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EUROPEAN CARBON FUND ™

EUROPEAN CARBON FUND ™. The first carbon fund structured and managed by major financial institutions. www.europeancarbonfund.com. Managed by: . Agenda. ECF presentation Recent Carbon market evolutions Our Strategy for Asia. ECF definition.

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EUROPEAN CARBON FUND ™

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  1. EUROPEANCARBONFUND™ The first carbon fund structured and managed by major financial institutions www.europeancarbonfund.com Managed by:

  2. Agenda • ECF presentation • Recent Carbon market evolutions • Our Strategy for Asia

  3. ECF definition • European Carbon Fund (ECF) is a financial fund, designed and operated by major EU financial institutions, dedicated to purchase Carbon Credits.

  4. ECF shareholders: large financial institutions – 142.7M€

  5. ECF manager: IXIS Environnment & Infrastructures • IXIS Corporate & Investment Bank is Groupe Caisse d’Epargne’s corporate and investment banking arm and a leading player on capital markets. French saving Banks are France 3rd bank. • IXIS CIB is present worldwide through its Paris headquarters, branches in Frankfurt, London and Tokyo, and subsidiaries in New York and Hong Kong. • S&P AA

  6. EU Carbon Market: VOLATILITY!

  7. 2006 Transactions (6 months): Approx.10Mt CO2 purchased 1,210,000 CERsN2O - Brazil Feb 06 250,000 ERUsBiomass - Lituania Jan 06 1,210,000 CERsN2O - Korea Feb 06 3,600,000 CERsLandfill - Argentina Mar 06 540,000 CERsWind - China May 06 2,500,000 CERsSwine - Brazil Jun 06 1,080,000 CERsStraw - China Oct 06 17,800,000CERsCMM - China Nov 06

  8. ECF purchasing strategy • Today, China is under-represented in our portfolio • ECF will invest 80-150M€ in Carbon Assets in China in the next 2 years • Volumes contracted: 100,000t/y to 5,000,000t/y • Portfolio approach: diversification of technology and counterparty • Strong sustainable development criteria expected

  9. From a carbon seller perspective:risks • Risks of selling carbon • Volatility of prices • Contractual clauses (penalties, event of default…) • Lack of experience, generally first deal • Sometimes unreliable counterparties

  10. From a carbon seller perspective: rewards • Carbon credits can enhance the profitability of environmental-friendly projects in Asia • Need to find a reliable partner… • … that can harness or mitigate: • Regulatory risk • Counterparty risk • Delivery risk • Market risk

  11. Conclusion • ECF has closed 4 deal in China, and has a robust pipeline of projects to be concluded in the coming months • ECF is a reliable partner for purchasing the carbon credits • ECF has been created by leading EU financial institutions to absorb risks within a portfolio strategy • ECF buys CER, whatever the market conditions

  12. EUROPEANCARBONFUND™ The first carbon fund structured and managed by major financial institutions LI Chaochina@europeancarbonfund.com www.europeancarbonfund.com Managed by:

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