María Paz CigaránNational Environmental Council (CONAM)

June 12, 2003

NATIONAL STRATEGY STUDY NATIONAL STRATEGY STUDY Clean Development Mechanism Clean Development Mechanism - NSS PERU- NSS PERU

Objectives of this PresentationObjectives of this Presentation

To highlight the Peruvian National Strategy Study (NSS) for the implementation of the CDM.To highlight the Peruvian National Strategy Study (NSS) for the implementation of the CDM.

To present the preliminary CDM Peruvian PortfolioTo present the preliminary CDM Peruvian Portfolio

Following stepsFollowing steps

BACKGROUND

How does Peru stand in terms of GHG Emissions?

5576031

1215965 1031891

223938 98816.3

0

1000000

2000000

3000000

4000000

5000000

Estados

Unidos

J apón Alemania Holanda Perú

REFERENCE YEAR: 1994

Thousands of Tons

USA Japan Germany Holland Peru

Latin American Countries Share in GHG EmissionsLatin American Countries Share in GHG Emissions

7%1%

28%

29%

1%

1%

6%2% 3%

0%

1%

1%

4%

3%

3%

0%

1%

2%1%0%

3%2%

1%

Argentina

Bolivia

Brasil

Chile

Colombia

Costa Rica

Cuba

República Dominicana

Ecuador

El Salvador

Guatemala

Honduras

Jamaica

Mexico

Antillas Holandesas

Panamá

Perú

Puerto Rico

Trinidad & Tobago

Uruguay

Venezuela

Islas Vírgenes

Otros

PERUMEXICO

BRASIL

Total 1994 = 98.8 Million Tons CO2

equivalent

The Peruvian GHG Emissions: 1994, 2010 and 2025

22.38

10.00

23.21

41.64

2.76

25.28

11.38

24.17

36.73

2.44

27.26

14.76

23.81

32.25

1.92

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1994 2010 2025

Energía Procesos industriales Agricultura Cambio de uso de la tierra y silvicultura DesechosEnergy Industrial Processes Agriculture Land Use Change and Silviculture Waste

THE NATIONAL STRATEGY STUDY (NSS) PERU

Activity 1: Review of existing Activity 1: Review of existing information.information.Result: Initial InformationResult: Initial Information

Activity 2: GHG Mitigation Potential.Activity 2: GHG Mitigation Potential.Res.: Preliminary CDM Projects Portfolio.Res.: Preliminary CDM Projects Portfolio.

Activity 3: Global Carbon Market Activity 3: Global Carbon Market StudyStudy

Res.: Estimation of opportunities for CDM Res.: Estimation of opportunities for CDM Activity 4: Assessment of the Legal Activity 4: Assessment of the Legal

and Institutional Framework for the and Institutional Framework for the CDM.CDM.

Res.: Specific action plan to participate in Res.: Specific action plan to participate in the CDMthe CDM..

Activity 5: Financial Aspects of the CDM Activity 5: Financial Aspects of the CDM ImplementationImplementation

Res.: Proposals to overcome barriers to Res.: Proposals to overcome barriers to investment in Peruvian CDM Projects.investment in Peruvian CDM Projects.

Activity 6: Applied Methodology for the Activity 6: Applied Methodology for the Peruvian CDM ProjectsPeruvian CDM Projects

Res.: Methodological guides for CDM Res.: Methodological guides for CDM Projects in selected sectors.Projects in selected sectors.

Activity 7: CDM Strategy, Policies and Activity 7: CDM Strategy, Policies and Action Plan.Action Plan.Res.: Follow Up Proposals for the period Res.: Follow Up Proposals for the period 2002-20122002-2012

ACTIVITIES

The Main Actors for the CDM Implementation in PeruThe Main Actors for the CDM Implementation in Peru

PROINVERSIONCDM Investment Promotion

CONAMCDM National Authority

CONAMApproval and National Registration

of CDM Projects

Formulation, Structuring and Development of CDM Projects

BusinessmenFONAMConsulting firmsMultilateral Entities

CERs Commercialization

Verification and Certification

BusinessmenCETConsulting firms

Registered DOEsCDM Projects Validation Nationwide

CDM Project Execution

Businessmen (Private sector) Government (public sector)

Financing of the pre-investment phase of CDM

Projects

FONAMBusinessmenFinancial SectorPROFONANPEFONDEBOSQUECETOthers

BusinessmenCOFIDEDevelopment BanksPrivate Banks Investment fundsPrivate Investors

CDM Projects Financing

Registered DOEs

KEY FACTORS FOR OUR CDM STRATEGY:

•INFORMATION

•CAPACITY

•CAPITAL & TECHNOLOGY

Peruvian Strategy to Implement the CDM

CER

GOODS AND SERVICES

TIME

Information Diffusion

Capacity Building

Technology Transfer and Investment Promotion

+

1. To spread information on the CDM and its opportunities

1.1 To inform Peruvian Businessmen on the CDM (At least one of every 3 businessmen, able to perform GHG emissions reduction, is familiar with the CDM concepts 6 months after the CDM Promotion Office started operations).

