Joint Call for Proposals for the NEFCO Norwegian Carbon Procurement
Facility (NorCaP) and the NEFCO Carbon Fund (NeCF)
LETTER OF INVITATION
Submissions may be sent until 27 November 2014 at 17:00 hours Eastern European Time (EET)
Forward Purchasing of Certified Emission Reductions (CERs) from CDM
Projects and Programmes of Activities (PoAs)
The Nordic Environment Finance Corporation (NEFCO) has been assigned by the Government
of Norway, acting through the Ministry of Climate and Environment (“Norway”) to manage a
global carbon procurement programme to purchase Certified Emission Reductions (CERs) from
Clean Development Mechanism (CDM) projects and Programmes of Activities (PoAs) under the
Kyoto Protocol of the United Nations Framework Convention on Climate Change (UNFCCC).
Under this joint Call for Proposals, NEFCO seeks to purchase CERs from CDM projects and
PoAs under the following two funds;
1. The NEFCO Norwegian Carbon Procurement Facility (NorCaP), which is wholly funded
by the Norwegian government and established for the purchase of CERs to be used by
Norway to cover a part of its commitments under the second commitment period of the
Kyoto Protocol. NorCaP closed its first Call for Proposals (CfP1) in January 2014.
2. The NEFCO Carbon Fund (NeCF), which is a global carbon fund based on a Public
Private Partnership model launched by NEFCO in April 2008. Vested in the form of a
trust fund administered by NEFCO, it is an instrument for purchasing greenhouse gas
emission reductions under the Joint Implementation (JI) and Clean Development
Mechanism (CDM). Norway is one of the participants in NeCF, and retains the
possibility to procure further projects from its remaining funds in NeCF.
The principal objective of NorCaP is to prevent reversal of emission reduction activities by
procuring credits from registered and commissioned projects whose continued emissions
reduction activity depend on a higher carbon price than achievable under current market
conditions. NorCaP will only purchase CERs from registered and commissioned 1 CDM projects
and PoAs which are facing the risk of termination due to the prevailing low CER prices
(vulnerable projects) and which have no Emissions Reduction Purchase Agreement (ERPA) in
force as of 7 October 2014. This may include commissioned projects which for the same reasons
have already discontinued their operations and generation of emissions reductions.
NeCF applies broader criteria and through this CfP2 will select projects which fall outside the
remit of NorCaP. These will include proposals for not yet registered and/or registered but
1
In case of PoAs, at least one Component Project Activity (CPA) must have been fully implemented/commissioned.
not commissioned CDM projects or PoAs and existing PoAs with not yet commissioned CPAs
from least developed countries (LDCs 2), at the discretion of NEFCO.
Through this joint CfP2, eligible proponents are invited to submit proposals for delivery of
CERs. Emission Reduction Purchase Agreement (ERPA) contracts will be for future deliveries of
CERs based on emission reductions generated from 1st October 2014 at the earliest, until 31st
December 2020.
The principal changes from CfP1 are:
•
A reservation or set-aside of up to 5 million CERs from projects in LDCs. The set-aside
is subject to a price ceiling of €4.00 per CER. The total volume to be contracted from the
second NorCaP call is expected to be up to 15 million CERs, including the set-aside.
•
The opportunity to utilise the Norwegian NeCF funds for LDC projects in addition to
NorCaP, with a total up to 3 million CERs in the same period of generation. The same
price ceiling of € 4.00 per CER will be applied. Not yet commissioned and/or registered
projects are eligible.
Before making a submission, we kindly invite potential proponents to consult Annexes I and II,
which contain Guidelines for the Submission of Proposals, including more detailed eligibility
criteria under respectively NorCaP and NeCF. Please note that these criteria - also as regards
NorCaP - differ from those of the CfP1, and that project proposals under this joint CfP2 shall be
submitted to NEFCO either for NorCaP or NeCF. However, Norway and NEFCO may choose
to consider project proposals submitted for NorCaP also under NeCF.
Interested proponents will need to register on-line and submit their proposals using the webbased system at http://www.norcap.org, which will be on-line from 7 October onwards. Only
complete submissions that have been received by 27 November 2014 at 17:00 hours EET
(GMT +2 hours) will be considered. A one page signed cover letter, to be issued in conformity
with the Form Cover Letter found in Annex III must be attached to the proposal. If the
proponent is not a project participant (or is expected to be), it also needs to attach a duly signed
Power of Attorney from one of the project participants to the proposal. In order to be
considered, the proposal has to be valid for at least four (4) months from the date of closing of
this CfP2 on 27 November 2014.
Questions proponents may have must be submitted by email to [email protected] at the latest by
24 October 2014. NEFCO’s answers will be published on an anonymous Questions and
Answers list by 31 October 2014 at the NorCaP website: http://www.norcap.org.
This CfP2 does not constitute an offer to purchase CERs and accordingly NEFCO reserves the
right to accept or refuse any proposal at its sole discretion. Additionally, the selection of project
proposals for further due diligence as well as possible ERPA signing is subject to individual
approval by Norway.
The current list of Least Developed Countries as defined by the United Nations includes 49 countries. They are
listed in http://www.unhrlls.org/en/ldc/25
2
Cost effectiveness remains a key criterion for selection.
The selection of projects proposais (that will be subjected to further analysis and due diligence) is
expected to be completed by the end of January 2015. It is the intention of NEFCO to sign a
Letter of Intent similar to Annex IV with the expected ERPA counterparty in order to initiate a
due diligence process and possibly commence negotiation of an ERPA based on the tempiates in
Annex V. Annexes IV and V will be published on the NorCaP website http://www.norcap.org/
in due course.
Annexes:
Annex 1
Guidelines for Submission of Proposal under NorCaP
Annex II
Guidelines for Submission of Proposal under NeCF
Annex III Cover Letter Form
Annex IV Letter of Intent Tempiate
Annex V
ERPA Tempiates, including a form of Statement of Vulnerability
Helsinki, 7 October 2014
On behalf of the Nordic Environment Fmance Corporation
Ash Sharma
Manager, NorCaP
Nordic Environment Finance Corporation
Fabianinkatu 34
P.O. BOX 249
Fl-00171 Helsinki
Finland
Telephone: +358 10 618003
Fax:
+358 9 630 976
Internet:
www.nefco.org