1 / 17

World Bank/KenGen Workshop on CDM Project Methodologies and Preparation October 3 & 4, 2006

CDM Contracting and Legal Issues. World Bank/KenGen Workshop on CDM Project Methodologies and Preparation October 3 & 4, 2006. Overview of Key Legal Issues in the CDM. Compliance with CDM Rules Creating and owning VERs/CERs – Issuance and Registry Purchasing VERs/CERs (ERPA).

caspar
Download Presentation

World Bank/KenGen Workshop on CDM Project Methodologies and Preparation October 3 & 4, 2006

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. CDM Contracting and Legal Issues World Bank/KenGen Workshop on CDM Project Methodologies and Preparation October 3 & 4, 2006

  2. Overview of Key Legal Issues in the CDM • Compliance with CDM Rules • Creating and owning VERs/CERs – Issuance and Registry • Purchasing VERs/CERs (ERPA)

  3. KP risks: CDM Cycle/Rules Validation (DOE) Registration (EB) Project Monitoring Verification and Certification (DOE) Issuance of CER(EB)

  4. Generation of VERs and CERs Carbon Contract CERs $$ VERs Approval of the Methodologies, Registration of the Project, Issuance of Certified Emission Reductions Verification by a Designated Operational Entity Generation of GHG emission reductions (in tonnes of CO2e]

  5. Issuance and Registry of CERs

  6. Purpose of ERPA • Record agreement • Identify responsibilities • Establish rights • Manage risk

  7. Some basics • Two parts • General Conditions - standard terms, conditions, rights/ obligations • Negotiated agreement - purchase amount, price, payment terms, preconditions, reps and warranties • VER or CER contracts (JI being developed) • Goals: consistency, flexibility, reducing transaction costs

  8. Features • Sale and Purchase agreement • Object ERs • Amount, Price and Payment • ER creation • Who does what • validation • Registration • Verification • Certification • Risk allocation - Risk is allocated to the party best able to bear it • Project risk (to be borne by Project Entity) • KP regulatory /baseline risk (to be borne by Trustee) - Market risk (shared)

  9. Key Contractual Provisions • Definitions • Payment upon delivery • Monitoring and Verification • Project Development andOperation • Events of Defaults • Remedies • Termination events

  10. Risk allocation – KP risk

  11. Key obligations related to issuance

  12. Events of Default by Project Entity • Transfer Failure • Dissolution/liquidation/bankruptcy (etc.) • Material delay in the construction • Material breach of terms of ERPA • Repeatedly failure to comply with CDM related rules • Failure to meet the requirements of the MP or EMP

  13. Events of default by Trustee - Failure to make payment - Other material breach • Remedies: - Require payment - terminate the ERPA

  14. Remedies

  15. Costs & Taxes • Costs • Deduction of project preparation / KP related costs from annual payment (caped) by Trustee in the Annual Payments • Taxes • Deduction of Host country taxes by Trustee

  16. Other significant clauses • Governing Law • English Law • Arbitration • In accordance with UNCITRAL

  17. Thank you

More Related