Event
First Climate at Carbon Market Insights 2009
Location: Copenhagen, Denmark
Nikolaus Schultze, First Climate's Project Finance Director, moderated the side event entitled "Overcoming barriers to unlocking the carbon value for renewable energy finance" from 9:00 - 10:30 on 18 March. Together with Markus van der Burg (Conning Asset Management), Toru Kubo (Asian Development Bank) and Alexis Manuel (Orbeo), he discussed the following issues:
Carbon cash flows contributing to liquidity
• To what extent do carbon cash flows contribute to improving the liquidity ratios of projects?
• How can carbon cash flows contribute to improve interest cover ratios, and hence mobilise
additional debt finance?
Carbon value to be used as collateral to mobilise debt finance
• How can advance payments of carbon assets be used to replace / complement equity and
mobilise additional debt finance?
The role of guarantee vehicles
• How can bottlenecks in accessing local debt and in monetising carbon cash flows be
bridged by guarantees?
• Are there sufficient or adapted providers of guarantees in the marketplace?
Urs Brodmann, First Climate's Chief Risk Officer and member of the Executive Board, contributed to the panel discussion "A carbon credit crisis?". Held on 18 March from 11:00-12:30, this session addressed the following issues in particular:
- Who will finance the underlying projects?
- Carbon financials back on track?
- Invest in CDM/JI now or wait until more clarity on post-2012?
Urs Brodmann also participated in the side event "Breaking the “2012 Barrier” – securing project financing using post-2012 credits: ADB Future Carbon Fund" hosted by the Asian Development Bank. Taking place from 16:00 - 17:30 on 18 March, this session focused on:
- Recent drop off in new CDM project development
- Emerging carbon markets around the world
- Ways of securing additional project finance for post-2012 investments
There are two problems today facing CDM: (1) lack of long term price signal; and (2) shortage
of financing options. The “2012 Barrier” needs no explanation. All new project proposals today
can’t count on secure CER payments so developers are returning to BAU. However even with
a price signal, the prevailing market modality is payment on delivery. This particularly does
not help CDM developers, since they operate in developing economies with perceived higher
risk – i.e. not the most suitable environment to secure financing in the first place. This session
will take the ADB’s recently-launched Future Carbon Fund as a case study, and explore what the
public development community can do to help keep CDM going while the world global economy
recovers and the world seeks a concrete long term framework to address climate change.
Dr. Jochen Gassner, Director of the Climate Neutral department at First Climate, participated in the panel discussion "The Voluntary Endgame: Where Does It Go From Here". The session took place from 16:00 - 17:30 on 18 March and focused on
- Simply a Precursor to Mandatory regimes?
- Long term pricing
- Permanent place for Forestry?
For more information visit Carbon Market Insights 2009
