Progress with Portfolio Development

Prototype Carbon Fund

July 2002

Projects Portfolio Development

• Project selection and Portfolio development criteria– Bank and Kyoto Protocol standards– Focus on renewables and energy efficiency– Carbon purchase: $ 3-15 m (total investment: $15-100 m)– Geo-political diversity in projects

• Pipeline development strategy– Responding to demand in Latin America – Developing a deal flow in Africa, Eastern Europe and, of

late, in South Asia– Increasing emphasis on developing deal flow in East Asia

• Current Pipeline– 45 projects under development with potential carbon

financing of $300-350 million– As of June 2002, over $ 90 million in 21 project approved

by investment committee

Carbon Purchases Finalized

• Output Target for FY 2002: 11 projects (not including Latvia) with carbon purchase agreements

• Status as of July 2002• 14 ERPAs with completed Validation:

• Latvia, Brazil, Chile, Uganda, Romania, Poland (Stargard and Pisz) and Czech Republic (Thomayer and Rozmital), Costa Rica, Nicaragua.

• Nearing Completion: 4 more deals by end October, 2002.

• Bulgaria Svilosa Wood Waste to Energy, Durban MSW, Poland Kolo Geothermal, Guatemala Hydro.

• Pipeline exceeds $150 million of carbon purchases under preparation.

Status of Approved Projects (1)

• Latvia: $2.5 million PCF Purchase– anaerobic decomposition of about 20,000 tons of garbage a

year– ERs from the existing landfill site gas recovery by June

2002

• Uganda: $3.9 million PCF purchase– a 5.1 MW and 1.5 MW small hydro generating facilities in

the West Nile region– Displaces >200 small and few large public diesel gensets

• Chile: $6 m PCF Purchase– 26MW run-of-river hydro generating 175 GWh to

replace coal/gas• Brazil: $5 mm of PCF Purchase

– Substituting coal/coke by sustainably produced charcoal in pig iron production, plus afforestation and ecosystem restoration, biodiversity and health benefits

Status of Approved Projects (2)

• Czech Republic– Small energy efficiency projects with the Czech Energy

Agency and the State Environment Fund

• Poland heat and power applications– 2 geothermal and 1 biomass waste district heating project– About $3 million of emission reduction; more projects due

• Costa Rica: $10 million PCF Purchase “umbrella”– Consists of 1 hydro rehab and 2 windfarms (total of 18 MW). – Sectoral baseline and MVP to be finalized and validated in

November, 2001

• Colombia Jepirachi Windfarm: $ 5 million PCF purchase– 19.6 MW windfarm with on Wayuu land with substantial

social benefits

• Nicaragua: $700,000 PCF purchase– 1.4MW rice-husk fired power plant displacing diesel power

Concluded deals as of June 2002…

Country

PCF Contract US$ mil

Cumulative contract

PCF ERPA ER TCO2e

Total ER for the project TCO2e

1 Latvia 2.5 2.5 0.37 0.37

2 Chile Chacabuquito 6.7 9.2 1.75 2.60

3 Uganda 3.9 13.1 1.30 1.88

4 Brazil 5.3 18.4 1.51 8.42

5 Romania Afforestation 3.1 21.5 0.95 1.06

6 Czech R: CEA 2.6 24.1 0.65 0.01

7 Czech R: SEF 2.6 26.7 0.65 0.02

8 Poland: Stargard geothemal 1.0 27.6 0.33 0.36

9 Poland: Pisz biomass 0.5 28.2 0.17 0.19

10 Costa Rica: Cote 0.6 28.8 0.10 0.17

11 Colombia Jepirachi 3.2 32.0 0.80 1.46

Total 32.0 8.6 16.5

…expected by end of September 2002

Country PCF Contract US$ mil

Cumulative contract

PCF ERPA ER TCO2e

Total ER for the project TCO2e

12 Costa Rica: Chor. 0.91 32.90 0.26 0.3013 Costa Rica: Vara Blanca 0.99 33.89 0.28 0.3314 Nicaragua rice husk 0.70 34.60 0.25 0.4615 Mauritius Waste 5.00 38.20 1.65 2.3116 Guatemala - Hydro 7.00 45.20 2.00 2.4017 Poland - CHP 3.50 48.70 1.00 1.4918 Africa MSW 10.00 58.70 1.50 6.61

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

2002 2005 2008 2011 2014 2017 2020

Schedule of delivery of emission reduction from PCF projects

FY02 Pipeline Technology Distribution

Wind19%

Pico1%

Small hydro12%

Geo-thermal

6%

Gas flare Reduction

7%

Energy Efficiency

11%

Biomass (e.g. Wood Waste, Rice Husks)

18%

Sugar-Cane Bagasse

Cogeneration6%

Municipal Waste to Energy

20%

Latin America

Eastern and Central Europe

Africa Central and South Asia

East Asia

Wind C Rica, Colombia, Honduras, Mexico

Morocco Sri Lanka

Hydro Chile, CRica, Guatemala, Colombia

Uganda

Waste Brazil Latvia, CzechR

Mauritius India

Bagasse El Salvador, Guyana, Mexico

Kenya, Swaziland

India Thailand, Vietnam

Biomass Brazil, Nicaragua

Bulgaria, Poland

Thailand

EE CzechR, Poland, Bulgaria, Romania

Uzbekistan

Gas Flaring

Peru Kazakhstan

Indicative Allocations for Regions

Allocation guidance as of Feb. 2001

Allocation for $180 fund

CDM 85 (59%) 105 (58%)

Latin America 30 (21%) 35 (19%)

Africa 15 (10%) 20 (11%)

C&S Asia 20 (14%) 25 (14%)

East Asia 20 (14%) 25 (14%)

East. Europe/ JI

60 (41%) 75 (42%)

Total 145 180