The Clean Development Mechanism:

The Clean Development Mechanism (CDM) is the only mechanism under the Kyoto
Protocol involving countries that are not subject to binding greenhouse gas emission caps
by the protocol( non-Annex I countries). Under the CDM, investors from Annex I states
receive Certified Emissions Reduction units (CERs) for the actual amount of greenhouse
gas emissions reduction achieved in projects financed by them in non-Annex I countries.

The Business opportunity:

According to World Power 2005 publication, the value of Global Emissions Market is
expected to reach Euros 54.0 billion in 2010 and Euros 100.0 billion by 2020. The major
sources of supply of Carbon Credits are expected to be from Brazil, China and India.

2005 actual 2012 estimated

Volume Value (million Volume Value (million
(million Tons USD) (million Tons USD)
CO2 Eqvt.) CO2 Eqvt.)
Total carbon 799 11961 5500 85000
credit market
CDM share 397 2525 2500 25000
India’s share NA NA 500 5000
in CDM

 The Clean Development Mechanism (CDM) remains the largest market segment
in terms of volume. Point Carbon estimates that emission reduction purchase
agreements (ERPAs) corresponding to 397 Mt CO2e were entered into in 2005.
 India and Brazil are the countries with most projects at Project Design Document
(PDD) level or higher, 186 and 101 respectively.
 Indian market is viewed very favorably in the international CER markets which
is evident from the first rank given to India by Point Carbon in ratings of CDM
project hosts:

Source: Point Carbon

These factors make India an ideal supplier of CERs to Annexure-I countries. We plan
to harness this strength of India in CER generation for our business.

Where do we get CDM projects in India?

The per capita consumption of power in India is 356 kWh, as against 600 kWh in China,
8,305 kWh in Singapore and 20,868 kWh in USA. India’s per capita power consumption
is bound to increase, as it embarks upon ambitious sustainable development goals.
Currently, India faces a peak electricity generation shortage of over 20% and an energy
shortage of about 12%.
In the above market space, we will be focusing on financially committed Project
Promoters, who want to benefit from both Ministry for Non-Conventional Energy
Sources (MNES)’s identified ‘investment opportunities’ in Renewable Energy in India
and also on the market potential resulting from UNFCCC’s Clean Development
Mechanism (CDM) of the Kyoto Protocol.
According to the GoI estimate, the estimate of addition Renewable sources of
energy by the year 2012 is estimated to be about 10000 MW
The following gives the break up of the renewable Sources of Energy

Wind power 6000 MW

Small Hydro Power 2000 MW
Biomass power 1500MW
Others 500 MW

All these renewable energy projects will present to us a big opportunity to partner in
them and get CERs for further trading.

Scope of company’s business activities:

 Arranging ' Project Finance ' from G-8 countries for Renewable Energy and
Energy Efficient Projects in India & Sri Lanka, under the Clean Development
Mechanism (CDM) to benefit from the UNFCCC Kyoto Protocol
 Arranging Equity Participation / Technical Collaborations between Indian
Corporations and Overseas Companies for implementing CDM projects.
 Facilitating 'Donor / Technical Assistance' from Donors / NGO's from
overseas for Renewable Energy & Energy Efficiency Projects in India.
 Mobilizing ' Carbon Credits ' from Renewable Energy & Energy Efficiency
Projects in India for sale to International Buyers in Europe, Japan and Canada.
 Set up a subsidiary company engaged in the manufacture, distribution,
installation and export of Renewable Energy Systems such as Bio-mass
Gasifiers, Village Electrification Systems, Mobile Power Plans (mini),
Municipal Solid Waste Processing Equipments and Mobile Bio-digesters.
  Promote a Joint Venture with National Bio-fuel Corporation and a renowned
International Financial Institution, to cultivate Jatropha plant in 25,000 acres
in South India for manufacture of bio-diesel and arrange for its distribution
and sale.

Revenue Break- up

Project finance Commission

syndication from sale of
15% CERs
30%
Profits/commis
sion from
manufacturing
20% Consulting
Equity services
Syndication 20%
15%

Our Competitive Advantage:

 The consulting "industry" in green energy segment as of now has a

number of niche players, with western roots. This plays well for the buy
side of the carbon markets. However, to be effective in these markets,
these firms need to tie up with suppliers, who almost always happen to be
from the developing countries like India and China.

 The cultural chasm between the two groups is a major source of

frustration for these players. Our management team will provide a unique
combination of Indian roots and global outlook and in turn will be the
binding force bringing the suppliers and the purchasers together.

IMPLEMENTATION STRATEGY:
1
For the demand side: Our Company will focus on North American Market – USA and
Europe. With the help of a marketing and technical personnel (to be appointed), we
would identify potential buyers of CERs in these markets. We will also tie up with
Carbon Warehouses and market players like M/s Carbon Credit Capital, New York and
sell CERs to them directly.

For the supply side: We will focus on three geographical markets, India, Sri Lanka and
Bangladesh, and in limited product segments: Renewable Energy and Energy Efficiency
projects providing one-stop solutions. The target customer is usually the CEO of mid-
size corporation
( SME) intending to generate captive power/diversifying into power sector.

The USP of our Company

 With the help of its subsidiaries in the manufacturing of Renewable Energy

equipments and Bio-Diesel, we would be able to provide true end-to-end services
in the Green space. Such a broad spectrum of horizontal integration will set the
cost of entry at a higher level to the competitors and mitigate the threat of new
entrants into its market space.
 We would also be entering into CDM Project Consultancy Assignments including
Carbon Trading Services Assignments with well established Indian Financial
Institutions and Banks. Such services are being bundled as part of latter’s ‘Offer
Package’ to Project Promoters in RE and EE sector.

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