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Green Investment Scheme in Bulgaria

Green Investment Scheme in Bulgaria. Christo Christov, Energy Institute, Bulgaria Workshop Facilitation Green Investment Scheme: first lessons learnt and the way forward April 24-25, 2008, Budapest, Hungary. Opportunities for Bulgaria. Surplus of AAUs

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Green Investment Scheme in Bulgaria

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  1. Green Investment Scheme in Bulgaria Christo Christov, Energy Institute, Bulgaria Workshop Facilitation Green Investment Scheme: first lessons learnt and the way forward April 24-25, 2008, Budapest, Hungary

  2. Opportunities for Bulgaria Surplus of AAUs Potential for Bulgaria to trade AAUs: Approximately 30 mill t CO2 e / year Potential for Greening AAUs in Bulgaria could be 75 million tons of CO2e Emission Reductions for 5 years period

  3. Potential of Bulgaria to realize ER • District heating & cogeneration – 50 mill t CO2 • Energy efficiency – 11 mill t • Renewable energy – 7 mill t CO2 • Waste management – 3 mill t CO2 • Fuel switch – 3 mill t CO2 • Forestry – 2 mill t CO2 • Total – about 75 mill t CO2

  4. Benefits for Bulgaria • Additional financing sources – compliance with commitments and real projects • Additional flexibility compared to JI projects • Avoidance of EU ETS Double accounting of the Emission Reductions • Achievement of emission reductions in the most efficient manner

  5. WB Study for Bulgaria on GIS, 2004 • confirmed the feasibility of a GIS • recommended various options for establishing and implementing a GIS • received favorably across the various sectors and Ministries - seminars, comments • recommended a multi-sectoral investment program under the GIS

  6. In early 2005 the BG Government was committed to moving forward with a GIS as quickly as possible The Government promised: • to take all necessary measures to implement GIS • to work with multilaterals, bilateral agencies, private sector and local stakeholders in this regard • to design the GIS to use flexible financial instruments to provide support for eligible projects – soft, hard, JI

  7. AAU-based Green Investment Scheme understanding in Bulgaria (2004 -2005) • Long term financing facility which links transfer of AAUs through 2012 with emission mitigation activities and projects through and beyond 2012 • Selling country to assure buyers that proceeds from sale of AAUs would be used to finance agreed Green Investment Scheme (GIS) and adopt suitable monitoring and verification measures • Buying country(ies) to provide financing for GIS per the terms of contract

  8. Bulgaria GIS Study, 2004 - Findings • Bulgaria is well positioned to establish a GIS • GIS can be implemented without requiring new law(s) • Establishment of a GIS can proceed without delay • Central heating, waste management, energy efficiency, have potential for producing emission reductions of 50-60m tones between 2005-2020 • Forestry can also produce large benefits • Bulgaria can offer an attractive GIS (with an initial consideration for sale of AAUs around 25 million tons in first tranche) • See full report at www.moew.government.bg

  9. GIS Considerations for Bulgaria 2005 • GIS structure should cover all management costs without depending on government budgetary resources • GIS should be flexible to ensure financing of public/private sector projects and PPP initiatives using market friendly instruments • GIS should be flexible to accommodate bilateral and multilateral negotiations and preferences in implementation

  10. GIS Recommendations, 2005 • Bulgaria is the most attractive JI Country and is the pioneer in formulating a GIS backed AAUs (Point Carbon) • Establishment of a GIS with an initial size of euro 250 to 350 million is feasible • Existing ECO Trust Fund with good track record is an attractive option to set-up and manage GIS • Additional “Fund Management” support to ECO Trust Fund through experienced commercial banks which can raise new financing and also provide own financing • Establishment of an AAU Management Function which coordinates all activities involving AAUs

  11. Proposal of WB Group for Assistance • Facilitating discussions and negotiations between the government & buyer(s) • Assist with the establishment and launching of a complete GIS framework that meets buyer(s) requirements and Bulgaria’s needs • Financial assistance to GIS in the form of loans and/or guarantees • Technical Advisory services for GIS • Capacity building for Art.17 eligibility

  12. Closing The Compliance Gap • EU countries, Canada and Japan have expressed interest in AAUs only as long as the investments are linked to emission reduction activities (“Greening AAUs”) • The requirement for Greening of AAUs would reduce the amount of AAUs that can be offered substantially - by as much as 50% or more

  13. Bulgaria 2005 - 2008 Nothing was done for establishment of GIS WHY? • The current Government considers AAUs trading applicable without greening • GIS would just limit the freedom of the Government to utilize the proceeds from AAUs sale for other than emission reduction purposes • AAUs banking for the next (2013 – 2020) period is considered as well.

  14. THAK YOU FOR THE ATTENTION !!!

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