Private and confidential - Department Of Energy Bank... · –CDM and carbon trading: cash flow ......
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Private and confidential Climate Finance at Standard Bank June 2011
Transcript of Private and confidential - Department Of Energy Bank... · –CDM and carbon trading: cash flow ......
Private and confidential
Climate Finance at Standard Bank
June 2011
Private and confidential
Standard Bank’s Activity in Climate Finance
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3Climate Finance is Growing
� Climate (or carbon) finance:
– CDM and carbon trading: cash flow in time
– Climate/carbon finance: financing the project now
� $90b in CDM-related investment globally 2009
– Africa 3% but massive pressure to increase this
� Increasing focus on climate and carbon finance
– $100b/year climate finance target by 2020
– Development banks increasingly desperate to be seen to be funding ‘climate action’
� Africa is a key focus area for climate finance
4Standard Bank in the Carbon Markets
CD
M P
roje
ct
Trad
ers
& F
unds
Com
plia
nce
Buy
ers
Finance
� Project
� Transactional
� Structured
Origination
� Primary
Structuring
� Purchase
� Distribution
� Trading
� Structuring
Trading
� Primary
� Secondary
� Structured
Structuring
� EUA/CER Swaps
� Repo Financing
Risk Management
� Cross Commodity
Com
plia
nce
Buy
ers
Private and confidentialWhat are we doing at Standard Bank?
� Been doing carbon finance since 2002 and a major player globally. Our major focus is on SA and Africa
� In 2010, Standard Bank:
– Completed transactions putting approx R7 billion into emission reductions
– Traded around 100 million carbon credits
� For the future:
– Setting up open access PoAs so that everyone can benefit from carbon revenues: efficient lighting, solar water heaters etc
– Pioneering new financing structures: ESCO finance, green bonds, carbon –collateralised lending, NAMAs
6A selection of our transactions in Q1 2011
Private and confidential
A Selection of Financing Structures
8Access to Carbon Revenues: Establishing the Revenue Stream
� Standard Bank regularly completes the CDM registration on behalf of our clients, providing access to revenues that they would otherwise not benefit from
� We are one of the world’s most experienced banks in the CDM and are bringin experience and business to SA
� We are working to maximise South Africa’s access to carbon revenues
– Regional emissions methodologies
– Open-access programmatic CDM
Programmatic CDM registered by SB
Individual Activities
Individual Activities
Individual Activities
9Latest Deal
Standard Bank Group and Frontier Carbon join forces to benefit clean development
Frontier Carbon, the London-based green asset developer, announced the formation of CarbonSoft Corporation, a carbon trading platform with the single aim of putting the carbon market in the hands of entrepreneurs, NGOs and companies in Africa and Asia.
With a principal focus on solar lamp micro-projects, CarbonSoft will provide access to carbon credit revenues for project developers seeking to build low-carbon, sustainable projects, but who face real challenges in accessing the benefits that the carbon markets have created. CarbonSoft will have a broad geographic scope and cover many countries in South, East and West Africa as well as India and parts of South East Asia. countries in South, East and West Africa as well as India and parts of South East Asia.
Under this agreement Standard Bank will provide distributors of solar lamps with non-discriminatory access to the means to generate carbon credits from solar lamp projects via a programmatic Clean Development Mechanism (CDM) system. The benefits of switching from kerosene fuelled lighting to solar lamps are tangible, with families in East Africa saving up to 25% of their annual incomes and improving health through reducing burn injuries and avoiding inhalation of kerosene gas.
“CarbonSoft expects to work with a wide range of partners to significantly increase access to high quality solar lighting systems for some of the 2 billion people who live at the bottom of the pyramid,” says Sebastian Foot, Director of CarbonSoft.”
10Pre-Paying the Revenue Stream
Standard Bank(Carbon)
Prepayment againstCarbon Credits
Carbon Credits (under ERPA)
CarbonProject Owner
Standard Bank Finance
Term Loan
11Risks associated with carbon projects
12Structured Deals: Tranching and Prepayments
13Other Carbon Finance Initiatives
� Concessional loans
� Energy efficiency finance products
– Pay up front cost with repayments in line with energy savings
– Actively setting up carbon revenues to help
� Leading development of wholesale climate finance products including green bonds
� And we are continuously developing more….
14African Carbon Asset Development Facility
� Technical assistance
� Training in carbon finance for other financial institutions
� Grants
15Contacts
Geoff Sinclair
Head of Carbon Sales & Trading
Lawrence Cole-Morgan
Manager, Structured Finance
Karin Ireton
Director, Sustainability
