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Landfill gas projects in Brazil:
Financial solutions
• Feasibility of landfill projects in Brazil
• Financing (On-Balance)
• Financing (Off-Balance)
210/09/2019
Table of contents
310/09/2019
What determines the financial feasibility of landfill gas projects?
Main income streams:
• Gate fee
• Government support
• Electricity sales
• Certificates (e.g. CDM, RECs,
CBIO)
Expenditures:
• Fees, taxes and customs
• Site preparation
• Gas collection and treatment
• Power generation
410/09/2019
How does traditional financing with certificates work?
Investor
Validation and
Verification
Greenhousegas reduction
Rehabilitation
Carbon Credits
ERUs or CERs
510/09/2019
Example cogeneration landfill gas in Nanjing / China
Nanjing
Installed power output : 2.528 kW el.
Reduction:
CO2 reduction potential : 0,463 t/MWh
1,15 t CO2 /h
9.363,7 t CO2 /a*
Additionally CH4 potential for CH4 not going
in the atmosphere approx. 30. 000t/MW/a
GWP of CH4 21 times higher than CO2
100.000t/a multiplied with the CO2 price/t
610/09/2019
What are other financing options?
Solutions
• Over the counter business of CDM certificates still gives reasonable income
• Institutions and private companies looking for certificates
• Other certificate-based financing (RECs, CBIO, CDM Gold Standard)
• Government supported financing and equity (KfW-DEG, BNDES)
• Climate Bonds
• Crowdfunding
• Leasing/Contracting
• Traditional financing options like
- Private equity
- Senior debt
- Export credit
710/09/2019
What are Climate Bonds?
• Climate Bonds were created to fund projects that have positive environmental
and/or climate benefits.
• For the creation of the bonds, the projects are checked by an independent
validator and certified.
• The Climate Bonds were invented only a few years ago and enjoy a steady
growth in the market.
810/09/2019
How can Climate Bonds be created?
• Become partner at standardisation entity
• Establish documentation to achieve bonds
• Hire validator to check documentation
• Get certified
• Hire bank or other entity to distribute bonds
• Achieve proceeds
• Hire verifyer to check if standard measures were kept
910/09/2019
Which criteria have to be fulfilled?
• Technical criteria
• Project must proof to be sustainable by measurable parameters
• Financial criteria
• Total transparency and accountability of the funds
• Sector criteria (for each sector different)
• Guidelines must be met (e.g. environmental and construction)
1010/09/2019
What are the main cost factors?
• Partnership standardisation entity - 0,0065%-
• Certification fee (for €100 Million) - 0,001%
• Validator services approx. - 0,01%
• Verifying service approx. - 0,01%
• Bank fees (for €100 Million) - 0,25%
(to be evaluated)
• Interest of the bond - 3%
• Compensation consultant - 1%
Total 4-5%
1110/09/2019
What are the advantages of climate bonds?
• No investor as equity provider in the company
(therefore no sales of shares necessary)
• Once bond is paid back 100% no other obligations
• Obligations are well known in advance
(fixed interest, fixed payback time)
• Flexibility
(bond conditions can be adjusted to the project)
• Off-balance possible
1210/09/2019
What are the risks of Climate Bonds?
• Project doesn‘t meet criteria of Certification body
• Bonds cannot be distributed
• Project fails
A group of high-qualified and experienced
implementing partners will eliminate those risks
1310/09/2019
What are financing optimisation possibilities?
• Purchase your own bonds on secondary market
• Sell bonds a second time if necessary
1410/09/2019
Ficaríamos contentes por uma cooperação!!!
Ulrich Sawetzki
Tel.: +491739067730
www.powerlinkinvest.com
Obrigado pela atenção!!!!
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