Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. 69445 MNA Region Carbon Finance Assist Program Support for Programmatic CDM development for the National Program for Municipal Solid Waste in Morocco Mission Report Final Version March 2009 Dr. Abdelmourhit LAHBABI alahbabi@menara.ma Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. TABLE OF CONTENTS ABBREVIATIONS .................................................................................................. 3 1- INTRODUCTION................................................................................................ 5 2- OBJECTIVE OF THE MISSION ......................................................................... 5 3- TASKS OF THE MISSION ................................................................................. 5 4- DATA AND INFORMATION COLLECTION AND GATHERING ....................... 7 5- MUNICIPAL SOLID WASTE NATIONAL CONTEXT ........................................ 9 6- DESCRIPTION OF THE PROPOSED CDM PROGRAM................................. 10 7- SCENARIOS FOR THE CPA PROJECTS....................................................... 11 8- PROGRAM SCHEDULE .................................................................................. 14 9- EMISSIONS REDUCTION EVALUATION ....................................................... 15 9-1 Program activities and CDM methodology....................................................... 15 9-2 Avoided methane emissions evaluation........................................................... 15 9-3 Electricity baseline emissions evaluation ........................................................ 18 9-4 Emissions reduction .......................................................................................... 19 9-5 Electricity generation......................................................................................... 24 10- CDM ADDITIONALITY................................................................................... 27 11- CPAs ELIGIBILITY ....................................................................................... 28 12- TYPICAL CPA ............................................................................................... 31 13- INVESTMENT ANALYSIS ............................................................................. 32 13.1 Introduction ........................................................................................... 32 13.2 Investment evaluation........................................................................... 32 13.3 Operational and Maintenance costs .................................................... 37 13-4 Revenues ............................................................................................... 40 13-5 Profitability ............................................................................................ 41 14- PROGRAM BENEFITS .................................................................................. 44 14-1 Local benefits ........................................................................................ 44 14-2 Global benefits ...................................................................................... 44 14-3 Socio Economic effects........................................................................ 45 15- PROGRAM IDEA NOTE ................................................................................ 45 16- NEXT STEPS ................................................................................................. 45 ANNEXES .............................................................................................................47 Annex A: Terms of reference Annex B: Landfills survey template Annex C: CDM Program Idea Note for the PNMSW Annex D: Survey filled forms 2 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. ABBREVIATIONS BM : Build Margin (CO2 emission factor) CDM : Clean Development Mechanism CEF : CO2 Emission Factor CER : Certified Emissions Reduction CF : Carbon Finance Unit – World Bank CM : Combined margin (CO2 emission factor) CPA : CDM Project Activity CPF : Carbon Partnership Facility DNA : Designated National Authority DOC : Degradable Organic Carbon EB : CDM Executive Board ER : Emissions Reduction ERU : Emissions Reduction Unit FEC : Fonds d’Equipement Communal GDP : Gross Domestic Product GHG : Green House Gases GWh : Giga Watt hour (109 Watt hour) GWP : Global Warming Potential IPCC : Intergovernmental Panel on Climate Change IRR : Internal Rate of Return LFG : Land Fill Gas 3 m : Cubic meter MAD : Moroccan Dirham MDP : Mécanisme pour un Développement Propre (CDM) MNA : Middle East and North Africa region MoU : Memorandum of Understanding MSW : Municipal Solid Waste MW : Mega Watt (106 Watt) MWh : Mega Watt hour NPMSW : National Program for Municipal Solid Waste O&M : Operational and Maintenance Cost 3 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. OM : Operating Margin (CO2 emission factor) ONE : Office National d’Electricité PDD : Project Design Document PIN : Program Idea Note PNDM : Programme National des Déchets Ménagers. PoA : Program of Activity SWDS : Solid Waste Disposal Site TOE : Ton Oil Equivalent TORs : Terms Of Reference UNFCCC : United Nations Framework Convention on Climate Change WB : World Bank WBI : World Bank Institute Currency exchange rate: 1 $ = 8,7 MAD 4 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. 1- INTRODUCTION Carbon Finance Assist (CF-Assist) is a capacity building and technical assistance program established by the World Bank to help develop national capacities of developing countries on carbon finance and CDM activities. The World Bank Institute, responsible for the CF-Assist program management, has hired Dr. Abdelmourhit Lahbabi, as short term consultant, to provide technical assistance for programmatic CDM development in Municipal Solid Waste (MSW) sector in Morocco. The ToRs of the mission are provided in appendix A. The assignment was carried out in the country during the period November 2008 to February, 2009. Meetings with Fonds d’Equipement Communcal (FEC), the focal institution of Moroccan Cities and Municipalities for CDM, and the Ministry of Interior in charge of the NPMSW implementation, were organized during a World Bank country mission in November 2008. The relevant information and data required for the CDM PoA development were collected through a survey of the 14 targeted landfills (see survey template in appendix B). Based on the information collected during the mission first phase, an assessment model of the biogas potential was developed for each targeted landfill. The PoA expected ERs were then evaluated for two possible scenarios: an optimistic scenario assuming that all the eligible landfills will develop CDM under the program for both the biogas capture and electricity generation options and a more conservative scenario assuming gas flaring option only in most promising landfills. The required investment and Operating and Maintenance (O&M) costs were estimated for both scenarios. The cash flows of the two options of the program were then determined and the resulting Internal Rates of Return (IRR) were computed. This report presents the outcomes of the mission. The PoA development for the NPMSW is summarized in the filled WB standard Program Idea Note provided in Appendix C. 2- OBJECTIVE OF THE MISSION The objective of the mission is to develop CDM Program of Activities (PoA), based on a programmatic approach for CDM Project Activities (CPA) in solid waste sector in Morocco. More specifically the assignment consists of the assessment and validation of the feasibility of a nationwide CDM PoA for the solid waste in Morocco and the development of a Program Idea Note (PIN) summarizing the results of the program assessment. 3- TASKS OF THE MISSION Consistent with the above objective, the main tasks of the assignment, according to the mission TORs (See annex A), comprise the following activities: 5 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. 1. Meet with the concerned stakeholders (FEC, the Ministry of Interior, the municipalities and landfill operators, etc.) to collect the relevant information and data needed for the PIN development and the financial analysis of the proposed CDM Program of Activities. 2. Determine a likely scenario for the portfolio of projects (CPAs) that will be included in this MSW PoA and an estimate of the total amount of Emission Reductions (ERs) generated by the PoA. The landfill projects to be reviewed in priority include major projects such as Oujda, Rabat, Agadir, Fès, Marrakech, Casablanca, El Jadida, Meknes, Tétouan, Tangiers and smaller sites such as Al Hoceima, Essaouira and Berkane. Based on information collected on individual projects and their respective construction and operation schedule the consultant will prepare an annual breakdown of such ERs over a 10 years period (2009-2018). 3. Provide a preliminary analysis of baseline and additionality. 4. Based on the PNDM objectives and the review of the portfolio of potential CPAs, define an outline for a generic CPA (identify the main common characteristics of CPAs, propose eligibility criteria for CPAs to be included in this MSW PoA). 5. Review the project proposed by the municipality of Oujda taking into account the recommendation of the 41st EB meeting concerning eligibility of projects for which activity has started. Considering the current stage of the project and action already taken by the municipality (landfill operator) for the development of a CDM project, give an opinion and recommendations regarding the possibility to include this particular project in the contemplated MSW PoA. 6. From the review of landfill projects likely to be included in the proposed MSW PoA, identify at least one landfill project which could be submitted as the CPA specific when preparing the PDD for the registration of this MSW PoA. The newly constructed Oum Azza landfill in Rabat will be reviewed in priority as part of this selection process. 7. Based on information collected from municipalities (and landfill operators) and consistent with the agreed scenario for the portfolio of projects, prepare a financial analysis required for this PoA using the format prescribed by the World Bank PIN template. 8. Prepare a brief summary of the major environmental and socio-economic benefits (local and global) expected from the PoA. 9. Complete all PIN sections as appropriate. 10. Organize a Capacity Development workshop, for the purposes of dissemination and learning, providing an overview of the CDM market, across sectors, to explore CDM potential across in Morocco. The workshop will also cover the findings and outcomes of the mission. 6 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. 4- DATA AND INFORMATION COLLECTION AND GATHERING Meetings with the FEC, the Ministry of Interior (Direction de l’Eau et de l’Assainissement), the private operators Pizzorno/Segedema and Ecomed/Edgeboro were organized in November 2008 during the WB mission in Morocco. It should be noted that Segedema is responsible for the MSW landfilling in Oum Azza (Rabat/Salé, Témara et Skhirat), My Abdellah (El Jadida et My Abdellah), Marrakech, Al Hoceima and Akreuch landfills; whilst Ecomed is in charge of Fès and Casblanca landfills. These two operators cover more 80% of the sanitary land filled municipal waste in Morocco. A concise survey template has been developed to gather the specific information of each of the targeted landfill (see annexe B). The main information sought comprises among other relevant data: ü Waste stream and characterization; ü Opening and closing landfills dates; ü Planning for the rehabilitation and new landfills sanitary projects; ü Contractual arrangements; ü CDM status, ü Etc. The survey templates were sent by FEC to the program targeted 14 landfills (Agadir, Akreuch, Berkane, Casablanca, El Hoceima, El Jadida, Essaouira, Marrakech, Meknès, Fès, Oujda, Rabat, Tanger and Tétouan). The survey templates have also been sent to the private operators in charge of the landfills for information cross checking. The follow up was done by the FEC and specific complementary information when required, was gathered directly by phone from the concerned local contacts. Overall, at the exception of Essaouira and Akreuch, all the filled survey templates were collected (See appendix D). The following table summarizes the main characterization data of the targeted landfills. Besides the information gathered in the organized meetings and through the landfills survey, important reference documents were provided by FEC, namely: ü PNDM Plan d’Action 2008 – 2012; Ministère de l’Intérieur, 2008. ü Assistance à Maîtrise d’ouvrage des collectivités locales pour la mise en œuvre des projets MDP, Dr. Lahbabi, Janvier 2008. ü Rapport d’expertise technique sur six sites d’enfouissement, Biothermica, Février 2008. The reference documents were analyzed and pertinent information for the PIN development was integrated in the PoA concept definition. 