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CDM as instrument for industrial development and poverty alleviation in Caucasus - I Phase

Clean Development Mechanism (CDM) is a mechanism under the Kyoto Protocol that will enable projects in emerging economies that lead to a reduction of greenhouse gases, to get an extra revenue stream.

The Norwegian Ministry of Foreign Affairs sponsors a program that will be implemented by two Norwegian organizations: Norsk Energi  and ECON  and the Energy Efficiency Centre Georgia.

This is a four phase program and will include the following elements:
  1. Capacity Building: Conducting a capacity building program on CDM; identification of long-list of potential projects and prioritizing short-list.
  2. PIN - Project Idea Note development: Preparation of PINs for the projects on the short-list. Present the PINs to potential investors and financial institutions
  3. PDD – Project Design Document.  Preparation of PDDs for the selected projects.    
  4. CDM Project Implementation

Activities – Phase I

This capacity building project comprised of the Information Seminar and two 2-day workshops with the participation of the project developers.

Information seminar: October 11, 2006
Norwegian experts together with the Energy Efficiency Center Georgia conducted the information seminar in cooperation with the DNA. During the seminar an introduction to the Kyoto Protocol and the flexible mechanisms were covered. The seminar discussed the criteria that have to be met by projects and which projects could benefit from the CDM mechanism.
In his presentation Mr. Grigol Lazriev, Acting Head of Department of Hydrometeorology and Climate Change, Ministry of Environment Protection and Natural Resources, DNA/CDM contact person touched on the following issues: legal basis for the CDM project development and implementation in Georgia, functions and capacity of the DNA, CDM National Council structure and its role, project evaluation process, national sustainable development criteria and indicators for CDM projects, CDM projects under consideration.

Workshop 1, November 16-17, 2006
The following topics were covered during the workshop:

  • Introduction to the Kyoto Protocol and the CDM
  • Technical description of CDM
  • CDM Project cycle
  • Involved parties and their roles
  • National procedures
  • Introduction of Project Idea Note (PIN)
  • Homework

The participants of the seminar were the representatives of various industries, in particular:
Itera-Georgia (gas distribution company), “Tbilisi Water” Ltd (water utilities company), Karenergo (wind energy), Wood Service Ltd (wood processing), Waste management company “Energia” from Borjomi, representatives of the Georgian Association of Power Engineers, representatives of the Ministry of Energy.
With the assistance of the Norwegian experts the participating companies identified the project ideas for further development.

Homework for workshop participants: start to outline project information for PIN development.

Workshop II, December 11-12, 2006
Issues covered during the second workshop included:

  • Homework discussion
  • Project economy and financing options
  • Environmental impact
  • Estimate emission reductions
    • Baseline methodologies
    • Monitoring methodologies
  • Feasibility to Georgia’s circumstances

The Norwegian experts provided the participating companies with the CDM EB approved methodologies as refference. After the screening of the first homework, and individual discussions of the projects with the participating companies a pilot project to serve as an example has been chosen. The project team will start to outline the project documentation (PDD) for this project and use this project as an example throughout the whole program.

First Phase Results

  • Increased awareness and knowledge of CDM in Georgia and Caucasus
  • Viable CDM projects identified and developed into PINs
  • Long list of projects that could be developed as CDM projects prepared