Trustee Presentation: Update on Status of Resources and CER - - PDF document

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Trustee Presentation: Update on Status of Resources and CER - - PDF document

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AFB/B.20/Inf.4 5 April 2013 Project and Programme Review Committee Ethics and Finance Committee Eleventh Meeting Bonn, Germany, 2-3 April 2013 Adaptation Fund Board Twentieth Meeting Bonn, Germany, 4-5 April 2013 Trustee Presentation:

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AFB/B.20/Inf.4 5 April 2013 Project and Programme Review Committee Ethics and Finance Committee Eleventh Meeting Bonn, Germany, 2-3 April 2013 Adaptation Fund Board Twentieth Meeting Bonn, Germany, 4-5 April 2013

Trustee Presentation: Update on Status of Resources and CER monetization

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ADAPTATION FUND TRUST FUND Update on Status of Resources and CER Monetization Program

April 5, 2013 Prepared by the World Bank as Interim Trustee of the Adaptation Fund

Adaptation Fund Trustee The World Bank

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Roadmap

  • 1. Status of Resources in Adaptation Fund Trust

Fund

  • 2. Recent CER Market Developments
  • 3. CER Monetization Program

Adaptation Fund Trustee The World Bank

Agenda

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SLIDE 4

Adaptation Fund Trustee The World Bank

Funding Availability at 28 February 2013 (USD millions)

Resources Received : 324.83

  • Cash receipts from CER sales

188.20

  • Cash receipts from Donations

134.50

  • Investment Income

2.13 Funding Decisions to Date 198.00 Cumulative Cash Transfers to date: 72.34 Funds Available to support new funding decisions at December 31, 2012: 123.82 at Feb 28, 2013: 123.84

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Adaptation Fund Trustee The World Bank

Cumulative Donations (USD millions)

Spain 57.1 Sweden 44.2 United Kingdom 15.9 Germany 13.9 Switzerland 3.2 Others 0.3

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Adaptation Fund Trustee The World Bank

Revenue Flow and Potential Resources estimated at 1 April 2013

146-149 million

  • 20

40 60 80 100 120 140 160 FY09 FY10 FY11 FY12-Dec 2012 2013-2020 USD, millions CER Proceeds High Case CER Proceeds Medium Case CER Proceeds Low Case Funds Available Figures represent estimates of total potential resources available for the AF up 2020, based on CER proceeds scenarios

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  • 2. Recent CER Market Developments

Adaptation Fund Trustee The World Bank

Agenda

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CERs added to the Adaptation Fund Share

  • f Proceeds at the CDM (tons per month)

7

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Adaptation Fund Trustee The World Bank

A history of CER prices

€ 0.00 € 5.00 € 10.00 € 15.00 € 20.00 € 25.00 € 30.00

Daily prices (€)

EUA Secondary CER Primary CER Primary CER post-2012

2-y of relatively low volatility and stable prices CERs & EUAs decouple EU ETS rescue plan vs. CERs & ERUs issuance Peak of demand in "sellers market" 2008-09 financial crisis and economic downturn EU debt crisis & oversupply in KP and EU ETS post-2012

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Adaptation Fund Trustee The World Bank

CER Oversupply

CER market remains over-supplied by more than 1 billion CERs: Demand: EU ETS + AU ~ 1.7 billion tons (2008-2020) Supply: CER issued to date: 1.2 billion +Anticipated issuance: 1.2 billion (at current pace) +ERU issued: 0.7 billion Total 3.1 billion tons

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  • 3. CER Monetization Program

Adaptation Fund Trustee The World Bank

Agenda

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11

CER Monetization Program

Total Sales up to March 31, 2013

 16.37 million

CER tons sold

 € 139.37 million

raised

 842 separate

transactions

Adaptation Fund Trustee The World Bank

Exchange, 8.54 OTC, 7.62 Auction, 0.20

CER transaction breakdown (Millions of tons)

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CER Monetization Program

Industrial Gas CER transactions since last AFB meeting

Adaptation Fund Trustee The World Bank  1.5m tons

Industrial Gas CER sold

 0.28m tons

Industrial Gas CER remaining

 Total proceeds:

€190k

  • 0.20

0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00

CER Volume (Millions of tons)

CER Sold since December 2012 Remaining Balance

Industrial Gas CER available for sale since last board meeting in Dec 2012: 1.78m tons

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CER inventory as of March 31, 2013

Adaptation Fund Trustee The World Bank

Inventory (Million Tons) Acceptance in EU ETS until: Deliverability to exchange until: Industrial Gas 0.28 Apr-2013 Apr-2013 Green 6.14 Mar-2015 Mar-2015 Large Hydro 2.43 Mar-2015 Not accepted Others 0.19 Not accepted Not accepted Total 9.03

Potential additions in FY14: 5 to 7 million Potential avail. to sell in FY14: 14 to 16 million

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  • 1. Continue to sell Industrial gas-derived CERs

through April 2013

  • 2. Resume modest pace of sales of other AF CERs

after April 2013 as market conditions permit

  • 3. Target volume of sales at minimum levels, to avoid

excessive buildup of additional CERs in the Share

  • f Proceeds
  • 4. Provide update to Board at next meeting for

further guidance

Adaptation Fund Trustee The World Bank

Trustee Recommendations