GeneralOutlinesofJap anCarbonFinanceLtdby JBICMrKi

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March 2005 General Outlines of Japan Carbon Finance, Ltd.　 JCF

１．Summary: 

１．Summary (1) Objective: To purchase CERs and ERUs （ERs） issued for the crediting period until 2012 from CDM/JI Projects (2) Fund Pool: Called “Japan GHG Reduction Fund (JGRF)”, which JCF can utilize to purchase ERs (3) Committed Fund Amount: Approx. USD 140 million (4) Establishment: December 1, 2004　 (5) Location: Tokyo, Japan

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(6) Fund Providers: Major Japanese Private Enterprises & Policy-lending Institutions JCF was established by some of Major Fund Providers including Japanese Policy-lending Institutions

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(7) Project Development Cost (PDD Preparation, Validation, etc.): To be borne by JCF in principle with a certain ceiling (8) Timing of Payment : Payment on Delivery in principle (Upfront Payment is to be made on case-by-case basis) (9) Purchase Price: To be decided on project-by-project basis through Project Selection Process (10) Project Information Notes (PINs) : Submission of PINs to JCF are welcome in any time & any form (JCF is happy to provide own PIN form if requested to e-mail address: jcf@jbic.go.jp)

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(11) Project Screening Criteria: Inclusive of Fulfillment of Kyoto Rules, Additionality, Environmental & Social Safeguard Requirements, Project Feasibility, Contribution to Sustainable Development of Host Country, Portfolio Guideline, etc. Portfolio Guideline; 　 *Sector: “Sectoral Scopes” listed in UNFCCC web site which include A) Renewable Energy, B) Waste Handling and Disposal, C) Manufacturing Industries (Energy Efficiency, Fuel Switching, etc.), D) Fugitive Emissions, E) Chemical Industries, F) Agriculture, etc.

ERs Purchase Structure: 

CDM/JI Project Entities (ERs Seller) Japan Carbon Finance, Ltd. (ERs Buyer) Japan GHG Reduction Fund (Fund Pool) Relationship between JCF & JGRF ERs Payment Payment ERs Emission Reduction Purchase Agreements (ERPAs) Emission Reduction Resale Agreement ERs Purchase Structure

2. Advantages for Projects: 

2. Advantages for Projects (1) Additional Cash Flow: Project Viability to be improved by Cash Inflow in USD under ERPA (2) Development Function: JCF will provide assistance and orientation to develop CDM/JI projects. (3) Possibility of Co-purchase: Fund Providers for JGRF may purchase a part or all of the remaining ERs after the purchase by JCF.

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(4) Collaboration with and Support from JBIC & DBJ: At present approx.50 projects are, on a pre-screening list, gained through JBIC/DBJ networks Strong ties with Japanese Government issuing Written Approvals for CDM/JI Projects Cooperation and strong ties with Host Governments and Development Financial Institutions Underlying Financing from JBIC, such as; A) Export Loan, B) Overseas Investment Loan, C) Untied Loan, D) ODA Loan, etc.

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JBIC CDM/JI Projects Example Model for Underlying Finance provided for CDM /JI Projects by JBIC Underlying Finance 　（On-Lending Scheme） Fund Provision Purchase of CER (Carbon Finance) 　　　　　　　　　Direct Loan 　Underlying 　 　Sponsorship 　Finance 　　　 (Equity, etc.) Companies in Power /Energy Sector, etc. Intermediary Financial Institution JCF Cash Inflow during Construction Period Cash Inflow during Crediting Period

JCF/JBIC Collaboration Scheme : 

JCF/JBIC Collaboration Scheme CDM/JI Project (ERs Seller) JBIC DBJ Japanese Company A Japanese Company B Japanese Company C Loan Agreement (L/A) Emission Reduction Purchase Agreement （ERPA) *Fund Provision through JGRF JBIC Japanese Commercial Banks JCF （ERs Buyer) Financing for Capital Expenditure and long–term Working Capital during the Construction Period of the Project Payment for ERs generated during the Crediting Period of the Project ・・・・ * * * * *

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JCF Execution of ERPA Operational Flowchart Evaluation & Selection of Project Execution of Letter of Intent (LOI) which defines basic terms & conditions Project Entity/Sponsor Submission of PIN Clarification & Screening of PIN PDD Preparation Validation & Registration Assistance & Orientation to develop Project Exclusivity Period for ERPA Execution

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Key Criteria at Screening of PINs Project Description and Project Participants Fulfillment of Kyoto Rules: Methodology (Baseline Study & Monitoring Plan) Validation (Methodology Applicability, Data, Quality Control, etc.) Possibility of Authorization & Approval by Host Country Stakeholders’ Comments Additionality (Investment Analysis/Barrier Analysis and Common Practice Analysis, etc.) Environmental & Social Safeguard Requirements: Compliance with Laws & Regulations, etc.

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Project Feasibility: Construction Plan, Business Plan and Fund-raising Plan Project-related Contracts Concession/License & Permits Creditworthiness and Competence of Project Sponsors Experiences of Management and/or Project Operator Commercially Viable Proven Technology Financial Viability (Cash Flow Projection, Sensitivity Analysis, etc.) Contribution to Sustainable Development of Host Country (Environmental, Social & Economic Impacts, Technology Transfer Effects, etc.) Portfolio Guideline and Purchase Conditions

For More Information, Contact: 

For More Information, Contact Japan Carbon Finance, Ltd. 1-3, Kudanshita 4-chome Chiyoda-ku, Tokyo 102-0073, Japan Carbon Finance Department Deputy Director General: Mr. Joichi Kimura TEL: 813-5212-8877 FAX: 813-5212-8886 E-mail: j-kimura@jcarbon.co.jp Japan Bank for International Cooperation (JBIC) Representative Office in Bangkok TEL: 66-2-252-5050