EUR 10 million
The Climate Change Technical Assistance Facility (CCTAF) provides advance conditional funding for activities associated with the development of project based carbon assets (credits) under the Clean Development Mechanism (CDM) and Joint Implementation (JI) instruments of the Kyoto Protocol.
CDM and JI are project based mechanisms, established by the Kyoto Protocol to facilitate countries with an obligation (Annex I) to reduce or limit their greenhouse gas emissions to meet their targets in a cost effective way. Under these mechanisms, an Annex I country (investor party) invests in an emission reduction project in another country (host party) (a non-Annex I country for CDM, or another Annex I country for JI), and in turn may receive carbon credits, which then are counted towards the investor party’s emission reductions. Companies with obligations to reduce emissions under the EU Emissions Trading Scheme (ETS) can also use such crediting mechanisms.
European Investment Bank (EIB) and External Sources
Any entity seeking funding for a project that reduces GHG emissions and is eligible for Clean Development Mechanism (CDM)/Joint Implementation (JI) (i.e. project has to provide emission reductions or removals that are “additional” to any that would otherwise occur. In other words, projects that reduce GHG emissions from the projected baseline level). For up to date information on CDM or JI rules and procedures, please visit the UNFCCC CDM and JI websites.
All developing countries.
CCTAF assists projects that are in the process to be registered as a CDM/JI projects. The activities that CCTAF can provide funding, include:
- Carbon credit feasibility study
- Preparation of carbon credit documentation (PDD), including preparation of new baseline and/or monitoring methodology if needed
- Validation of the PDD, and
- Registration of the project
Steps for application:
1. Candidate project should be identified early in the EIB project cycle. The project promoter should provide sufficient information to allow the EIB to assess whether the project adheres to EIB lending objectives and has a well-developed business plan.
2. The project promoter has to send a letter to the EIB agreeing in principle with the conditions for funding under the CCTAF
3. The EIB and project promoter sign the contract
4. The full cycle of CCTAF: Phase 1: Carbon feasibility study, Phase 2: carbon credit documentation preparation and assisting with CDM/JI procedural issues, Phase 3: CDM/JI project validation.
If the project results in the successful registration with a relevant CFM/JI authority, the project promoter is required to repay the loan to the EIB, as follows:
- Under normal circumstances where the EIB is the lender to the underlying investment project, the CCTAF fee will be repaid to the EIB in full out of the proceeds of the first disbursement made under the EIB finance contract for the project.
- If the EIB is not a lender to the project, the project promoter will be required to reimburse the loan and pay the fee in full at the time of financial close of the project.
If the project does not receive registration with the relevant CFM/JI authority, the project promoter will be released from the obligation to repay the loan.
Document with guidelines on CCTAF Operations is available here.