7 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. LANDFILLS GENERAL INFORMATION Waste generated Opening Expected Contract Annual Operator Remarks-CDM provisions LANDFILL/ Closing Start COMMUNE/CITY t/year growth Year Period year date rate Urbaser- Agadir 200 750 3,5% Tecmed 2009 2034 2008 10 The CERs will be owned a 100% by the Agadir commune Akreuch Landfill closed and rehabilitated Berkane 43 800 3% Veolia 2004 2024 2007 10 Revenues will be distributed as follows: from selling the CERs (30% commune and 70% operator) and from selling the Casablanca 1 204 500 3% Ecomed 2011 2026 2011 15 electricity (30% commune and 70% operator). The operator will be in charge of the CDM process and will support its costs. El Hoceima 29 930 3% Segedema 2008 2023 2008 15 El Jadida 60 955 4% Segedema 11/17/2006 2021 11/17/2006 15 Essaouira 21 900 3% GMF 2006 2006 10 Survey templated not filled The PDD is under validation - Revenues from selling the CERs Fès 279 225 3% Ecomed 2004 2034 2004 30 will be distributed as follows: 60% commune and 40% operator under Marrakech 262 800 4,5% 2009 2029 2009 15 negociation The current site is be rehabilated. Land acquisition underway for Meknès 182 500 4,5% Commune 2010 2030 a new sanitary landfill to be outsourced. Contractual obligation for the operator to capture the biogas and generate electrcity. The City is under the obligation to Oujda 98 550 3,6% CSD & CRB 10/17/2005 2020-2025 2005 15-20 comenpensate the operator in case the expected electricity revenues is lower than the fixed targeted level. Revenues from selling the CERs will be distributed as follows: Rabat 511 000 3,0% Tecmed 12/17/2007 12/31/2027 2007 20 90% communes and 10% operator The current site is be rehabilated. The preparation of the site of a Tanger 219 000 3,0% Tecmed 2012 2032 new sanitary landfill is planned for 2012 Tétouan 153 300 4,5% Commune 1990 2015 No plans for a new landfill TOTAL 3 268 210 3,3% 8 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. 5- MUNICIPAL SOLID WASTE NATIONAL CONTEXT Morocco has experienced in the last two decades a strong growth of the urban population and a proliferation of uncontrolled city suburbs with incidentally a sharp increase for municipal services: solid waste and waste water sanitation services, public health, education, roads etc. By law, the solid waste management and related sanitary services are the responsibility of local authorities. The urban population growth combined with insufficiencies of local financial resources and human capacities and with the lack of an adequate legal and regulatory framework for integrated waste management has resulted in poor solid waste sanitation services. Till recently, most of municipal solid waste if collected was deposited in open uncontrolled dumps. The World Bank has estimated the cost of the environmental damages for the year 2000 at 13 billions MAD representing 3.7% of the Morocco’s annual GDP1. The cost of damages on public health and natural resources due to solid waste associated pollution has been evaluated for the same year at 1.725 billion Dirham2 or 0.5% of the national GDP. In this context, public authorities have adopted an ambitious reform for the upgrading of the solid waste management. A new law requiring local authorities to improve sanitation services has been enacted in 2006. The legal framework for the private sector participation in streets sweeping, municipal waste collection and land filling has been set up. Also, a vigorous national program for municipal solid waste 3 (NPMSW) has been approved with a total budget of 37 billion MAD for the period 2007-2015. Around 50% of the solid waste generated is currently deposited or will be deposited in the near future, in sanitary landfills. Specific objectives set for the NPMSW from 3.4 million tons collected in 2007 to Collection and Cleanup 6.6 million tons in 2020. Sanitary landfills with liquid leachate Landfills treatment and biogas elimination for main cities Rehabilitation of all uncontrolled landfills Rehabilitation and open dumps sites ( 300 sites) Setting up units of waste sorting to treat Recycling and recovery 20% of all waste collected 1 Evaluation du coût de la dégradation de l’environnement, 30 juin 2003, Rapport N° 25992-MOR, World Bank. 2 1$ = 8,71 MAD, November 28th, 2008 rate 3 Programme National des Déchets Ménagers 9 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Main sector indicators MSW Indicator Unit Urban Rural Total Background Information Population million 17,41 13,44 30,85 million 5,21 1,47 6,68 t/year Municipal Solid Waste Kg/capita/ 0,82 0,30 0,59 day Annual MSW % 4% 1% 3,3% generation growth rate Performance ratios MSW Collection rate % 95% 0% 74% MSW recycled % 6,5% 0% 5% MSW Sanitary landfills % 62% 0% 50% Open dumps % 38% 100% 50% Concerning CDM it is worth mentioning that the NPMSW has integrated the Carbon Finance in its financing scheme and that the activities planned in the NPMSW framework have to consider the carbon revenues for their financing and thus implementation. In this context, the FEC has been recently mandated by the Government to develop and help manage the CDM projects of all municipalities and cities in Morocco. The CDM program for LFG capture and elimination or use is implemented in the framework of a MoU to be signed by the FEC and the WB. The common objective of the established collaboration is to develop and handle the PoA carbon credits for the local municipalities and cities. 6- DESCRIPTION OF THE PROPOSED CDM PROGRAM The Moroccan Government has recently engaged an ambitious program for the reform of the solid waste sector. A new law has been enacted requiring the municipalities to improve their sanitary services and their waste disposal practices, to rehabilitate/close open dump sites and to promote the construction of sanitary landfills. An ambitious National Program on Municipal Solid Waste (NPMSW) covering a wide range of institutional, financial, environmental and social upgrading actions is planned for the next fifteen years. However, the new legal framework does not enforce the LFG elimination or reuse and most cities, faced with the burden of new landfill financing, have tendency to save on LFG capture and elimination investment projects. 10 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. The proposed CDM program will help, through carbon financing, develop investment in LFG sound management practices by promoting CDM projects for LFG capture, flaring or valorisation for electricity generation. The CDM program aims at the certification, under the CDM programmatic framework, of the GHG emissions reductions resulting from the investment projects in LFG elimination. 7- SCENARIOS FOR THE CPA PROJECTS Old landfills: As explained above in the MSW sector context, most of the old landfills are uncontrolled dumping sites presenting high public health risks and significant negative impacts on the environment. In the absence of soil compacting and covering and with the prevalence of spontaneous fires, the potential of biogas of most of the old landfills is considered very low to insignificant. A recent technical assessment mission has concluded that on the 11 old landfills visited; only Akreuch could present a good biogas potential that should justify an eventual CDM development for the site4. Based on this recommendation, only new sanitary landfills and the Akreuch site have been considered for the MSW CDM program. Targeted landfills: General information on the 14 considered landfills is provided in the above table. On this initial list three have been discarded: Fès, Essaouira and Tétouan landfills. The exclusion of these landfills has been justified by the following: ü A PDD has been developed for the Fès landfill by the private operator Ecomed. The PDD is currently under validation by the DOE and cannot possibly be considered for the program; ü The waste stream of Essaouira is estimated at 22 000 t/year5. This makes the biogas capture and development under CDM not very viable; ü Tétouan landfill is under the Commune management. Till recently, the landfill was operated as an uncontrolled open dump for waste disposal. A rehabilitation project has been implemented in 2007. Biogas capture can be envisioned for the new waste bins but the landfill is to be closed as early as 2015. The relatively short life period of the landfill makes the CDM development project not very viable. On the initial considered sanitary landfills list, 11 have been retained for the CDM assessment: Akreuch as old rehabilitated landfill and ten new sanitary landfills comprising Agadir, Berkane, Casablanca, El Hoceima, El Jadida, Marrakech, Meknès, Oujda, Rabat and Tanger. 4 See 2007 Biothermica report on the assessment of biogas in 11old landfills: Rabat, Kénitra, Tétouan, Oujda, El Jadida, Marrakech, Casablanca, Agadir, Meknès, Fès and Tanger 5 Expected CERs around 6 000 t CO2/year on average 11 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Overall, the 11 targeted landfills receive around 2,9 millions tons of waste a year representing 56% of the collected MSW nationwide. The following graph presents the proportion of waste handled by each of the targeted landfills. Tanger Akreuch 8% 3% Agadir 7% Rabat 18% Berkane 2% Oujda 3% Meknès Casablanca 6% 41% Marrakech El Jadida El Hoceima 9% 2% 1% It should be noted that Akreuch has been closed and rehabilitated since 2006.The above graph is based on waste received in 2006. Casablanca and Rabat are the two most important landfills in Morocco. They represent almost 60% of the total waste treated in sanitary landfills. It is thus important for the program that Casablanca and Rabat be part of the CDM PoA. Given the institutional complexity of the two sites, the acceptance and approval of the city councils and the concerned Wilayas will require massive lobbying and awareness rising efforts. In this regards, meetings should be organized with high level decision makers to enable the CDM development of these important landfills under the present PoA. Adopted Scenarios For the purpose of the CDM PoA development, two scenarios have been adopted: an optimistic scenario, referred to as scenario I, including all the targeted landfills and a less favourable scenario, referred to as scenario II, based on the more likely sanitary landfills to be developed under the program. Concerning the CDM options, as stated above, the LFG could be captured and either flared or used for electricity generation. Additional carbon credit could be then claimed for biogas revalorisation. However, this latter option is capitalistic in terms of initial investment. It also requires high technical capacity and experience in power generation. Given this constraint, the electricity generation option will be considered only for the optimistic scenario case. 12 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. The less favourable scenario is based on eight most promising landfills excluding Akreuch, Casablanca and Oujda landfills from the initial list. This can be justified by the following: ü Akreuch is an old landfill that have been closed and rehabilitated in 2007. The estimation of the biogas is very rough considering the absence of a well documented management practice and fire prevalence history. In fact, site test measurements should be carried out to better assess the site’s biogas potential. ü As explained, the Casablanca institutional situation is highly political and it is expected that massive awareness rising is needed to facilitate the city council approval of the CDM development under the program. ü As discussed in paragraph 11 on CPA eligibility, the new Oujda landfill has been operational since 2005 as a sanitary landfill. The outsourcing contract requires the operator to invest in biogas collection and valorisation for power generation. Also, the operator has been given the guarantee of the assumed electricity revenues. These revenues are explicitly stated in the contract and the City has the obligation to compensate the operator in case of lower revenues. This hinder the project CDM additionality and makes it hardly eligible for CDM development. Moreover, it looks like the electricity generation and thus the expected revenues have been over estimated. This situation entails potential conflicts between the City and the operator. Accordingly, the retained two scenarios are detailed below: Waste generated in ton/year LANDFILL Scenario I Scenario II Akreuch 98 100 Agadir 200 750 200 750 Berkane 43 800 43 800 Casablanca 1 204 500 El Hoceima 29 930 29 930 El Jadida 60 955 60 955 Marrakech 262 800 262 800 Meknès 182 500 182 500 Oujda 98 550 Rabat 511 000 511 000 Tanger 219 000 219 000 TOTAL 2 911 885 1 510 735 13 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. 