The Case of China CDM FundThe Case of China CDM Fund

XIE FeiXIE Fei

Director, Revenue Management DepartmentDirector, Revenue Management Department

China Clean Development Mechanism FundChina Clean Development Mechanism Fund

September 7, 2012 Bangkok, ThailandSeptember 7, 2012 Bangkok, Thailand

-- focusing on the type of fund, -- focusing on the type of fund, governing body and capitalgoverning body and capital

Rationale of Establishing China CDM Fund

Unique Points of Chinese CDM Policy:

The Measures for Operation and Management of CDM Projects in China stipulates that the revenue generated by Chinese CDM project is shared by the government and project owner. Because the resource of GHG emission reduction is owned by the government.

The government sharing, called as national revenue, is put in China CDM Fund, specifically supporting climate change activities.

China CDM Fund at a glanceChina CDM Fund at a glance Establishment: November 2007. Establishment: November 2007.

Objective: To support China’s efforts in tackling climate Objective: To support China’s efforts in tackling climate change and promote sustainable development. change and promote sustainable development.

Governing body: Governing body: Board of China CDM Fund; and Board of China CDM Fund; and China CDM Fund Management CenterChina CDM Fund Management Center

Legal status: Public institution that integrates government Legal status: Public institution that integrates government and market functions. and market functions.

Beneficiaries: Chinese institutions working on climate Beneficiaries: Chinese institutions working on climate change.change.

China CDM Fund Is A Revolving Fund

Current capital size: RMB 10 billion

(about USD1.58 billion) (about USD1.58 billion)

Its capital size will become larger Its capital size will become larger and larger gradually, depending and larger gradually, depending upon CDM development.upon CDM development.

Major sources of the fund:

national revenue from Chinese CDM projects;

interest earned from its operation.

Governing Body

The Board of China CDM Fund consists of most climate change-related ministries in China:

Chair: National Development and Reform Commission ;

Vice Chair: Ministry of Finance;

Members: Ministry of Foreign Affairs

Ministry of Science and Technology

Ministry of Environmental Protection

Ministry of Agriculture

China Meteorological Administration

Roles of The BoardRoles of The Board

The Board of China CDM Fund is responsible for reviewing the following issues:

Management regulations; Strategic planning of the Fund, including annual budget

plan; Application for grants and investments; Annual budget and accounting; and Other major undertakings.

Roles of Roles of China CDM Fund China CDM Fund Management CenterManagement Center

China CDM Fund Management Centre performs the following duties:

Draw up fund regulations on management and operation; Raise funds; Manage the funds and carry out investments and wealth

management activities; Formulate and implement annual budget and accounting of

the Fund; Supervise and manage the operation of projects supported

by the Fund; Report major business activities of the Fund to the Board; Other activities that serve the purpose of the Fund.

Main FunctionsMain Functions China CDM Fund has the following two main functions to

support addressing climate change and low carbon development in China.

Ch

ina C

DM

Fu

nd Software

Construction

HardwareConstruction

Policy research

International cooperation

Capacity building

Public awareness

Support RE and EE through

Equity investment

Concessional loans

Portfolio guarantee

All lending/investment projects are required to make a carbon budget.

Grant

Major Activities & Business Operations Major Activities & Business Operations

--- software construction--- software construction Over 280 million RMB is granted to support over 130 proje

cts on tackling climate change, including:

Updating China's National Climate Change Program;

Policy/strategy studies on climate change;

Preparation of provincial climate change planning;

Preparation of provincial GHG emission inventory； Formulation of low carbon development programs; and

Supporting carbon trading schemes in six pilot provinces/cities in China.

Major Activities & Business Operations Major Activities & Business Operations --- software construction--- software construction (cont.)(cont.)

Preparation of cPreparation of climate change planning for 31 provinceslimate change planning for 31 provinces//citiescities..

Major Activities & Business Operations Major Activities & Business Operations --- software construction--- software construction (cont.)(cont.)

Formulation of Low carbon development programs & carbon trading schemes Formulation of Low carbon development programs & carbon trading schemes in pilots in China.in pilots in China.

Major Activities & Business Operations Major Activities & Business Operations --- hardware construction--- hardware construction

Principle: China CDM Fund plays a role as a seed Principle: China CDM Fund plays a role as a seed capital that exploits market mechanism and mobilizes capital that exploits market mechanism and mobilizes more social capital to support addressing climate more social capital to support addressing climate change and low carbon development in China. change and low carbon development in China.

Requirement: Renewable, clean energy; energy Requirement: Renewable, clean energy; energy efficiency. Carbon budget and MRV (monitoring, efficiency. Carbon budget and MRV (monitoring, reporting & verifying).reporting & verifying).

By the end of June 2011, By the end of June 2011, Investment: USD 360 million Investment: USD 360 million

Financing projects: 45Financing projects: 45 Location: 13 provinces (cities) Location: 13 provinces (cities) Leveraging social capital: over Leveraging social capital: over

USD 2.8 billionUSD 2.8 billion

Major Activities & Business Operations Major Activities & Business Operations --- hardware construction (cont.)--- hardware construction (cont.)

Projects financed by China CDM Fund includes:Projects financed by China CDM Fund includes: Investment in Shanghai Environment and Energy Investment in Shanghai Environment and Energy

Exchange, who supports Shanghai to be the first Exchange, who supports Shanghai to be the first city/province implementing carbon trading scheme;city/province implementing carbon trading scheme;

Renewable energy development: biomass, hydropower, Renewable energy development: biomass, hydropower, solar power;solar power;

Energy efficiency enhancement: heating recovery, Energy efficiency enhancement: heating recovery, central heating system, natural gas replacing coal, central heating system, natural gas replacing coal, energy saving products like inverter air conditioner energy saving products like inverter air conditioner compressor, LED lighting, electric bus.compressor, LED lighting, electric bus.

Major Activities & Business Operations Major Activities & Business Operations --- hardware construction (cont.)--- hardware construction (cont.)

Distribution of projects supported by China CDM Fund.Distribution of projects supported by China CDM Fund.

Major Activities & Business Operations Major Activities & Business Operations --- Other activities--- Other activities

Collaborate with World Bank, IFC, ADB, Collaborate with World Bank, IFC, ADB, Deutsche Bank Deutsche Bank and other international and domestic banks, to explore inand other international and domestic banks, to explore innovative climate change financing mechanisms;novative climate change financing mechanisms;

Be Involved in carbon market and climate financing policBe Involved in carbon market and climate financing policy research works;y research works;

Provide consulting services to domestic CDM project entiProvide consulting services to domestic CDM project entities.ties.

For a low carbon futureFor a low carbon future ！！

Thank youThank you ！！

XIE Fei Director, Revenue Management Departmentxiefei@cdmfund.orgTel: +86-10-88659260Web: www.cdmfund.org