1.2 To inform local financial firms on the investment opportunities associated to the CDM. (Two of every five investment officers is familiar with the financing of CDM Projects and CER commercialization).

INFORMATION

2. Local capacity building to bring down transaction costs and improve access to pre-investment resources for CDM Projects.

2.1 To hold local capabilities to formulate, structure and finance CDM Projects a year after the CDM Promotion Office started operations. (At the beginning composed by at least 20 local professionals: 5 Industry, 3 Energy, 2 Waste Management, 6 Agroforestry and 4 Transport)

2.2 To hold institutional capabilities to profit from the CDM a year after the CDM Promotion Office started operations. (At least 3 private institutions with local presence accredited as DOEs are able to verify and / or certify CDM Projects.)

2.3 To promote the financing of the pre-investment phase of CDM projects. (At least 2 projects of every 10 secure funds to finance their pre-investment phase during the first year of operation of the CDM promotion office).

CAPACITY BUILDING

3. To ease the transfer of capital and technologies

3.1. To have a legal framework to regulate CDM operations.

3.2. To offer an enabling environment for CDM Projects easing their development, financing and execution. (2 of every 10 CDM Projects, presented before the CDM National Authority, access domestic and international resources within the first year of the CDM Promotion Office operations)

3.3 To promote the closing of CERs purchase 3.3 To promote the closing of CERs purchase dealsdeals

CAPITAL & TECHNOLOGY

OUR PRELIMINARY CDM PORTFOLIO

Scenarios for the Peruvian Offer of CERs

Scenario Global Average Price per ton of CO2

Exports in Million tons of CO2 per year

Pessimistic 2 US$ 1

Conservative 4 US$ 2

Optimistic 6 US$ 3

Dreamed 10 US$ 5

Main Sectors for CDM Projects

Energy generation Energy Efficiency Transport Industrial Processes Aforestation and reforestation

N°

ENERGY PROJECTS

GHG

REDUCTION:

TCO2/10Y

CER REVENUES, in

US$

Projects

Investment (US$)

01 Planta Eléctrica - Bagaso, Paramonga 770,000 3,080,000 10,600,000

02 Planta Hidroeléctrica Cia Minera Norte 500,000 2,000,000 8,900,000

03Esquemas Aislados de Electrif icación Rural,Tocache - Bella Vista

840,000 3,360,000 15,100,000

04 Planta Hidroeléctrica de Tarucani 2,228,000 8,912,000 42,000,000

05 Planta Hidroeléctrica en el Norte 453,470 1,813,880 16,500,000

06 Planta Hidroelétrica Huanza 2,200,000 8,800,000 98,900,000

07 Planta Eléctrica de Gas Enersur Ilo 2,000,000 8,000,000 100,000,000

08 Demanda adicional de gas-Ramal Norte 1,900,000 7,600,000 115,000,000

09 Planta Hidroeléctrica de Quitaracsa 500,000 2,000,000 75,856,000

10Cierre de la Estación 9 de Bombeo deOleoducto Nor Peruano - Olmos

256,770 1,027,080 44,200,000

11 Parque Eólico de Malabrigo 40,000 160,000 10,000,000

11,688,240 46,752,960 537,056,000

CDM PROJECT PORTFOLIO - NSS PERU

SUB TOTAL: ENERGY SECTOR

INDUSTRIAL PROJECTSGHG

REDUCTION: TCO2/10Y

CER REVENUES, in

US$

Projects

Investment (US$)

12 Aumento del % puzolana en cemento 1,070,000 4,280,000 320,000

13 Eficiencia Energética en Calderos 170,000 680,000 5,000,000

14 Reinyeción de metano en Talara 146,000 584,000 726,000

1,386,000 5,544,000 6,046,000

LULUCF PROJECTSGHG

REDUCTION: TCO2/10Y

CER REVENUES, in

US$

Projects

Investment (US$)