8- PROGRAM SCHEDULE The CDM program preparation and registration will require 18 to 24 months. The expected first crediting year could thus be planned for 2011. Based on the information collected on individual projects and their respective construction and operation planning, the following tentative schedule has been established. The first crediting year is planned for each landfill on the basis of the program effective start year (2011) allowing in the same time, for at least three year preparation period after the landfill opening date. This period is required for the construction, bins arrangements and biogas initial production. Opening Expected Crediting period LANDFILL Closing Year Start year End year year Akreuch 1985 2006 2011 2031 Agadir 2009 2034 2012 2032 Berkane 2004 2024 2011 2031 Casablanca 2011 2026 2014 2034 El Hoceima 2008 2023 2011 2031 El Jadida 2006 2021 2011 2031 Marrakech 2009 2029 2012 2032 Meknès 2010 2030 2013 2033 Oujda 2005 2025 2011 2031 Rabat 2007 2027 2011 2031 Tanger 2012 2032 2015 2035 Based on the individual projects crediting period the CDM program activity could be planned for 25 year period starting 2011. The choice of the 10 year period for the Carbon Partnership Facility (CPF) should be done on the basis of the CERs generation expected schedule to maximize the carbon credits to be managed in the framework of this partnership (See next paragraph). 14 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. 9- EMISSIONS REDUCTION EVALUATION 9-1 Program activities and CDM methodology The CPAs of the CDM program aim at LFG capture and flaring or utilization for electricity generation. As such, the program activities are eligible for the use of the approved consolidated methodology ACM00016 This methodology is specifically suited for the program planned activities that aim at the capture and flaring of the LFG or its use as a fuel for electricity generation. The methodology covers both the program’s flaring and electricity generation activities. In this regard, the methodology specifies that it is applicable to landfill gas capture project activities, where the baseline scenario is the partial or total atmospheric release of the gas and the project activities include situations such as: (a) The captured gas is flared; and/or (b) The captured gas is used to produce energy (e.g. electricity/thermal energy); (c)The captured gas is used to supply consumers through natural gas distribution network. The CDM monitoring requirements are defined in section III of the methodology. The monitoring methodology is based on direct measurement of the amount of landfill gas captured and destroyed at the flare and at the electricity generating station. The monitoring plan provides for continuous measurement of the quantity and quality of LFG flared. The main variables that need to be determined are the quantity of methane actually captured, quantity of methane flared, the quantity of methane used to generate electricity. 9-2 Avoided methane emissions evaluation The baseline emissions of each landfill are evaluated according to the methodology provided equation: BEy= ( MDproject,y – MDBL,y)*GWPCH4 + ELLFG,y * CEFelec,BL,y + ETLFG,y * CEFther,BL,y Where: 6 http://cdm.unfccc.int/UserManagement/FileStorage/R5FE555DMDJ49EH3JHZUGV83GWX8LP 15 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. BEy = Baseline emissions in year y (tCO2e) MDproject,y = The amount of methane that would have been destroyed/combusted during the year, in tons of methane (tCH4) in project scenario MDBL,y = The amount of methane that would have been destroyed/combusted during the year in the absence of the project due to regulatory and/or contractual requirement, in tons of methane (tCH4) GWPCH4 = Global Warming Potential value for methane for the first commitment period is 21 tCO2e/tCH4 ELLFG,y = Net quantity of electricity produced using LFG, which in the absence of the project activity would have been produced by power plants connected to the grid or by an on-site/off-site fossil fuel based captive power generation, during year y, in megawatt hours (MWh) CEFelecy,BL,y = CO2 emissions intensity of the baseline source of electricity displaced, in tCO2e/MWh. ETLFG,y = The quantity of thermal energy produced utilizing the landfill gas, which in the absence of the project activity would have been produced from onsite/offsite fossil fuel fired boiler, during the year y in TJ CEFther,BL,y = CO2 emissions intensity of the fuel used by boiler to generate thermal energy which is displaced by LFG based thermal energy generation, in tCO2e/TJ. The avoided methane emissions for each individual targeted landfill are evaluated using a first decay based model and the latest version of the UNFCCC tool to determine methane emissions avoided from disposal of waste at a solid waste disposal site7 7 http://cdm.unfccc.int/methodologies/Tools/meth_tool04_v04.pdf 16 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. y 16 . F . DOC f . MCF .∑∑W j , x . DOC j .e j −k ( y − x) −k BECH 4, SWDS , y = ϕ .(1 − f ).GWPCH 4 .(1 − OX ). .(1 − e j ) 12 x =1 j Where: BECH4,SWDS,y = Methane emissions avoided during the year y from preventing waste disposal at the Solid Waste Disposal Site (SWDS) during the period from the start of the project activity to the end of the year y (tCO2e) φ = Model correction factor to account for model uncertainties (0.9) f = Fraction of methane captured at the SWDS and flared, combusted or used in another manner GWPCH4 = Global Warming Potential (GWP) of methane, valid for the relevant commitment period OX = Oxidation factor (reflecting the amount of methane from SWDS that is oxidised in the soil or other material covering the waste) F = Fraction of methane in the SWDS gas (volume fraction) (0.5) DOCf = Fraction of degradable organic carbon (DOC) that can decompose MCF = Methane correction factor Wj,x = Amount of organic waste type j prevented from disposal in the SWDS in the year x (tons) DOCj = Fraction of degradable organic carbon (by weight) in the waste type j kj = Decay rate for the waste type j j = Waste type category (index) x = Year during the crediting period: x runs from the first year of the first crediting period (x = 1) to the year y for which avoided emissions are calculated (x = y) y = Year for which methane emissions are calculated This model has been applied for each of the 11 targeted landfills using the following assumptions: ü Default value of 0,9 for the correction factor model assumption for the φ ü Capture fraction for LFG 50% ü Oxidation factor : 0, given the anaerobic conditions of the new sanitary landfills ü Default value of 0,5 for the methane concentration in the biogas ü The 2006 IPCC default value of 0,5 is used for DOCf 17 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. ü A value of 1 is used for the methane correction factor as recommended by IPCC 2006 Guidelines for National Greenhouse Gas Inventories, for anaerobic managed landfills ü The DOC was calculated for each landfill using the specific waste composition of the landfill and the defaults8 provided for each waste type (paper, textile, food waste, etc.) ü A value of 0,1 has been adopted for the waste decay rate k based on the 2006 IPCC guidelines for mostly organic waste, highly humid and for mean annual temperatures less than 20°C. According to the IPCC classification, these are moderate degradation conditions. It should be noted that k can be derived from the following equation: k= Ln (2) / half life period. A 0,1 value for k is equivalent to a decay period of 14 years. It is worth mentioning that there is no regulatory requirement in Morocco for methane capture and flaring. However, as a conservative approach, it was assumed that in the absence of the program activity, 3% of the methane produced would have been vented for security reasons. These emissions are deducted, as baseline emissions, from the evaluated captured methane. 9-3 Electricity baseline emissions evaluation In the absence of the program activity, the electricity produced using LFG, would have been produced by power plants connected to the grid. Accordingly, the evaluation of the baseline emissions for the electricity generation activity is based on the net electricity generated times the emission factor of the grid. The net electricity generated has been evaluated using an efficiency of 34% of LFG based engines manufactured by GE Jenbacher9. A provision of 5% of the produced electricity has been attributed to the power plant auxiliaries’ energy auto- consumption. The grid emission factor has been evaluated according to the UNFCCC tool10 to calculate the emission factor for an electricity system; using the ONE power stations consumption and production of the years 2005, 2006 and 2007. The data was used, as required by the UNFCCC procedures, to derive the Build Margin (BM) CO2 emission factors for the last three years and the current Operating Margin (OM) CO2 emission factor. The Combined margin (CM) CO2 emission factor is then derived as average of the OM and the BM factors. The results of the grid CO2 Emission Factor (CEF) computations are presented below: 8 IPCC 2006 Guidelines for National Greenhouse Gas Inventories (Volume 5, Tables 2.4 and 2.5) 9 www.gejenbacher.com 10 http://cdm.unfccc.int/methodologies/Tools/EB35_repan12_Tool_grid_emission.pdf 18 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. CO2 Emission Factor CEF Margins tCO2 per MWh Operating Margin (OM) 2005 0,8134 2006 0,7643 2007 0,7121 Average OM over 2005-2007 0,7633 Build Margin (BM) 2007 0,7183 Combined Margin (Average OM and BM) 0,7408 The required power capacity has been determined assuming an average of 7 200 operating hours a year. 9-4 Emissions reduction Based on the approved methodology ACM001 and its tools, a comprehensive evaluation model has been developed for the ERs computations. The ERs evaluations have been carried out on a yearly basis for each of the 11 targeted landfills. A 21 year crediting period has been considered taking into account the specific operational schedule of each landfill. The electricity option has been considered for all the new landfills11 excepting El Hoceima for which the low waste stream (30 000 t/year) makes the use of LFG for electricity generation not viable. The expected net electricity production using the LFG has been evaluated and the required power capacity has been estimated on the basis of 300 operational days a year. The ERs of the electricity generation option were then determined using the grid CEF. The results of the ERs evaluations are detailed below for both retained scenarios ( See paragraph 7). Scenario I: Overall, for the favorable scenario I (all the eleven landfills projects carried out in the CDM Program framework using the LFG for electricity generation), the expected total CERs over 25 years (2011-2035) is evaluated at 26,17 millions CERs of which 86,5% are attributed to CH4 elimination and the rest to the electricity generation. Scenario II: The scenario II is based on LFG flaring in the 8 more likely landfills to be carried out under the CDM program (Agadir, Berkane, El Hoceima, El Jadida, Marrakech, Meknès, Rabat and Tanger). The expected total CERs production during the program period under the scenario II was estimated at 13,31 millions. No electricity generation has been envisioned for this scenario. 