CCS FINANCING THROUGH

MULTILATERAL
DEVELOPMENT BANK
INSTRUMENTS

WORLD BANK CCS TRUST

FUND ACTIVITIES

Thursday 7th April

CCS financing Roundtable
 Presentation

 Overview of CCS Trust Fund

 Country level programs
 Discussion of analytical regional study

 World Bank activities: CCS Trust Fund

 Two core elements guiding its work at the

international, regional and national levels:
Main  Capacity building and knowledge sharing assistance
objectives regarding CCS,
of the CCS  Carbon asset creation services.
TF  In co-operation with leading international and bilateral
initiatives (Global CCS Institute, CSLF, EC programs,
IEA Programs and others)


 Total capitalization of the Trust Fund is $11 million:

 Government of Norway – $9 million,
CCS TF  Global CCS Institute – $2 million.
structure  The work program consists of the following two
and work
program components:
 Country-level component focusing on nine country- or
project-specific activities ($6.9m)
 Economic and sector work component: regional
regulatory, economic and financial instruments
analyses, “CCS: Regional Perspective in Developing
 Work Program - Country level activities

 Projects
Country/region Amount allocated (US
include:
 Assessment
Botswana $m)
1.4
s of Republic of South 1.1
geologic Africa
al
China 1.8
storage Kosovo 0.4
 Training Indonesia 0.85
and
worksho India 0.5
ps Egypt 0.3
 Assessment Jordan 0.15
s of
applicabi Maghreb 0.4
lity of TOTAL 6.9
capture
technolo
gies
 Work Program - Country level activities

 Examples of country work program

 Botswana
 Project activities include
 Identification of sites suitable for CCS geological storage
or enhanced coal bed methane recovery
 Formation of the Carbon Working Group
 Creation of a sustainable Carbon Secretariat as part of
the ministerial structure
 Organization of at least 3 thematic workshops

 Work Program - Country level activities

 Examples of country work program

 Jordan
 Project activities include
 Assessment of potential for CCS activities, such as CO2
sequestration in oil shale
 Assessment of institutional capacity for CCS
 Recommendations on capacity-building activities
 Identification of barriers to CCS development and
applications


 Work Program - Country level activities

 Examples of country work program

 Kosovo
 Project activities include
 Scoping study of geological storage potential
 Pre-feasibility study for CO2 capture at the proposed KRPP
 Training and thematic workshops for key CCS stakeholders


 CCS: Regional Perspective in Developing
Countries

Work program element Location and

scale
1 Review of Regulatory and Institutional Frameworks on CCS in Regional,
the Southern Africa and Balkan regions
sector scale
2 Techo-economic assessment of CCS deployment in power Regional,
systems in the Southern Africa and Balkan regions
sector scale
3 Assessment of climate finance sources to accelerate CCS Global,
deployment in developing countries
sector scale
4 Financing model for CCS projects Project scale

T h e fin a lre p o rt o n a ll co m p o n e n ts w ill b e co m p le te d b y Ju n e 2 0 1 1

Techo-economic assessment of CCS deployment
in power systems in the Southern Africa and
Balkan regions
 Objective: Investigate how different
policies can affect the deployment of
CCS, and what the effect this has on the
local power systems using MESSAGE
 Study involves research on the following:
 Local potential storage sites
 Power generation and electricity networks
 Electricity demand projections and
national policies

Techo-economic assessment of CCS deployment
in power systems in the Southern Africa and
Balkan regions
 Scenarios
 Business as usual
 CO2 tax
 Forced CCS targets
 Renewable portfolio standards
 Energy efficiency targets
 Under each scenario will examine
 Electricity prices
 Electricity trading
 Electricity generation portfolio, including level
of CCS deployment
Assessment of climate finance sources to
accelerate CCS deployment in developing
countries
 Objective:
 Toassess of the role of climate finance
sources, both within and outside of the
UNFCCC, in accelerating CCS
deployment in developing countries
 Guidance on fungible CCS carbon asset
creation
Assessment of climate finance sources to
accelerate CCS deployment in developing
countries
CLIMATE FINANCE SCENARIOS
•Build climate finance scenarios 2012-2020+ based on current
developments and commitments

USING CLIMATE FINANCE FOR CCS DEMONSTRATION & DEPLOYMENT

•Compare CCS deployment schedules and associated financing needs (e.g. IEA
CCS Roadmap) to the climate finance sources in each scenario
•For each scenario, establish how climate finance mechanisms can be
applied to CCS by examining their potential and constraints. Mechanisms
include bilateral agreements, NAMAs, CIF, CDM, GEF, etc.

DEVELOP TOOLKIT FOR CCS CARBON ASSET CREATION

•Guidance includes appropriate references to existing methodologies
•Guidance gives recommendations for steps to develop new methodologies,
addressing baseline setting, boundaries, additionality, MRV procedures,
technology types etc.
Financing model for CCS power plant
project
 Objective: Create financing model to
examine how the World Bank could
finance a CCS project
 Explorewhat concessional financing
necessary to reduce LCOE using MDB
instruments
 In coordination with the World Bank
Treasury
Financing model for CCS power plant
project
 Concessional climate finance sources will
have financing terms similar to
 CTF
 Green Climate Fund

Financing model for CCS power plant
project

Scenarios:


 For Pulverized coal, IGCC, and Oxyfuel:

 Revenues from CO2 prices

 Revenues from EOR or ECBM recovery
 Range of high and low coal prices

 The financing required is determined by

reducing LCOE to be equal to
1.The LCOE from a coal plant without CCS
2.LCOE of other cheaper energy
technologies

 Outputs of the model – required level of
concessional financing determined for each
scenario
Scenarios
Technology IGCC PC Oxyfuel

CO2 capture rate 0% 90% 25% 0% 90% 25% 0% 90% 25%

CO2 price 0 or 20 0 or 20 0 or 20 0 or 20 0 or 20 0 or 20 0 or 20 0 or 20 0 or 20
$/tonne
Enhanced None/EOR/E None/EOR/EC None/EOR/EC None/EOR/E None/EOR/EC None/EOR/EC None/EOR/E None/EOR/E None/EOR/E
CBM BM BM CBM BM BM CBM CBM CBM
hydrocarbon
recovery
Coal price High, med, High, med, lowHigh, med, High, med, High, med, High, med, High, med, High, med, High, med,
low low low low low low low low
(1,3 or 5
$/mmbtu)

T h e se sce n a rio s a re ca rrie d o u t b o th fo r w e t

a n d d ry co o le d te ch n o lo g ie s
Outputs of the model – required level of
concessional financing determined for each
scenario
 Examples of financing instrument
combinations to be examined include
 IBRD loan + commercial loan +
concessional finance
 IBRD loan + 2 commercial loans +
concessional finance
 IBRD loan + guarantee+ MDB loan +
concessional finance
 Model assumptions and cost inputs
informed by Medupi plant in South
Africa and NETL feasibility study for
World Bank Outputs

 Webinar to disseminate findings and

generate feedback from the Climate
Finance study
 Regional study report by June 2011
 Results will be presented at regional
workshops in Dubrovnik (May 4th and
5th ) and Johannesburg (June 1st and 2nd )
 Workshop on results of regional study and
update on CCS TF activities at World
Bank headquarters in Washington, DC in
September 2011
Thank you

Natalia Kulichenko
nkulichenko@worldbank.org