15Plantación forestal con fines maderables,Selva Central

487,292 1,949,168 13,861,500

16Reforestación con Especies Locales paraPropositos Industriales Selva Baja

364,000 1,456,000 1,351,000

17Reforestación con Especies Locales SanMartín

671,913 2,687,652 14,810,700

18 Forestación en zonas áridas de la Costa Norte 547,038 2,188,152 15,360,700

2,070,243 8,280,972 45,383,900

SUB TOTAL: INDUSTRIAL SECTOR

SUB TOTAL: FORESTRY SECTOR

WASTE MANAGEMENT PROJECTSGHG

REDUCTION: TCO2/10Y

CER REVENUES, in

US$

Projects

Investment (US$)

19 Residuos Ciudad Lima 10,160,000 40,640,000 2,000,000

20 Residuos Huancayo 702,560 2,810,240 1,540,000

21 Residuos Chiclayo 975,000 3,900,000 2,140,000

22 Residuos Arequipa 1,550,000 6,200,000 3,420,000

23 Residuos Huaraz 136,250 545,000 320,000

13,523,810 54,095,240 9,420,000

TRANSPORTATION PROJECTSGHG

REDUCTION: TCO2/10Y

CER REVENUES, in

US$

Projects

Investment (US$)

24 Mezcla de etanol con gasolina, carburante 2,827,653 11,310,612 30,000,000

25 Corredor segregado de alta capacidad-Lima 4,077,969 16,311,876 126,000,000

6,905,622 27,622,488 156,000,000

35,573,915 142,295,660 753,905,900

SUB TOTAL: TRANSPORT SECTOR

TOTAL IN 25 PROJECTS

SUB TOTAL: WASTE SECTOR

8 CDM PROJECTS UNDER CONSIDERATION8 CDM PROJECTS UNDER CONSIDERATIONNo.

ENERGY PROJECTSGHG

REDUCTION Tco2 Eq.

REVENUES FROM CERs

(US$)

INVESTMENT US$

01 Planta Eléctrica - Bagaso 770,000 3,080,000 10,600,000

02Esquemas Aislados de Electrif icación Rural, Tocache - Bella Vista

840,000 3,360,000 15,100,000

1,610,000 6,440,000 25,700,000

RankingINDUSTRIAL PROJECTS

GHG REDUCTION

Tco2 Eq.

REVENUES FROM CERs

(US$)

INVESTMENT US$

03 Aumento del % puzolana en cemento 1,070,000 4,280,000 320,000

04 Reinyeción de metano en Talara 146,000 584,000 726,000

1,216,000 4,864,000 1,046,000

RankingFORESTRY PROJECTS

GHG REDUCTION

Tco2 Eq.

REVENUES FROM CERs

(US$)

INVESTMENT US$

05Plantación forestal con fines maderables,Selva Central

487,292 1,949,168 9,901,071

06Reforestación con Especies Locales paraPropositos Industriales Selva Baja

364,000 1,456,000 1,351,000

851,292 3,405,168 11,252,071

RankingWASTE MANAGEMENT PROJECTS

GHG REDUCTION

Tco2 Eq.

REVENUES FROM CERs

(US$)

INVESTMENT US$

07 Residuos Ciudad de Lima 10,160,000 40,640,000 2,000,000

10,160,000 40,640,000 2,000,000

RankingTRANSPORT PROJECTS

GHG REDUCTION

Tco2 Eq.

REVENUES FROM CERs

(US$)

INVESTMENT US$

08Corredor segregado de alta capacidad-Lima

4,077,969 16,311,876 63,000,000

4,077,969 16,311,876 63,000,000

17,915,261 71,661,044 142,996,142

SUB TOTAL: WASTE SECTOR

SUB TOTAL: TRANSPORT SECTOR

TOTAL IN 8 PROJECTS

SUB TOTAL: ENERGY SECTOR

SUB TOTAL: INDUSTRIAL SECTOR

SUB TOTAL: FORESTRY SECTOR

Results of NSS program: National experts in CDM

Identification of investment potential

A portfolio of projects, 3 on final approval phase

A wider awareness of the opportunities of the CDM

New actors interested in CDM:

Private companies

Consultancy companies

Banks

Important issues to be highlighted of the process: Procedure in place for national approval (45 days)

Combined work of national professionals (senior and juior) and international experts

Open strategy of involment of other actors

Presentation of final results: buyers and owners of the projects, project developers, private and public institutions, banks.

Involvement of national banks

Further inmediate steps: Convene with PROINVERSION – in process

A plan designed to promote the CDM actual projects, up date the portfolio, promote the CDM, generate capacities in baselines and the CDM cycle (capitalize and create new) – to begin in august 2003

Meetings with banks – one already requested and developed with the most important peruvian bank

Priorization of lines of action stablished in the NSS and sthregthening of the National Authority of the CDM

THANKS !

www.conam.gob.pempcigaran@conam.gob.pe

Phone: 51 – 1 - 225-5370 ext. 241