11 The rehabilitated closed Akreuch landfill is not considered for electricity generation option due to the uncertainties related to the biogas assessment 19 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. The following table features the expected annual CERs generation for the two considered scenarios. Expected CERs generation In ton eq. CO2 Year Scenario I Scenario II 2011 196 286 119 498 2012 301 123 210 081 2013 375 490 274 201 2014 640 343 314 081 2015 775 127 389 613 2016 872 552 434 862 2017 966 409 478 731 2018 1 057 231 521 458 2019 1 145 510 563 264 2020 1 231 698 604 352 2021 1 316 209 644 911 2022 1 393 922 680 365 2023 1 468 954 713 843 2024 1 543 780 747 647 2025 1 615 293 779 031 2026 1 678 276 811 119 2027 1 646 148 843 981 2028 1 575 825 838 133 2029 1 515 595 835 775 2030 1 435 083 811 202 2031 1 319 226 751 869 2032 943 043 494 850 2033 598 837 228 258 2034 436 668 115 807 2035 121 477 104 786 TOTAL 26 170 106 13 311 717 20 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. It should be mentioned that the CERs generated under the CDM program over a ten year period will be handled under the Carbon Finance Partnership CPF. Considering the above expected CERs generation schedule, it is recommended to fix the CPF ten year handling period as 2011-2020. The following table presents the CERs to be handled under the CPF during this period. Expected CERs generation during the CPF period In ton eq. CO2 Year Scenario I Scenario II 2011 196 286 119 498 2012 301 123 210 081 2013 375 490 274 201 2014 640 343 314 081 2015 775 127 389 613 2016 872 552 434 862 2017 966 409 478 731 2018 1 057 231 521 458 2019 1 145 510 563 264 2020 1 231 698 604 352 Total t CO2 7 561 768 3 910 139 Average t CO2/year 756 177 391 014 21 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Scenario I : CERs generation expected schedule Ton eq. CO2 Year Agadir Casa Al Hoceima Marrakech Meknès Rabat El Jadida Tanger Akreuch Oujda Berkane Total 2011 4 780 108 855 15 587 34 974 23 367 8 723 196 286 2012 38 256 5 804 43 684 127 071 17 824 31 646 26 654 10 183 301 123 2013 46 589 6 775 53 510 34 173 144 411 19 997 28 635 29 828 11 573 375 490 2014 54 549 218 389 7 700 63 029 41 859 160 984 22 118 25 910 32 904 12 901 640 343 2015 62 185 265 194 8 584 72 301 49 306 176 889 24 198 42 950 23 444 35 901 14 175 775 127 2016 69 543 309 572 9 432 81 377 56 559 192 217 26 248 52 155 21 213 38 833 15 404 872 552 2017 76 666 351 815 10 249 90 307 63 659 207 051 28 276 60 883 19 194 41 715 16 593 966 409 2018 83 591 392 190 11 040 99 138 70 645 221 468 30 293 69 191 17 368 44 559 17 748 1 057 231 2019 90 356 430 938 11 809 107 913 77 553 235 536 32 306 77 131 15 715 47 378 18 875 1 145 510 2020 96 991 468 281 12 559 116 672 84 417 249 320 34 323 84 752 14 219 50 183 19 980 1 231 698 2021 103 529 504 420 13 294 125 454 91 269 262 878 36 352 92 096 12 866 52 984 21 066 1 316 209 2022 109 996 539 542 14 017 134 295 98 139 276 264 32 893 99 204 11 642 55 792 22 139 1 393 922 2023 116 419 573 815 12 683 143 229 105 055 289 529 29 763 106 111 10 534 58 614 23 202 1 468 954 2024 122 822 607 395 11 476 152 291 112 044 302 717 26 930 112 851 9 532 61 461 24 259 1 543 780 2025 129 228 640 425 10 384 161 511 119 133 315 873 24 368 119 455 8 625 64 341 21 950 1 615 293 2026 135 657 673 037 9 396 170 921 126 346 329 036 22 049 125 951 7 804 58 218 19 862 1 678 276 2027 142 130 608 989 8 502 180 551 133 707 342 243 19 951 132 365 7 061 52 678 17 972 1 646 148 2028 148 665 551 036 7 693 190 429 141 240 309 674 18 052 138 720 6 389 47 665 16 261 1 575 825 2029 155 281 498 598 6 960 200 586 148 968 280 205 16 334 145 040 5 781 43 129 14 714 1 515 595 2030 161 993 451 150 6 298 181 497 156 913 253 540 14 780 151 343 5 231 39 025 13 314 1 435 083 2031 146 578 408 217 5 699 164 226 141 980 229 413 13 373 157 650 4 733 35 311 12 047 1 319 226 2032 132 629 369 370 148 597 128 469 163 977 943 043 2033 334 220 116 244 148 373 598 837 2034 302 415 134 253 436 668 2035 121 477 121 477 TOTAL 2 223 653 9 499 009 195 131 2 681 519 2 097 680 5 015 175 506 013 2 335 931 322 516 940 539 352 941 26 170 106 22 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Scenario II : CERs generation expected schedule Ton eq. CO2 Year Agadir Casa Al Hoceima Marrakech Meknès Rabat El Jadida Tanger Akreuch Oujda Berkane Total 2011 4 780 93 898 13 445 - - 7 375 119 498 2012 32 999 5 804 37 682 109 612 15 375 - - 8 609 210 081 2013 40 188 6 775 46 157 29 478 124 569 17 249 - - 9 784 274 201 2014 47 054 0 7 700 54 369 36 108 138 864 19 079 - - 10 907 314 081 2015 53 640 0 8 584 62 366 42 531 152 584 20 873 37 049 - - 11 984 389 613 2016 59 988 0 9 432 70 196 48 788 165 806 22 641 44 989 - - 13 023 434 862 2017 66 132 0 10 249 77 899 54 912 178 602 24 391 52 518 - - 14 028 478 731 2018 72 106 0 11 040 85 516 60 938 191 038 26 131 59 684 - - 15 005 521 458 2019 77 941 0 11 809 93 086 66 897 203 173 27 867 66 533 - - 15 958 563 264 2020 83 665 0 12 559 100 641 72 818 215 063 29 607 73 107 - - 16 892 604 352 2021 89 304 0 13 294 108 216 78 729 226 758 31 357 79 442 - - 17 810 644 911 2022 94 883 0 14 017 115 842 84 655 238 305 28 373 85 573 - - 18 717 680 365 2023 100 423 0 12 683 123 549 90 620 249 747 25 673 91 531 - - 19 616 713 843 2024 105 946 0 11 476 131 366 96 649 261 124 23 230 97 345 - - 20 509 747 647 2025 111 472 0 10 384 139 319 102 764 272 472 21 019 103 042 - - 18 558 779 031 2026 117 018 0 9 396 147 437 108 986 283 826 19 019 108 646 - - 16 792 811 119 2027 122 601 0 8 502 155 743 115 336 295 219 17 209 114 178 - - 15 194 843 981 2028 128 238 0 7 693 164 264 121 834 267 125 15 572 119 660 - - 13 748 838 133 2029 133 945 0 6 960 173 025 128 500 241 705 14 090 125 111 - - 12 440 835 775 2030 139 735 0 6 298 156 559 135 353 218 703 12 749 130 548 - - 11 256 811 202 2031 126 438 0 5 699 141 661 122 472 197 891 11 536 135 988 - - 10 185 751 869 2032 114 406 0 128 180 110 817 141 447 494 850 2033 0 100 272 127 986 228 258 2034 0 115 807 115 807 2035 104 786 104 786 TOTAL 1 918 121 - 195 131 2 313 075 1 809 457 4 326 085 436 486 2 014 972 - - 298 389 13 311 717 23 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. 9-5 Electricity generation The electricity generation option is considered under scenario I. The expected total electricity generated has been evaluated at 4 767 GWh over the program period. This is the equivalent of a saving of 1,24 million Ton Oil Equivalent or 49 600 toe/year for 25 years! The total maximum installed capacity of the biogas based power stations has been evaluated at 54 MW! In the actual context of deficit in the electricity supply and load shedding, the additional capacity will be very useful. The following table presented the yearly expected electricity generated and the schedule of the required power installed capacity. Electricity generation expected schedule Installed Power Capacity in Electricity MW Year GWh Year Cumulated 2 011 29,3 6,1 6,1 2 012 49,2 4,0 10,1 2 013 63,4 3,0 13,1 2 014 112,9 8,6 21,7 2 015 138,2 5,3 27,0 2 016 156,5 2,0 29,0 2 017 174,2 2,0 31,0 2 018 191,3 4,0 35,0 2 019 207,8 1,0 36,0 2 020 224,0 3,0 39,0 2 021 239,8 39,0 2 022 254,3 3,0 42,0 2 023 268,7 3,0 45,0 2 024 283,0 3,0 48,0 2 025 296,6 48,0 2 026 308,6 2,0 50,0 2 027 302,9 1,0 51,0 2 028 290,1 2,0 53,0 2 029 279,1 1,0 54,0 2 030 264,4 54,0 2 031 243,1 54,0 2 032 174,9 54,0 2 033 111,1 54,0 2 034 81,0 54,0 2 035 22,5 54,0 Total 4 766,8 54,0 24 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Electricity generation expected schedule In GWh Year Agadir Casa Marrakech Meknès Rabat El Jadida Tanger Oujda Berkane Total 2 011 20,2 2,9 4,4 1,8 29,3 2 012 7,1 8,1 23,6 3,3 5,0 2,1 49,2 2 013 8,6 9,9 6,3 26,8 3,7 5,6 2,4 63,4 2 014 10,1 40,5 11,7 7,8 29,9 4,1 6,1 2,7 112,9 2 015 11,5 49,2 13,4 9,1 32,8 4,5 8,0 6,7 3,0 138,2 2 016 12,9 57,4 15,1 10,5 35,7 4,9 9,7 7,2 3,2 156,5 2 017 14,2 65,3 16,7 11,8 38,4 5,2 11,3 7,8 3,5 174,2 2 018 15,5 72,7 18,4 13,1 41,1 5,6 12,8 8,3 3,7 191,3 2 019 16,8 79,9 20,0 14,4 43,7 6,0 14,3 8,8 3,9 207,8 2 020 18,0 86,9 21,6 15,7 46,2 6,4 15,7 9,3 4,2 224,0 2 021 19,2 93,6 23,3 16,9 48,8 6,7 17,1 9,9 4,4 239,8 2 022 20,4 100,1 24,9 18,2 51,2 6,1 18,4 10,4 4,6 254,3 2 023 21,6 106,4 26,6 19,5 53,7 5,5 19,7 10,9 4,8 268,7 2 024 22,8 112,7 28,2 20,8 56,1 5,0 20,9 11,4 5,1 283,0 2 025 24,0 118,8 30,0 22,1 58,6 4,5 22,2 12,0 4,6 296,6 2 026 25,2 124,8 31,7 23,4 61,0 4,1 23,4 10,8 4,1 308,6 2 027 26,4 113,0 33,5 24,8 63,5 3,7 24,6 9,8 3,7 302,9 2 028 27,6 102,2 35,3 26,2 57,4 3,3 25,7 8,9 3,4 290,1 2 029 28,8 92,5 37,2 27,6 52,0 3,0 26,9 8,0 3,1 279,1 2 030 30,0 83,7 33,7 29,1 47,0 2,7 28,1 7,3 2,8 264,4 2 031 27,2 75,7 30,5 26,3 42,6 2,5 29,2 6,6 2,5 243,1 2 032 24,6 68,5 27,6 23,8 30,4 174,9 2 033 62,0 21,6 27,5 111,1 2 034 56,1 24,9 81,0 2 035 22,5 22,5 Total 412,4 1 761,8 497,4 389,1 930,2 93,9 433,3 175,1 73,6 4 766,8 25 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. The following figures present the evaluation results in terms of expected ERs and electricity generation schedule for scenario I and expected ERs schedule for scenario II. Scenario I: CERs and Electricity Generation Schedule 1800 500 1600 450 400 1400 350 Electricity generated in GWh 1200 CERs in 1000 t CO2 300 1000 250 800 200 54 MW 600 150 39 MW 400 100 200 50 0 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Power CERs GWh 26 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Scenario II: CERs Generation Schedule 900 800 700 CERs in 1000 T CO2 eq. 600 500 400 300 200 100 0 11 13 15 17 19 21 23 25 27 29 31 33 35 20 20 20 20 20 20 20 20 20 20 20 20 20 10- CDM ADDITIONALITY As designed, the program CPAs will involve the capture of the LFG and either flare it or use it as fuel for electricity generation. The additionality of the flaring option can be plainly established. Since there is no legal obligation for LFG flaring and this activity does not generate any revenue, the investment for LFG flaring, can only be justified by the CDM revenues. On the contrary, the use of the LFG as fuel to produce electricity generates additional revenues. In fact, the implementation of this option is very profitable and the investment could be easily justified by the expected revenues. Utmost attention should thus be given to the justification of the CDM additionality of the electricity generation option. In fact, the additionality should be justified in this case by other barriers rather than by the investment analysis. The Program additionality can be justified by the following arguments: a. there is no regulation or incentive scheme in place covering the LFG mandatory management ; 27 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. b. there is no incentives for municipalities to invest into flaring stations ; c. The baseline ( absence of LFG elimination practices) is the common practices; d. Most of the sanitary landfills projects with LFG elimination activities have considered the CDM ; e. The program activities are carried out in the framework of the National Program for Municipal Solid Waste (NPMSW). Carbon Finance has been integrated into the NPMSW financing scheme; f. The Private operators of the sanitary landfills are not keen to operate additional flaring stations and electricity generation units without the carbon finance benefits; g. Technology barrier: most of the landfills operators don’t have the experience and technological know how for the electricity generation units operations; h. Risk with electricity commercialization: the framework of electricity private generation has been approved but the electricity transport through the grid is not yet permitted; 11- CPAs ELIGIBILITY The proposed CDM Program Activity (CPA) consists of the LFG capture, flaring or use at a specific landfill. The specific CPA can be summarized as follows: ü Capture LFG of eligible existing or new landfills in Morocco; ü Flare the captured LFG to eliminate the landfill methane emissions; or ü Use the capture biogas as fuel to generate electricity. The generated electricity can be used for own usage of the city/operator or sold to ONE or other users. The PoA registration requires the establishment of eligibility criteria for the inclusion of CPAs in the PoA. The LFG flaring and utilization program targets medium and large new and upgrading landfills projects implemented in the framework of the NPMSW program. The old landfills have been discarded from the program based on the argument that they were managed as uncontrolled waste disposal dumps without waste covering. Most of the generated LFG has been already burned or emitted to the atmosphere. Most of the new sanitary landfills should satisfy the eligibility criteria of the Consolidated Approved Methodology ACM 0001 that will be used for the proposed CDM Program. However, the three following criteria should be used for the selection of the landfills CDM projects to be developed under the proposed program: 28 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. 