the facility by the investmentIn case of new facility, CO2 emission amount of new facility will be compared with the national average of the same type of facility
CO2 emission amount
J-MRV Methodology
Renewable Energy
Reductions
National Total Invested Facility
Renewable energy is Zero emission energy, in principle.
Average CO2 emission
(CO2 emission factor)
J-MRV Methodology
Fossil Fuel Energy
Reductions
National Total
Invested Facility
National energy security, economic is cosidered
Average CO2 emission
(CO2 emission factor)
In PrincipleReductions
Availability of low carbon energy is limited
Average CO2 emission of the same fuel
National Average
Investment
J-MRV Methodology (under preparation)
Higher Energy Efficiency Appliance
Reductions
National Average
New Alliance
Theoretical value and estimated value is acceptableAvailability of data is considered
Average CO2 emission
An unit
Reductions
National Total
Estimated National
Total emission By the appliance
National Average
After Investment
Estimated National
Total emission By the appliance
Estimation of program Total
J-MRV Methodology (under preparation)
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“EXIT” of MRV
Demonstration Purpose
Carbon Market
Risk Mitigation
We can clearly introduce our contribution for climate change to the stakeholders under low carbon pressure.
Carbon is cost and banks have responsibility to curve emission increase. Credit Rating including carbon is considered.
CDM or Bilateral Credit Scheme will generate additional cash flow.
Bilateral Credit
Bilateral Scheme : F/S Support Program
Project types Project site
METI Advanced Coal Fired Power Indonesia, Viet Nam, India
Geothermal Power Indonesia×2, Philippine
Transmission Improvement Viet Nam
Energy Intensity Industry ( Steel, Cement) Philippine, India, Lao, Indonesia, Malaysia
Energy management of industry Indonesia, Thailand, China, Malaysia
New Air-Conditioning Systems (Office, Hotel, etc.) Maldives
CHP Thailand
DSM (Home Appliances) Mexico, Viet Nam
REDD+ Peru, Indonesia, Lao, Brazil
Eco Drive, Eco House Thailand , China, Asia
CCS Indonesia
Nuclear Power Viet Nam
Efficient use of Fertilizer Malaysia, Indonesia
MOE Waste Management Thailand
Peat Fire Management Indonesia
Modal Shift Lao
F/SProject Construction
Project Operation
Finance(GREEN, LIFE)
Standardized MRV
J-MRV
Bilateral Agreement
“Demand”
International acceptance
Management Capacity
F/S SupportProgram
Bilateral Scheme : “J-MRV and GREEN” and F/S Support Program
Project Cycle
1818
Public Sector(Improvement of investment climate)
Private Sector(Driving force)
Financial Sector (Push last one mile)
Capacity of Our Planet
Change of Lifestyle
Better investment climate, More investment
Use of Technology
Public Private Financial Partnership