How to develop a JCM project Keni Atika Indonesia JCM Secretariat - PowerPoint PPT Presentation

How to develop a JCM project Keni Atika Indonesia JCM Secretariat

Presentation outline • Financing support from the Government of Japan • JCM project cycle

FINANCING SUPPORT FROM THE GOVERNMENT OF JAPAN

Developing a JCM Project Apply JCM financing Develop programme consortium & develop (Joint methodology Find Venture, etc.) Indonesian Japanese entity submits partner application (in Japanese) Sample document of “Agreement on Develop International Consortium (Example)” business • Through workshop & Secretariat idea • Project Idea Note (PIN) • Secure finance other than JCM or • Find another financial source for the rest of initial cost (JCM financing programs will not cover all cost, e.g. JCM Model Project 4 covers less than half of the investment cost) Source: IGES, 2016

How we accommodate the involvement of private sectors to join us? Private Sectors from Japan Share information to private sectors Secretariat from Japan Side Submit project / study idea (PIN recommended) Private Sectors from Japan Convey to Convey to Indonesia Japan side side Private Sectors from Indonesia Submit project / study idea (PIN recommended) Secretariat from Indonesia Side Share information to private sectors Private Sectors from Indonesia

IGES’ JCM Matchmaking Platform Institute for Global Environment Studies (IGES), provides a matchmaking platform for companies from Japan and host countries. Through this platform, interested companies can find partner(s) to develop JCM projects. The platform can be accessed through: http://jcm-matchmaking.iges.jp/#tab_home

JCM Model Project (MoEJ) ※ Includes collaboration with The draft budget for projects Government of starting from FY 2016 is projects supported by JICA and Japan 6.7 billion JPY (approx. USD 56 other governmental-affiliated million) in total by FY2018 financial institute. Finance part of an Conduct MRV and expected to ※ Budget will investment cost deliver at least half of JCM be fixed after approval by the credits issued ( less than half ) Parliament International consortiums (which include Japanese entities)  Scope of the financing: facilities, equipment, vehicles, etc. which reduce CO2 from fossil fuel combustion as well as construction cost for installing those facilities, etc.  Eligible Projects : starting installation after the adoption of the financing and finishing installation within three years. 7 Source: Ministry of Environment Japan, 2016

ADB – Japan Fund for JCM Scheme To provide the financial incentives for the adoption of advanced low-carbon technologies which are superior in GHG emission reduction but expensive in Asian Development Bank (ADB)-financed projects. Purpose To develop ADB projects as the “Leapfrog” developments by the advanced technologies and to show the effectiveness of the JCM scheme by the acquisition of credits of the JCM. JCM Credits GHG Emission ADB Reduction MRV Additional costs with Grant JFJCM adoption of MOEJ advanced low-carbon (Trust Fund) technologies Loan/ Grant etc. OCR/ADF* Mitigation through Co- conventional financing technologies Loan/ (Selection from Other financial Grant etc. pipeline projects) institutions and funds 8 Project

JFJCM funding scheme Grant & interest subsidy General eligibility Sovereign/public sector Project co-financed with Maximum grant of $10 million or 10% of the an ADB or ADB- project cost, whichever is lower, or $5 million administered funds with if the project cost < $50 million proven advanced low- carbon technologies Non-sovereign-Project Owner Interest subsidy up to $10 million or 10% of Leads to a reduction of the project cost, whichever is lower environmental pollution and/or other social Non-sovereign - Local Financial Institution economic benefits Interest subsidy further reduces financing cost of host country financial institutions (banks, ESCOs, leasing companies) 9 Source: IGES, 2016

JCM Demonstration project (METIJ) Funded by Ministry of Economy, Trade & Industry Japan and implemented by New Energy and Industry Technology Development METI/NEDO Technology provider from Japan Project participant in Indonesia Funding provided up to more than 50% from the investment • Coverage of funding: Cost of the JCM Demonstration project necessary MRV e.g. cost of design, machinery, material, labor travel, etc. • Within certain period, the equipment will be owned by METI, subsequently it will be transferred to the participant • Establishment of Joint Venture is not mandatory

JCM PROJECT CYCLE: WHAT YOU NEED TO KNOW AFTER YOU RECEIVE THE JCM FINANCIAL SUPPORT

JCM Project Cycle Submission of Project Participant / Each Government Proposed Joint Committee Methodology Measurement Approval of Joint Committee Proposed Methodology Development Project Participant Can be conducted by the same TPE * of PDD Can be conducted simultaneously Third Party Entities Validation Reporting Registration Joint Committee Monitoring Project Participant Verification Verification Third Party Entities *PDD: Project Design Issuance Joint Committee decides the amount Document of credits Each Government issues the credit 12

Measuring emission reduction in JCM Indonesia domestic emission reduction Emission reduction credited by JCM JCM utilizes reference emission based calculation 1. In the JCM, emission reductions to be credited are defined as the difference between reference emissions and project emissions. 2. Reference emissions are calculated below business‐as‐usual ( BaU) emissions which represent plausible emissions in providing the same outputs or service level of the proposed JCM project in the host country. 3. JCM approach will ensure a net decrease and/or avoidance of GHG emissions. 4. The value of Reference Emissions in JCM depends on the methodology. Therefore, the value can be equal or different with Baseline Emission.

Methodology in JCM • JCM methodologies should cover these 3 elements: Emission reduction measurement Eligibility criteria Monitoring method method • The methodology is designed according to the type of applied technology. 1 methodology is applicable for many projects which utilize the same technology

SDIP and SDIR Sets out a plan of the JCM project to Sustainable Development contribute to sustainable development Implementation Plan (SDIP) based on ex-ante analysis Sets out the achievement of SDIP Sustainable Development implementation for a particular monitoring Implementation Report method (SDIR) 7 sustainable development items considered in JCM: Environmental Pollution control Safety and health Natural Environment Impact Assessment and Biodiversity Social Environment and Technology Economy Community Participation

Developing PDD in JCM PDD Monitoring PDD form form Estimated Project Selection of emission EIA (if any) LSC result Ex-ante data Ex-post data explanation methodology(ies) reduction PDD sets out in detail , in line with the JCM rules and guidelines, the JCM project which is to be realized. - TPE validate PDD Indonesia JCM Indonesia Joint Project Participant (PP) - TPE receive and check the Secretariat Committe completeness of implementation plan Submission of validation report by PP Submit PDD for public input

Validation and verification with TPE • TPE are selected by the project participants to validate and/or verify their PDD and/or emission reductions. • Requirements/Eligibility: – Candidate entities are either: (a) Accredited under ISO 14065; or (b) Designated Operational Entities (DOEs) under the UNFCCC CDM – Candidate entities have sufficient knowledge of the JCM between the Republic of Indonesia and Japan by reading and knowing all applicable rules and guidelines of the JCM. • Eligible entities can apply as TPE for JCM in each host country separately – Candidate entity submit application form and related document stated in Guideline for TPE to JCM Secretariat of Japan and Indonesia (id-jc-secretariat@jcm.go.jp and secretariat@jcmindonesia.com )