1. Landfill size: Given the development and management cost of CDM projects it is recommended to limit the CPAs to the projects that can generate a minimum of 15 000 CERs/year or landfill receiving at least 40 000 t MSW/year. 2. Private management: Experience has shown that the management and operation of public sanitary services and particularly landfills operations requires a high technical capacity. With rare exceptions, local public management is not appropriate for these services. In fact most of the sanitary landfill new projects have been outsourced to private specialized companies. The CDM development will require additional professional resources for the measurements, data management and monitoring. Unless, the City/Commune could show a strong commitment for the landfill operations and mobilize very qualified staff, the landfills CDM projects should be limited to those outsourced to private companies 3. Contractual requirement: The CDM CPAs additionality is based on the fact that LFG capture and flaring or use is not mandatory by the national regulations or laws. The outsourcing contract should not make the flaring for the operator mandatory without linking it to a CDM project development. Otherwise, the LFG capture and flaring projects fall under the baseline scenario. The contractual arrangements should be CDM proofed before the project selection and development. Concerning the landfills to be considered under the program, the initial selection was based on the outsourced new controlled landfills in operation or under planning. The final selection has been justified in the above paragraph on the adopted scenarios. An additional investigation on the legal contractual arrangements should be carried out to make sure that the CDM contractual provisions don’t put at risk the projects additionality. Based on the preliminary information gathered on this issue during the mission, most of the private operator contracts won’t jeopardize the project’s additionality at the exception of probably, El Jadida and Oujda. The outsourcing contract of El Jadida was not available and thus could not be checked. But according to reliable sources, the operator has the obligation to flare the LFG. The exact wording of this obligation should be analyzed in the perspective of the project’s CDM additionality. The Oujda case has been discussed in paragraph 7. The operator contract has been analyzed for its compatibility with the projects additionality. The text of the contract’s CDM arrangement is presented below: 29 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. As explained in paragraph 7, the City guarantees to the operator the above expected electricity revenues. As stated in the contract, the operator is under the obligation to implement the project and the City guarantee the profitability of the project for the operator. In fact with this arrangement, the project should have a pay out time of less than four years just with the electricity revenues. This makes the project unlikely additional from the CDM perspective. 30 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. 12- TYPICAL CPA The CDM PoA registration procedures require the establishment of a typical CPA to be submitted to the EB with the registration application documents. The selected landfill should entail typical characteristics representing the future CPAs to be developed under the program. Given the targeted landfills, the typical CPA should have a representative size between 100 000 and 500 000 tons of MSW per year. The old landfill Akreuch and the new ones that could have eligibility problems should be excluded. Based on this, the initial list of the landfills that could be considered comprises the following landfills: Agadir, Marrakech, Meknès, Rabat and Tanger. According the implementation schedule, the crediting periods are planned for Tanger and Meknès respectively in 2015 and 2013. Ideally, the typical CPA should start with the planned PoA start year 2011. For the Oum Azza landfill (Rabat), discussions are underway to use the LFG for the new city Bab Zaer located nearby the landfill. The new city is developed by a private company that envisions an integrated valorisation of the LFG for the different new city needs. However, given the urgency to manage the biogas in this landfill, the operator has expressed his interests into joining the national PoA. Considering the agreement of the operator to join the PoA, the Oum Azza landfill is recommended as typical CPA. The main characteristics of this landfill are presented in the provided survey data forms and summarized in the general information table provided in Paragraph 3 of the present report. 31 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. 13- INVESTMENT ANALYSIS 13.1 Introduction The investment analysis has been carried out for the individual considered landfills and for the whole CDM program considering the two retained scenarios. The required investment and the O&M costs have been evaluated. The expected CERs and electricity revenues were determined and the CPAs resulting annual cash flows were computed. The IRRs of the CPAs and the PoA were then determined based on the evaluated cash flows. The results of the investment analysis are detailed in the following paragraphs. 13.2 Investment evaluation The CDM PoA investment comprises the required investments for the implementation of the targeted CPAs, namely: ü Initial CDM development costs ü LFG assessment measurements ü LFG gaz capture and flaring equipment; ü LFG engines based power generation stations; ü Monitoring equipment Initial CDM development costs: The estimated PoA and CPAs development costs to be considered in the investment program cost are presented in the following table: Development Costs PoA Tasks Cost in 1000 $ Pre-feasibility study and PIN development 20,0 PDD and typical CPA development 75,0 Public consultation 7,0 PDD and typical CPA Validation 25,0 Contractual development costs 30,0 Due diligence costs 30,0 Miscellaneous 20,0 Total 207,0 Individual CPAs development costs Tasks Cost in 1000 $ Pre-feasibility study and PIN development 5,0 PDD development 20,0 Public consultation 5,0 PDD validation 15,0 Miscellaneous 5,0 Total 50,0 32 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Note that the total CPA cost of 50 000 $ is an average cost. A 30% discount has been applied to small landfills namely Berkane, El Hoceima, El Jadida and Akreuch. The monitoring and verification costs along with the registration fees and PDD/CPA renewals costs have been included in the program O&M costs. LFG assessment measurements Given the uncertainties associated with the biogas potential in the old landfill of Akreuch, it is recommended to carry out, prior to the CDM development, a measurement campaign to assess the potential of biogas that can be captured. A provision of 35 000 $ has been provisioned as a cost of such campaign. Flaring investment costs: The flaring investment costs have been estimated using a fixed and variable costs partition. The fixed cost has been set for each landfill at 250 000 $ and the variable part proportional to the waste stream. A 20% of the initial investment has been provisioned for the flare system upgrading at mid-life (10 years). The estimated investment cost of individual flare system has been estimated between 0,364 million $ for Berkane to 3,48 millions $ for Casablanca. LFG engines based power generation stations: The power stations investment costs have been estimated using a unit cost of 1,2 millions $ per MW for important sized landfills ( more than 1,5 MW of power installed capacity) and 1,3 millions $ per MW for small sized landfills such as El Jadida et Berkane. Note that the electricity generation option was considered not viable for Akeuch and El Hoceima landfills. It is worthwhile to mention that the total investment for the power stations is not required up front. It has to be scheduled according to the LFG production rate. The following table present the required investment schedule for the different landfills power stations. Monitoring equipment: The investment for the monitoring equipment required for the CDM monitoring plan implementation has been estimated at 100 000 $ for each individual landfill. The schedule of the different components of the total required investment is presented in the tables below for the two retained scenarios. 33 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Investment Schedule for the power stations In 1000 $ Year Agadir Casa Marrakech Meknès Rabat El Jadida Tanger Oujda Berkane TOTAL 2009 2010 2011 4 800 780 1 200 650 7 430 2012 2 400 2 400 4 800 2013 2 400 1 200 3 600 2014 9 600 780 10 380 2015 1 200 1 200 2 400 960 650 6 410 2016 2 400 2 400 2017 1 200 1 200 2 400 2018 2 400 1 200 1 200 4 800 2019 1 200 1 200 2020 2 400 1 200 3 600 2021 2022 1 200 2 400 3 600 2023 1 200 1 200 1 200 3 600 2024 2 400 1 200 3 600 2025 2026 1 200 1 200 2 400 2027 1 200 1 200 2028 1 200 1 200 2 400 2029 1 200 1 200 2030 2031 2032 2033 2034 2035 TOTAL 6 000 22 800 7 200 6 000 12 000 1 560 6 000 2 160 1 300 65 020 Unit price in k $ 1 200 1 200 1 200 1 200 1 200 1 300 1 200 1 200 1 300 Maximum 5 19 6 5 10 1,2 5 1,8 1 54 capacity in MW 34 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. SCENARIO I : INVESTMENT SCHEDULE In 1000 $ CDM Development Flare Sytem Monitoring Year Power station cost Total cost cost equipment cost 2009 275 4 964 600 5 839 2010 197 1 133 200 1 530 2011 50 3 382 100 7 430 10 962 2012 50 819 100 4 800 5 769 2013 50 3 600 3 650 2014 25 10 380 10 405 2015 6 410 6 410 2016 2 400 2 400 2017 2 400 2 400 2018 4 800 4 800 2019 278 1 200 1 478 2020 67 3 600 3 667 2021 174 174 2022 46 3 600 3 646 2023 3 600 3 600 2024 3 600 3 600 2025 2026 2 400 2 400 2027 1 200 1 200 2028 2 400 2 400 2029 1 200 1 200 2030 2031 2032 2033 2034 2035 TOTAL 647 10 863 1 000 65 020 77 530 35 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. SCENARIO II : INVESTMENT SCHEDULE In 1000 $ CDM Development Flare Sytem Monitoring Year Power station cost Total cost cost equipment cost 2009 233 3 876 500 4 608 2010 154 1 133 200 1 487 2011 50 50 2012 25 819 100 944 2013 25 25 2014 25 25 2015 2016 2017 2018 2019 219 219 2020 67 67 2021 2022 46 46 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 TOTAL 512 6 159 800 0 7 471 36 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. 13.3 Operational and Maintenance costs The operational and maintenance costs associated with the implementation of the CDM program activities can be divided into the following five categories: ü CERs development costs ü Program renewals costs ü Monitoring and verification ü LFG capture and flaring system ; ü Power stations; The following table presents the underlying assumptions used for the evaluation of the different categories of the O&M costs. O&M cost category Costs evaluation According to the EB rules: Adaptation: 2% Registration CERs development costs: • 0 for less than 15 000 CERs registration and contribution to the • 0,1$/CER for the first 15 000 then 0,2 adaptation fund $/CER The maximum registration fee for a project is 350 000 $ Program renewal costs every 7 The renewal cost has been estimated at 60 000 years $ for three renewal times, or 180 000 $ 15 000 $ per year per considered CPA over the Monitoring and verification 21 year crediting period 6% of the initial investment cost per year during LFG capture and flaring system the 21 year crediting period. 12% of the initial investment cost per year Power stations during the 21 year crediting period. The resulting O&M costs schedule is presented in the following tables for the two retained scenarios. It should be noted that the CERs development fees have been evaluated on the basis of a reference price of 14 $ a CERs (or 10 €). This price level has been set for the sole purpose of the present evaluation exercise. It does not reflect forcibly the market value or a recommended CERs price. 