CDM project activity/programme of activities registration request review form (CDM-REGR-FORM) (Version 03.0)

Reference number of the proposed CDM project activity/programme of activities (PoA) submitted for registration	9493
Title of the proposed CDM project activity/PoA submitted for registration	San Carlos 18 MW Biopower Power Plant
Please indicate, in accordance with paragraphs 37 and 40 of the CDM modalities and procedures, which validation requirement(s) may require review. A list of requirements is provided below. Please provide reasons in support of the request for review. Including any supporting documentation.
The following are requirements derived from paragraph 37 of the CDM modalities and procedures:
The participation requirements as set out in paragraph 28 to 30 of the CDM modalities and procedures are satisfied; Comments by local stakeholders have been invited, a summary of the comments received has been provided, and a report to the designated operational entity (DOE) on how due account was taken of any comments has been received; Project Participants have submitted to the DOE documentation on the analysis of the environmental impacts of the project activity, including transboundary impacts and, if those impacts are considered significant by the project participants or the host Party, have undertaken an environmental impact assessment in accordance with procedures as required by the host Party; The project activity is expected to result in a reduction in anthropogenic emissions by sources of greenhouse gases that are additional to any that would occur in the absence of the proposed project activity, in accordance with paragraphs 43 to 52 of the CDM modalities and procedures; The baseline and monitoring methodologies comply with requirements pertaining to methodologies previously approved by the Executive Board; Provisions for monitoring, verification and reporting are in accordance with decision 17/CP.7, the CDM modalities and procedures and relevant decisions of the COP/MOP; The project activity conforms to all other requirements for CDM project activities in decision 17/CP.7, the CDM modalities and procedures and relevant decisions by the COP/MOP and the Executive Board.
The following are requirements derived from paragraph 40 of the CDM modalities and procedures:
The DOE shall, prior to the submission of the validation report to the Executive Board, have received from the project participants written approval of voluntary participation from the designated national authority of each Party involved, including confirmation by the host Party that the project activity assists it in achieving sustainable development; In accordance with provisions on confidentiality contained in paragraph 27(h) of the CDM modalities and procedures, the DOE shall make publicly available the project design document; The DOE shall receive, within 30 days, comments on the validation requirements from Parties, stakeholders and UNFCCC accredited non-governmental organizations and make them publicly available; After the deadline for receipt of comments, the DOE shall make a determination as to whether, on the basis of the information provided and taking into account the comments received, the project activity should be validated; The DOE shall inform project participants of its determination on the validation of the project activity. Notification to the project participants will include confirmation of validation and the date of submission of the validation report to the Executive Board; The DOE shall submit to the Executive Board, if it determines the proposed project activity to be valid, a request for registration in the form of a validation report including of the project design document, the written approval of the host Party and an explanation of how it has taken due account of comments received.
There are only minor issues which should be addressed by the DOE/project participants prior to the registration of the project.
Additional information
1) The DOE is requested to further substantiate the suitability of chosen benchmark (20% equity IRR after tax) applied in the investment analysis considering that 1) the DOE has not validated the premium of 3% ,on top of the ERC published cost of equity 17%, based on independent/public evidence and 2) it is not clear whether the premium has been considered in the market risk premium in the calculation of cost of equity using CAPM.  Please refer to Paragraph 121, VVS version 02.0.0; Page 15-16, ACM0018 version 02.0.0; Paragraph 13 and 15, “Guidelines on the assessment of investment analysis, version 05.0, EB 62 Annex5”. 2) The DOE is requested to further explain how it has validated the input values applied in the investment analysis, in particular : a) the total investment cost of the project activity considering that the DOE has validated only EPC and non EPC contract which are about 60% of total investment cost whereas with reduction of 9.32% in investment cost the equity IRR crosses the benchmark; and b) the total operating cost including fuel cost, escalation assumptions for the tariff and cost, depreciation rate and interest rates given that no validation has been provided on those input values. Please refer to Paragraph 120 (a) and (b) , VVS version 02.0.0. 3) The DOE shall further validate the barrier analysis presented in the PDD, in particular; a) Investment barriers, considering that insufficient financial return is presented as investment barriers which is not in line with the applied methodology which states that "investment barriers, other than insufficient financial returns as analysed in Step 3 i.e. investment analysis"; and b) Technological barriers, considering that the Renewable Energy Act 2008 appears not specifically mention that such technology and equipment are not available in the host country. In doing so, the DOE shall also validate how the CDM will help to alleviate the identified barriers so that the project activity is not prevented by the occurring of the barriers. Please refer to Page 13-14, ACM0018 version 02.0.0; Paragraph 124-127 , VVS version 02.0.0. 4) The DOE is requested to further substantiate on how it has validated that the project activity fulfils the applicability condition 1 of the selected baseline and monitoring methodology which states that “No other biomass types than biomass residues, as defined above, are used in the project plant”, considering that the project activity also aims to use grassy and woody energy crops, as supplemental fuel, harvested from dedicated plantations to be established by the project activity whereas the methodology only allows to use biomass residues that is a by-product, residue or waste stream from agriculture, forestry and related industries.  Please refer to Page 1 and 3 of ACM0018 version 02.0.0 ;Paragraph 73 and 77, VVS version 02.0.0.
Date	19 Aug 13