The Role of Carbon Finance in Wind Project Development
By: Philip G. Doyle, Econergy International Corporation (EIC)
The paper and presentation will focus on the financial role carbon credits or
certified emissions credits (and other concessional financing vehicles linked to
environmental and social attributes) can play in structuring of a wind energy
project in South Africa. The key goal of this presentation will be to identify direct
opportunities to improve the financial structure of a South African wind project.
This presentation and paper will describe the process necessary to develop the
carbon finance component of a wind energy project’s financial structure. It will
take the project developer from the initial conceptual state to project financing.
The goal of this presentation and paper will be to: 1) help developers better
understand how carbon financing relates to their project, and 2) work through the
critical path diagram of the carbon finance process. Discuss the linkages
between the carbon credit market and tradition financial concepts. A solid
understanding of these basic concepts and linkages will enable developers to
better understand the market for carbon and how it links to the overall financial
structure of the project.
In addition, this presentation and paper will cover:
□ A simple check list will be presented to assist project developers to more
easily assess the usefulness of carbon financing to their project and
whether or not it’s appropriate to their needs.
□ Help project developers identify the risks associated with a project by
illustrating how to conduct a well thought-out analysis of the project
specific and non-specific risks impacting the financial success of the
project.
□ The discussion will then turn to the ‘Project Lock box’ and Carbon Finance
methodology showing (using a critical path diagram) how to creating a
low-risk carbon finance structure. This structure will lock in the inputs
(revenue stream) and the outputs (payment stream), effectively
securitizing the carbon emissions reductions created by the project.
□ Who is purchasing carbon credits and how much are they worth and how
to access the international market for carbon credits?
□ Accessing “green” or concessional financing through the environmental
benefits associated with the project. Several private and public sources of
financing (debt, equity, and grants) which focus on renewable energy
technologies will also be presented.
Two case studies will be presented of wind projects in other regions of the world
with a discussion of the project financial structure and how carbon financing
played (and did not play) a role. The similarities and differences to the South
African context will be discussed to identify specific deficits and benefits the
South African market offers.
PHILIP G. DOYLE
Econergy International Corporation (EIC)
Philip G. Doyle is Project Finance Specialist with several years of experience working for
public, private, and non-profit organizations. His focus has been on the application of
quantitative tools and methodologies to analyze energy project development
opportunities in emerging market and lesser developed economies. Currently, in his
capacity as a consultant with Econergy International, Mr. Doyle examines energy
projects, and provides investors and project developers services related to the
development and financial structuring of energy projects. This experience has exposed
Mr. Doyle to projects throughout North America, Latin America, Africa, and Asia.
In addition to his core business of project finance advisory services, he has been
extensively involved in the Carbon market. Specifically developing strategies to help
companies and projects benefit from the new markets associated with climate change,
green energy, and emission reduction trading. Most recently, Mr. Doyle conducted a
study examining several project development opportunities in South Africa for their
ability to generate certified emissions reductions under the Kyoto Protocol for the World
Bank and the South African Central Energy Fund.
Mr. Doyle started his career at Niagara Mohawk Power Corporation where he used
Geographic Information System (GIS) models to analyze the natural gas market in an
effort to improve the companies’ ability to target and provide services to customers.
Later, Mr. Doyle worked in the not-for-profit sector, developing modeling and web-based
tools to analyze the geographic and demographic trends surrounding power usage,
brownfield sites, and hazardous waste sites. At the U.S. Environmental Protection
Agency (EPA), he acted as a liaison between industry and environmental groups in an
effort to implement technologies to improve industrial efficiency and cost while reducing
the overall production of toxic substances. He has held position with the New York State
Department of Environmental Conservation.
He holds a Masters of Public Policy with a focus on International Finance from the
University of Chicago and a dual undergraduate degree in Biology and Geography from
Syracuse University.