37 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. SCENARIO I : O&M COSTS SCHEDULE In 1000 $ Monitoring and Flare Sytem Year CERs Development PoA renewals Power station Total verification O&M 2009 2010 2011 86 90 250 892 1 317 2012 132 120 364 1 468 2 084 2013 166 135 414 1 900 2 614 2014 291 150 623 3 145 4 209 2015 354 165 678 3 914 5 111 2016 402 165 703 4 202 5 472 2017 447 60 165 714 4 490 5 877 2018 490 165 719 5 066 6 441 2019 532 165 740 5 210 6 648 2020 572 165 746 5 642 7 125 2021 613 165 771 5 642 7 191 2022 650 165 782 6 074 7 672 2023 687 165 787 6 506 8 145 2024 723 60 165 808 6 938 8 695 2025 758 165 813 6 938 8 675 2026 789 165 838 7 226 9 019 2027 774 165 850 7 370 9 159 2028 740 165 856 7 658 9 419 2029 710 165 877 7 802 9 554 2030 670 165 882 7 802 9 520 2031 616 60 165 882 7 802 9 525 2032 445 75 557 5 760 6 837 2033 283 45 409 4 176 4 913 2034 207 30 343 3 456 4 036 2035 57 15 72 720 864 TOTAL 12 195 180 3 465 16 479 127 805 160 123 38 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. SCENARIO II: O&M COSTS SCHEDULE In 1000 $ Monitoring and Flare Sytem Year CERs Development PoA renewals Power station Total verification O&M 2009 2010 2011 51 60 179 289 2012 92 90 293 475 2013 121 105 343 568 2014 140 105 343 587 2015 174 120 398 692 2016 195 120 416 731 2017 216 60 120 427 823 2018 238 120 432 790 2019 258 120 432 809 2020 277 120 437 835 2021 296 120 455 872 2022 313 120 467 900 2023 330 120 472 921 2024 346 60 120 472 998 2025 361 120 477 959 2026 377 120 495 992 2027 393 120 507 1 019 2028 389 120 512 1 021 2029 387 120 512 1 019 2030 376 120 518 1 014 2031 348 60 120 518 1 046 2032 232 60 286 577 2033 107 30 137 274 2034 54 15 72 141 2035 49 15 72 136 TOTAL 6 118 180 2 520 9 669 18 487 39 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. 13-4 Revenues The program activities can benefit from two revenue sources: the carbon revenues set for the purpose of the present financial analysis at 14 $ a CER and the selling of the electricity generated. Concerning the electricity revenues, the generated energy can either be used by the City/ Commune or sold to the ONE. The direct use of the generated electricity would have higher benefits12 but would require technical arrangements with the distributors that could pose some legal constraints13. The most logical and simple selling scheme is through an agreement with ONE. The generated electricity should be injected in the national grid and purchased by ONE at the actual approved tariff fixed at 60% of the public electricity selling prices. The public electricity tariff varies with the day time period. The following table presents the current public low voltage electricity tariffs according to the time period: Price Summer Winter Tariff MAD/kWh Schedule Schedule Peak demand period 1.0400 18h-23h 17h-22h Regular demand period 0.7649 7h-18h 7h-17h Low demand period 0.5135 23h-7h 22h-7h Considering the 60% rate discount, the resulting weighted average selling price is established at 0.44 Dh/kWh. In a conservative approach the electricity revenues are evaluated on the basis of a selling price of 0,4 MAD/kWh. The program expected revenues schedule are presented in the following table for the two retained scenarios. 12 In this case the electricity revenues could be set at the actual electricity cost for the City/Commune 13 The electricity transport by ONE is allowed only for high voltage users 40 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. SCENARIOS I&II REVENUES SCHEDULE In 1000 $ SCENARIO I SCENARIO II Year CERs Electrcity Total CERs/Total 2009 2010 2011 2 748 1 345 4 093 1 673 2012 4 216 2 260 6 476 2 941 2013 5 257 2 913 8 170 3 839 2014 8 965 5 189 14 154 4 397 2015 10 852 6 353 17 205 5 455 2016 12 216 7 197 19 413 6 088 2017 13 530 8 009 21 539 6 702 2018 14 801 8 794 23 595 7 300 2019 16 037 9 555 25 593 7 886 2020 17 244 10 298 27 542 8 461 2021 18 427 11 025 29 452 9 029 2022 19 515 11 693 31 208 9 525 2023 20 565 12 355 32 921 9 994 2024 21 613 13 014 34 626 10 467 2025 22 614 13 638 36 252 10 906 2026 23 496 14 188 37 684 11 356 2027 23 046 13 926 36 972 11 816 2028 22 062 13 337 35 398 11 734 2029 21 218 12 833 34 051 11 701 2030 20 091 12 155 32 246 11 357 2031 18 469 11 175 29 644 10 526 2032 13 203 8 042 21 245 6 928 2033 8 384 5 107 13 490 3 196 2034 6 113 3 724 9 837 1 621 2035 1 701 1 036 2 737 1 467 TOTAL 366 381 219 162 585 544 186 364 13-5 Profitability Considering the expected annual expenses and revenues, the profitability of the individual CPAs has been established in terms of the project’s Internal Rates of Returns IRRs. Equally, the IRR of the CDM PoA has been evaluated on the basis of the expected cash flows for the two considered scenarios. The following tables present the expected cash flows schedule of the individual landfills for both scenarios along with the resulting IRRs. For the scenario I that includes 11 landfills with the electricity generation option the IRR varies from 13,2% for the smallest landfill (Al Hoceima) to 35% for Casablanca. The CDM program has a global IRR of 30%. For scenario II that is limited to the flaring option in the 8 most promising landfills, the project’s IRR varies between 13% for Al Hoceima to 54% for the Rabat landfill. The CDM program has a global IRR of 40% 41 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Scenario I: Expected Cash flow schedule In 1000 $ Year Agadir Casa Al Hoceima Marrakech Meknès Rabat El Jadida Tanger Akreuch Oujda Berkane Total 2009 -883 -64 -447 -1 047 -10 -1 731 -21 -12 -705 -536 -384 -5 839 2010 -29 -21 -18 -5 -828 -34 -527 -4 -19 -27 -18 -1 530 2011 -25 -3 482 25 0 -25 -3 090 -574 0 418 -872 -561 -8 186 2012 -1 910 -25 39 -1 800 -25 2 111 255 -919 373 401 123 -1 378 2013 673 -25 52 816 -1 998 1 150 303 -25 333 471 155 1 906 2014 849 -6 159 65 1 026 572 2 715 -524 -25 296 539 186 -461 2015 1 017 4 473 77 -113 736 1 722 302 -1 810 263 -470 -512 5 684 2016 1 179 2 763 86 1 287 896 3 250 344 793 228 551 163 11 541 2017 -17 6 069 97 1 472 1 049 2 222 388 981 199 613 189 13 262 2018 1 340 4 296 108 1 672 -142 3 751 434 -175 176 678 217 12 354 2019 1 445 7 530 97 470 1 210 3 977 478 1 200 120 715 225 17 466 2020 1 635 5 665 129 1 915 1 320 3 021 497 1 362 135 802 268 16 750 2021 1 780 8 688 137 2 108 1 512 4 509 564 1 524 112 861 291 22 087 2022 573 6 948 147 2 297 1 664 4 805 488 1 635 96 923 316 19 890 2023 1 914 10 104 128 2 494 467 3 753 419 489 80 985 341 21 175 2024 2 052 8 111 111 1 344 1 818 5 233 355 1 833 65 1 046 364 22 332 2025 2 197 11 264 97 2 753 1 978 5 534 300 1 978 54 1 112 312 27 577 2026 2 339 10 639 81 2 961 2 137 4 470 246 2 121 39 973 261 26 266 2027 2 476 10 427 68 1 823 2 299 5 961 200 2 263 29 851 217 26 613 2028 1 276 9 149 57 3 240 1 115 5 243 158 2 403 19 740 178 23 579 2029 2 622 7 972 47 3 464 2 486 4 593 120 1 198 11 640 144 23 297 2030 2 770 6 926 38 3 043 2 661 4 006 87 2 532 4 550 111 22 726 2031 2 426 5 954 29 2 657 2 328 3 463 54 2 666 -5 465 81 20 119 2032 2 123 5 123 0 2 318 2 034 0 0 2 810 0 0 0 14 407 2033 4 348 1 764 2 466 8 578 2034 3 646 2 155 5 801 2035 1 873 1 873 IRR 26,8% 35,1% 13,2% 27,8% 24,8% 36,8% 19,1% 27,0% 32,4% 26,2% 12,2% 30,1% 42 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Scenario II: Expected Cash flow schedule In 1000 $ Year Agadir Casa Al Hoceima Marrakech Meknès Rabat El Jadida Tanger Akreuch Oujda Berkane Total 2009 -893 -448 -1 060 -19 -1 756 -24 -23 -386 -4 608 2010 -32 -19 -9 -831 -43 -528 -8 -19 -1 487 2011 -25 25 0 -25 1 155 139 0 64 1 334 2012 380 39 434 -25 1 368 164 -919 81 1 522 2013 478 52 549 336 1 570 189 -25 97 3 245 2014 570 65 660 425 1 763 214 -25 113 3 785 2015 659 77 768 512 1 949 238 432 128 4 763 2016 745 86 874 597 2 117 259 540 140 5 357 2017 815 96 961 672 2 270 280 633 152 5 879 2018 904 108 1 074 756 2 459 306 738 165 6 511 2019 939 97 1 125 837 2 539 330 831 160 6 857 2020 1 060 129 1 279 875 2 783 328 914 191 7 560 2021 1 136 137 1 381 996 2 931 374 1 000 201 8 157 2022 1 207 147 1 478 1 077 3 088 333 1 037 213 8 579 2023 1 281 128 1 582 1 152 3 242 297 1 163 226 9 073 2024 1 348 110 1 678 1 227 3 376 262 1 233 236 9 469 2025 1 431 97 1 796 1 317 3 549 234 1 313 211 9 948 2026 1 506 81 1 905 1 401 3 693 204 1 389 185 10 364 2027 1 576 68 2 012 1 486 3 847 180 1 464 164 10 796 2028 1 652 57 2 127 1 568 3 467 157 1 538 145 10 712 2029 1 729 47 2 245 1 659 3 123 139 1 612 127 10 681 2030 1 808 38 2 023 1 751 2 812 120 1 680 111 10 343 2031 1 620 29 1 811 1 570 2 511 101 1 745 95 9 480 2032 1 465 1 639 1 419 0 1 827 6 351 2033 1 277 0 1 645 2 922 2034 1 480 1 480 2035 1 331 1 331 160 406 IRR 36,0% 13,1% 36,4% 35,1% 54,8% 35,5% 36,3% 23,4% 39,8% 43 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. 14- PROGRAM BENEFITS 14-1 Local benefits The program activity will result in the direct elimination of the LFG emissions and their associated negative impacts and public nuisances. It is worth mentioning that carbon finance has been integrated to the financing scheme of the NPMSW. Therefore the proposed CDM PoA should not be considered just as a rational and ecological LFGs management practice but as a mean and catalysis of the NPMSW projects implementation and its objectives concretization. Hence, the benefits of the proposed PoA are neither more nor less than the local environmental and health benefits of moving from uncontrolled open dumps situation to sanitary landfills sustainable practices for the management of municipal wastes in the main cities of Morocco. In this perspective, besides public health benefits, the PoA activities have direct environmental benefits on the improvement of the air, water and soils quality. Specifically, with the elimination of LFG emissions, the program activities will help: ü improve the air quality in the main cities landfills surroundings areas; ü Reduce the risks associated with fires and explosions in and around the landfill. This is particularly important as the LFG collection system will minimize the potential for LFG migration, which can infiltrate zones in the landfill’s surroundings; ü The destruction of the LFG will improve the local environment by reducing the amount of noxious air pollution arising from the landfill, resulting in a considerable reduction of nuisance caused by the odors and also health risks associated to these emissions. 14-2 Global benefits Besides reducing GHG emissions, global benefits of the PoA can be summarized as follows: ü Enable the concretization of the NPMSW objectives; ü Develop sustainable waste management practices in Morocco; ü Improve the global environment in Morocco; ü Help control the safety hazards and public health risks associated with municipal waste disposal in open uncontrolled dumps ü Provide a model for managing LFG in landfills throughout Morocco ü Reinforce Morocco capacity in municipal waste management ü Help develop municipalities and cities CDM projects through the reinforcement of the FEC capacity in CDM projects development and carbon finance expertise In addition, the PoA will reduce the electricity consumption of Morocco and help preserve the non renewable fossil fuels resources. 44 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. The electricity savings resulting from the program activities are estimated at an average of 191 GWh/year corresponding to an annual reduction of 49 600 ton oil equivalent of fossil fuels consumed by a typical thermal power plant. 14-3 Socio Economic effects In the absence of the CDM PoA, most of the land filling projects of the PNMSW would not have been implemented, been delayed or been carried out without the LFG capture and elimination option. The economical benefits of the project result from the CERs selling to compensate and enable the investment in the LFG elimination and use projects. Also with the reduction of the air pollution and odors, the prices of the nearby real state should increase resulting in a positive economic effect on the owners. Reducing the noxious odors can also help improve the status of the land in the vicinity of the landfill and help create new economic development projects. 