1. RE CDM opportunities in South East Asia; status and potential Ingo Puhl, Managing Director, 500 PPM GmbH Contact:[email_address] Bangkok, May 2006

2. Outline

Introducing 500 PPM

RE CDM potential in South East Asia (SEA)

Barriers to RE CDM project implementation in SEA

Solutions to increasing RE CDM deal flow in SEA

3. Introducing 500 PPM: turn key partner for carbon asset origination & transaction

CDM project co-development

• Total life-cylce partner for origination & placement using distributed risk approach

Optimizing carbon performance

• Structuring through technology suppliers, portfolio management, third parties

Facilitating carbon finance arrangements

• Reducing construction finance needs through up-front payment & securitization

Carbon asset sales

• Bilateral negotiation w/ suitable buyers according to client needs re: counterparty risks, upfront payments, fixed vs. indexed pricing, delivery guarantees

• Listing agent services for sales via carbon asset exchange (used by top buyers)

Presence in Asia

• Office in Bangkok, Thailand (through CDM Solutions Ltd)

4. RE CDM project types are well established [NM69]: Fuel switching from fossil to biodiesel Biofuels AMS I: Small scale renewable energy ACM2: Grid connected electricty from renewables Solar, wind AM6: Biogas power from swine manure AM13:Biogas power from open anaerobic lagoon waste water treatment systems AM22:Biogas for drying & power at starch factory AMS I, III: Small scale renewable energy and methane avoidance Biogas ACM6: Grid connected electricity from biomass residues AMS I, III: Small scale renewable energy and methane avoidance Biomass Approved method Project type 5. RE CDM potential in SEA is large Note: Based on calculation from ALGAS 5 5 27 43 Philippines 15 17 75 157 Indonesia 10 3 48 28 Vietnam 11 9 55 80 Thailand Biomass & biogas RE except Annual emission reduction potential [Mil. T CO2eq] CO2 from agriculture [Mt CO2eq] CO2 from energy [Mt CO2eq] Emissions & reduction potential 6. Sustainable development benefits of potential RE CDM projects are attractive

Environmental

• Reduced combustion of fossil fuels and pollution reduction

• Clean water (for waste water treatment projects)

• Green power

Economic

• Improved trade balance (reduced import of fossil fuels)

• Rural income generation (sale of biomass, maintenance of off-grid power systems)

• Carbon credits make RE projects financially viable

Social

• Employment (operation & maintenance of project facilities)

7. Considering RE CDM potential, SEA lags behind in project identification & approval 501 62 744 World 18 0 0 0,31 21 Philippines 10 58 1 1,18 10 Malaysia 4 0 0 0,89 6 Indonesia 4 0 0 0,16 4 Vietnam 11 0 0 1,2 12 Thailand No of RE projects ER from registered projects No of registered projects ER validated projects [MtCO2e pa] No of validated projects Country 8. For example: SEA is not on the CDM map: countries represented at Carbon Expo 06 9. Why is SEA not on CDM map?Typical barriers

Lack of demonstration projects

• Small spectrum of projects within country context

Low risk bearing capacity

• Smallish operators are not willing to bear CDM risks

Inadequate information transfer mechanisms

• Unawareness re: benefits from CDM remain

• Information distribution through banks, DNA, intermediaries, technology providers

Lack of financial intermediation to take early project risks

• Financial services to take around early CDM related costs lags behind (i.e. compared to Latin America, India, China)

Lack of DNA approval and CDM promotion

• SEA has 6% of validated projects but only 1,6% of registered projects

10. Solutions to improved RE CDM deal flow

Energy security and trade balance arguments are key driver for increased CDM awareness and streamlining approval procedures.

Streamlined procedures and fast approval will bring an increasing number of CDM risk takers to SEA carbon market.

Increasing number of approved projects will multiply domestic and international interest in the local markets.

Ongoing and participation in new CDM capacity building projects can accelerate these developments.

11. Identified potential RE CDM project opportunities in Thailand 2550 48 53 1140 830 480 ER potential [in 1000 CER p.a.] 74,6 Investment [Mil. EUR] 24 Total 1 Palm oil producers 3 Papermills 9 Agroindustries 6 Destilleries 5 Breweries No of projects in Thailand Sector 12. Contact information

500 PPM

• Ingo Puhl, Managing Director

• [email_address]

• Phone

• Global (Germany): + 49 721 4519 280

• Asia (Thailand): + 66 6 778 2869

Thank you for your attention.