15- PROGRAM IDEA NOTE The results of the technical, environmental and financial assessment of the CDM program activities for the MSW sector have been summarized in a Program Idea Note developed according to the WB CDM PoA standard template. The PIN of the CDM Landfills’ gas capture, flaring and use program in Morocco is provided in Annex C. 16- NEXT STEPS The CDM PoA documents preparation and registration have been planned for a period of 18 months starting January 2009. Given the required tasks, the CDM program development schedule is very tight. It requires a pro-active action plan to register the program in the fixed time limit, to raise the landfills stakeholders’ awareness on the benefits of the CDM PoA and to help embark the targeted landfills as CPAs. An Action Plan detailing the program development tasks and the PoA implementation time schedule should be prepared. The following urgent tasks should be planned for the near term: Ø Organization of a communication and marketing campaign for the program activities aimed at the targeted landfills concerned stakeholders: City councils/Communes and private operators; Ø Lobbying efforts should be planned for the CPAs activities especially for Casablanca and Rabat landfills. In this regard meetings should be organized 45 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. with the two cities councils and with high decision makers at the Ministry of Interior, Ministry of Energy and ONE. In the current electricity shortage context, the program expected installed capacity of 54 MW should help ensure the needed institutional support for the program activity; Ø Development of the partnerships agreement working documents detailing the benefits and responsibilities of each of the concerned parties: CPF/WB; FEC; City/Commune; private operator, etc. Ø Definition of a WB CDM technical assistance program for FEC through the CF Assist facility. 46 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Annexes 47 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Annex A Terms of reference 48 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. MNA Region - Carbon Finance Assist Program Support to the development of CDM activities in Morocco Terms of Reference for a CDM Consultant I. INTRODUCTION 1. The Kyoto Protocol (KP) to the UN Framework Convention on Climate Change (UNFCCC) was agreed upon in December 1997. The Protocol commits industrialized (“Annex I�) countries to reduce their carbon emissions by an average of 5.2 percent below 1990 levels in the first commitment period (2008-2012). To meet these commitments in the most cost-effective manner, the Protocol’s Article 12 established the enabling industrialized countries to receive credits for financing emissions reduction (ER) projects in developing (host) countries. While host countries have no commitments or emission reduction targets under the Protocol, they can benefit from activities under the Clean Development Mechanism (CDM), so that they could maximize their sustainable development gains along with global environmental benefits. 2. CF-Assist is a capacity building and technical assistance program established by the World Bank in fiscal year 2005 to enable the full engagement of developing countries and economies in transition in the carbon market so that they could maximize their sustainable development gains along with global environmental benefits. 3. In this context, the World Bank Institute (WBI), responsible of managing this program, has allocated resources and a budget to be used for CF-Assist activities in Morocco. Following discussions between the World Bank and the Government of Morocco, the element of Technical Assistance / Capacity Building program were defined in order to build the national capacities on carbon finance and CDM, to enable the country to participate in the carbon market and benefit from CDM. 4. In 2007 the CDM Executive Board produced detailed rules and guidance for programmatic CDM, which is opening the way for project developers to develop and submit projects for registration many projects under a single ‘program umbrella’ instead of many project activities. The Program of Activities (PoA), based on a programmatic approach to the CDM is a relevant tool which could generate additional financial resources for the implementation of programs under national policies such as Energy and Solid Waste Management (SWM). 5. The Moroccan Government has recently undertaken vigorous action toward the development and the reform of the solid waste sector, including the preparation of an ambitious National Program on Municipal Solid Waste (NPMSW) that covers a wide range of institutional, financial, environmental and social upgrading actions over the next fifteen years 2007-2021 in order to achieve an acceptable coverage of sustainable solid waste services in all urban areas. 6. Morocco has ratified the Kyoto Protocol in 2002 as a non-Annex B party and is eligible to participate in CDM. Waste disposed in landfills generates gases typically composed of 50% methane that can be captured and flared or used to produce electricity. At present landfill gas capture in place in Morocco which results in global environmental impact linked to the reduction in the emission of greenhouse gases. 7. As part of the NPMSW, Morocco intends to tap the additional source of finance provided by the CDM to promote improvements of SWM practices in the country. The Fonds d’Equipement Communal (FEC), a state-owned bank specialized in lending and counseling to municipalities has been designated as the institution in charge of designing and developing a nationwide CDM program of activities in the solid waste management sector. FEC will act as the coordinating entity of the CDM PoA and be an interface between the Moroccan Municipalities and other stakeholders for the preparation and the implementation of the program. 49 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. 8. The World Bank is hereby seeking consulting services to support the carbon finance activities of the Fonds de l’Equipement Communal (FEC) to develop a programmatic CDM project within the framework of the NPMSW. To this end, the present Terms References detail the scope of work of the required consulting services for this assignment. II. OBJECTIVES: 9. The objective of the proposed assignment will be to assist the Fonds de l’Equipment Communal in developing/preparing a Program of Activities (PoA), based on a programmatic approach for CDM project activities (CPA) in solid waste sector in Morocco. More specifically, the proposed assignment will include: (i) the assessment and validation of the feasibility of a CDM programmatic project for the solid waste sector; and (ii) the development of a Program Idea Note (PIN) and the needed Financial Analysis for the nationwide SWM PoA. 10. The PIN is the first step in the design of the PoA leading to the preparation of a CDM PoA-DD and a CDM CPA-DD14 which will be submitted for validation and registration. 11. When preparing the PIN the consultant should refer to the guidance provided by the CDM Executive Board (EB) at its thirty second meeting15 for PoA and activities under PoA (CPAs) and any other further relevant EB guidance on PoAs. 12. This exercise should facilitate Capacity Building for the Moroccan counterparts regarding CDM PoAs, CPAs, PINs, and the scope of CDM in general. III. TASKS: 13. Consistent with the above objectives, the main tasks of the consultant work will include, but not limited to: (i) Prepare and carry out a country mission to Morocco in October 2008 in order to meet with the FEC and if necessary other concerned Moroccan stakeholders, the Ministry of Interior (Direction Générale des Collectivités Locales), the Ministry of Environment, municipalities and landfill operators, etc.; a. To collect all available information regarding the scope and the objectives of programme; the cost estimate and financing scheme, the institutional arrangements and implementing entities etc. in order to validate the feasibility of the proposed CDM Program of Activities. b. To collect relevant information for the preparation of the PIN and the Financial Analysis. (ii) Liaise with other consultants (legal, technical, environmental, etc.) recruited by FEC for the preparation of this SWM PoA and take into account, whenever relevant, the findings of their respective due diligence. (iii) Determine a likely scenario for the portfolio of projects (CPAs) that will be included in this SWM PoA and an estimate of the total amount of Emission Reductions (ERs) generated by the PoA. The landfill projects to be reviewed in priority include major projects such as Oujda, Rabat, Agadir, Fes, Marakech, Casablanca, Al Jadida, Casablanca, 14 The latest version of the templates for CDM-PoA-DD and CDM-CPA-DD are available on the UNFCCC CDM website in the reference/documents section. 15 Annex 38 &Annex 39 of EB 32 Report 50 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Meknes, Tetouan and Tangiers and smaller sites such as Al Hoceima, Essaouira and Berkane. Based on information collected on individual projects and their respective construction and operation schedule the consultant will prepare an annual breakdown of such ERs over a 10 years period (2009-2018). (iv) Provide a preliminary analysis of baseline and additionality. (v) Based on the PNDM objectives and the review of the portfolio of potential CPAs, define an outline for a generic CPA (identify the main common characteristics of CPAs, propose eligibility criteria for CPAs to be included in this SWM PoA). (vi) Review the project proposed by the municipality of Oujda taking into account the recommendation of the 41st EB meeting concerning eligibility of projects for which activity has started. Considering the current stage of the project and action already taken by the municipality (landfill operator) for the development of a CDM project, give an opinion and recommendations regarding the possibility to include this particular project in the contemplated SWM PoA. (vii) From the review of landfill projects likely to be included in the proposed SWM PoA, identify at least one landfill project which could be submitted as the CPA specific when preparing the PDD for the registration of this SWM PoA. The newly constructed Oum Azza landfill in Rabat will be reviewed in priority as part of this selection process. (viii) Based on information collected from municipalities (and landfill operators) and consistent with the agreed scenario for the portfolio of projects, prepare a financial analysis required for this PoA using the format prescribed by the World Bank (ref template attached). (ix) Prepare a brief summary of the major environmental and socio-economic benefits (local and global) expected from the PoA. (x) Complete all PIN sections as appropriate. (xi) The consultants will also be responsible for Capacity Development workshop, for the purposes of dissemination and learning, providing an overview of the CDM market, across sectors, to explore CDM potential across in Morocco. The workshop will also cover the findings and outcomes of this consultancy. IV. WORK ORGANISATION & REPORTING 14. The Consultant will report directly to the MNA-Regional Carbon Finance Team at the World Bank, Mr. Jaafar Friaa. He/she will work closely with the FEC and others local/national concerned institutions in Morocco as required. 15. Under the proposed assignment, the consultant will prepare and submit the following documents: - Draft version of the PINs no later than 4 weeks after the signature of his/her contract. - Final version of the PINs, two week after receiving comments from the FEC and the Bank. - Two copies of completion report summarizing the key results and findings of the provided ToRs as well as recommendations for the preparation of further steps towards identification of CDM project. 16. All documents should be produced in English and submitted electronically (word and excel documents) and in hard copy. 51 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. V. REQUIRED QUALIFICATIONS 17. The required main qualifications of the individual consultant are: • Formal educational background in a directly related technical field at the engineer or masters level • At least 5 years work experience in CDM project development particularly in energy and solid waste sectors, excellent knowledge of CDM program of activities. • Fluency in English required with excellent written and oral communication skills. Fluency in Arabic and French would be an asset. VI LEVEL OF EFFORT 18. The proposed assignment is expected to require approximately 30 days of full-time work for the completion of activities including a mission in Morocco of at least 10 business days. 19. The proposed assignment is expected to be carried between October 30, 2008 and December 30, 2008. 52 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Annex B Landfills survey template 53 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. MONTAGE MDP PROGRAMMATIQUE POUR LES DECHARGES COLLECTE DES INFORMATIONS A- INFORMATIONS GENERALES Nom de la Commune /Ville Nom de la décharge Tonnage journalier t/j Taux de croissance annuel préconisé en % Nombre d’habitants desservis Composition type moyenne des déchets : Matières organiques…….%; Papier-carton……….%; Plastique……..%; Métal………%; Verre…….%; Chiffons/tissus ……..%; Divers………% Densité ………………. Humidité………% Fermée £ Projet de nouvelle décharge contrôlée £ Type de décharge Décharge en activité : Non contrôlée £ Contrôlée £ Gestion Communale £ Gestion déléguée £ Gestion de la décharge Nom de la société délégataire :……………………… Période et date de la fin du contrat…………………… Date d’ouverture de la décharge :……………………………………….. Date de fermeture prévue :………………………………………………… Superficie ……………………………………….hectares Nom et fonction de la personne contact (Président, ingénieur communal, responsable société délégataire) Téléphone : Email : Fax : 54 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. B- PROJET DE RÉHABILITATION Prière de remplir cette partie s’il s’agit d’un projet de réhabilitation de décharge Date de démarrage du projet de réhabilitation : Calendrier prévisionnel de réalisation du projet de réhabilitation: Date de démarrage du projet :………………………………… Date prévue pour la fin des travaux :…………………………. Budget total requis :……………….MDh Montant mobilisé :………………..MDh Source de financement………….………… Autres financements …………… MDh Source de financement……………………. MDh Source de financement…………………….. Fermeture……………£ Gestion après réhabilitation Gestion communale…£ Gestion déléguée……£ C- PROJET D’AMÉNAGEMENT D’UNE NOUVELLE DÉCHARGE CONTROLEE Prière de remplir cette partie s’il s’agit d’un projet d’aménagement d’une nouvelle décharge contrôlée Calendrier prévisionnel du projet d’aménagement de la nouvelle décharge : Date de démarrage des travaux :………………………………… Date prévue pour la fin des travaux :…………………………. Investissement total requis :…………MDh Montant mobilisé :…………………….MDh Source de financement………….………… Autres financements …………………MDh Source de financement……………………. MDh Source de financement…………………….. Gestion de la nouvelle décharge Gestion communale…£ Gestion déléguée……£ 55 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. D- PROJET DE CAPTAGE ET VALORISATION DU BIOGAZ – MDP Prière de remplir cette partie si des démarches pour le montage MDP du projet ont été entreprises Type de projet MDP envisagé : Captage du biogaz et torchage : £ Captage du biogaz et génération de l’électricité : £ Contacts établis pour le montage MDP (AND-FEC- Sociétés privées, etc.) …………………………………………………………………………………………………. ………………………………………………………………………………………………..…………………… Conventions signées………………………………………………………………………… …………………………………………………………………………………………………………………… Investissements prévus pour le montage MDP :…………………………………………. ………………………………………………………………………………………………… Sources de financement préconisées :…………………………………………………... …………………………………………………………………………………………………. Dans le cas d’une gestion déléguée, partage prévu des crédits carbone : ………………………………………………………………………………………………… …………………………………………………………………………………………………. Partage prévues des coûts d’investissement : Part à la charge de la Commune/Ville :…………………………. Part à la charge du délégataire :…………………………………… Documents MDP préparés : NIP £ PDD £ Etude de faisabilité technique du projet £ Évaluation du gisement de biogaz Remarques/Commentaires…………………………………………………………………………………… ……………………………………………………….................................................................................. …………………………………………………………………………………………………………………… 56 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note Annex C CDM Program Idea Note for the PNMSW Page 57 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note PROGRAM IDEA NOTE Name of PROGRAM: Landfills’ gas capture, flaring and use program in Morocco SECTOR Scope: Sector 13 Waste handling and disposal Date submitted: March 2009 Description of size and quality expected of a Program Note Basically a PN will consist of approximately 10-12 pages providing indicative information on: • the type of program – policy, sector and technology • location • the suggested crediting life time • No. and types of project activities expected to participate • The Methodology to be used, if existing • the financial structuring (indicating which parties are expected to provide the program and individual project financing) • the project’s other socio-economic or environmental effects/benefits While every effort should be made to provide as complete and extensive information as possible, it is recognised that full information on every item listed in the template will not be available at all times for the entire program (POA) and is not expected for each project (CPA). Page 58 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note A. PROGRAM and PROJECT DESCRIPTION, TYPE, LOCATION AND SCHEDULE OBJECTIVE OF THE The main objective of the program is to avoid methane emissions PROGRAM from Municipal waste landfills in Morocco by promoting landfill gas Describe in not more than 5 (LFG) capture and flaring or utilization projects. lines The proposed program will contribute to reduce GHG emissions, (Policy, Technology, other mitigate the nuisances associated with the LFG emissions and goal) improve the air quality. It will help streamline sound environmental practices in the Solid Waste Management sector. DESCRIPTION OF The CDM program will be implemented as part of an ambitious PROGRAM reform of the solid waste sector launched by the Moroccan Government and supported by the World Bank’s with a About ½ page Development Policy Loan (DPL). Two significant steps have been taken toward the reform of Solid Waste Management: the adoption of the SWM Law 28-00 in December 2006 and the approval of the National Solid Waste Program (Programme National de Gestion des Dechets Menagers – PNDM) The new SWM law requires that municipalities improve their sanitary services and their waste disposal practices, rehabilitate/close open dump sites and promote the construction of sanitary landfills but does not enforce the LFG elimination or reuse. The National Solid Waste Program (NSWP) covers a wide range of institutional, financial, environmental and social upgrading actions planned for the next fifteen years (2008-2022) in three phases. It sets out, among other objectives, the introduction of sanitary landfills (100% of urban areas equipped by 2022) and the closure and rehabilitation of 300 existing open dumps. Along with the reform, legal frame work for the private sector participation in streets sweeping, municipal waste collection and land filling has been set up. As the result, private sector participation for the provision of solid waste services to municipalities has increased and concession contracts have been awarded to management companies. In this context, faced with an increased financial burden, municipalities are not keen to invest in LFG elimination or reuse projects. The CDM program will help generate additional revenues for municipalities and/or private landfill operators to promote investment in such projects. Page 59 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note Fonds d’Equipement Communal (FEC), the Municipal Bank in Morocco, has been mandated by the Government to assist municipalities in the development of CDM projects and in the sale of Emission Reduction. FEC will be the Coordinating/Managing Entity for the Project Activities under the Program of Activities. Each of the LFG project is considered as a CDM project activity. The LFG CDM projects will be implemented by the individual municipalities. Municipalities would either construct and operate the project themselves or contract it out to the private sector. FEC will provide assistance for the preparation of individual CDM projects and sell the CERs to the Carbon Partnership Facility (CPF). A subsidiary agreement will be signed between the municipalities and/or the private sector operator and FEC. This agreement will include provisions for sharing of financial benefits accruing from the sale of emission reductions and sharing of responsibilities in the implementation of the CDM Program of activities and individual CDM projects. The CDM program will initially focus on municipalities and sites included in the first phase of the NSWP (2008-2012). PROGRAM FINANCE The construction of new landfills and rehabilitation of old ones will be financed by the resources mobilized for the implementation of (Description of financial the National Solid Waste Program (NSWP) as detailed in the table mechanism to be used by below. CDM revenues have been taken into account as a source the program – of finance for the Program. The total budget of the NSWP has loan/subsidy/grant, if any. been estimated at 4,25 billions US $16 for the period 2008-2022 Also describe the impact of including US $ 115 million from carbon finance. program finance on CPA implementation, if any.) Source Budget Contribution million MAD million US $ % Municipalities/Cities 26 891 3 091 72,8% Local waste fee 4 295 494 11,6% CDM 1 000 115 2,7% State 3 250 374 8,8% 1 500 Grants- international cooperation programs 172 4,1% Total 36 936 4 246 100% 16 Exchange rate 1 $ = 8,7 MAD Page 60 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note The Moroccan Government has allocated 172 million US $ to the implementation of the first phase (2008-2012) of the NSWP. More than half of this contribution has been allocated to old landfills upgrading/rehabilitation and to new landfill projects. COORDINATING ENTITY (Public/Private, state legal and financial status and program implementation, monitoring and management capacity) Name of the Entity Fonds d’Equipement Communal Role of the Program Entity Coordinating / Managing Entity in charge of : 1. CDM PoA preparation 2. CPA identification and preparation. FEC will support CPA implementer (municipalities / private landfill operators).for the development of the individual CDM projects 3. Managing the PoA in coordination with the CPA implementers, DOEs, the Moroccan DNA, the IBRD 4. In its capacity of “Seller Participant� to the Carbon Partnership Facility, selling CERs and redistributing the proceeds of the sale to CPA implementers Organizational category Government agency Contact person Mr. Hassan Rahmani, Directeur du Développement et des Partenariats Address Espace Oudayas, Angle Avenue Annakhil et Avenue Ben Barka, BP. 2175 – Hay Ryad, Rabat – Maroc Telephone/Fax Telephone: (212) 37 56 90.10 ; Fax: (212) 37 56 90.12 E-mail and web address, if rahmani@fec.ma any Main activities The Fonds d'Equipment Communal (FEC) is a state-owned Describe in not more than 5 Moroccan Bank created in 1959 and specialized in the financing of lines local investment projects of municipalities and local public institutions. FEC’s mission is to support the implementation of national policies for local development with the provision of loans and technical assistance to municipalities. Page 61 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note FEC finances local investments projects such as: Ø Infrastructure and utility services (water, electricity, municipal waste and waste water, roads, etc.) Ø Equipment and urban development; Ø Transport equipment; Ø Socio-equipment facilities: sporting facilities, tourist and recreational areas etc. Summary of the financials In 2008, FEC financed 144 local projects for an amount of 2,86 Summarize the financials billions MAD (329 MUS$) with a substantial proportion allocated to (total assets, revenues, the urban development sector. profit, etc.) in not more than 5 lines FEC financials as per 2007, 2008 : Total assets [2007] : 6,9 billions MAD (800 MUS$) ; New loans [2008] : 2.86 billion MAD (329 MUS$) ; Outstanding loans [2008] : 7,78 billions MAD (895 MUS$) ; Disbursement [2008] : 2,05 billion MAD (236 MUS$) ; Net earnings [2007] : 239 million MAD (27 MUS$). Reference: Activity report and information collected from FEC http://www.fec.ma/Rapports/RapportFEC2007FR.pdf Summary of the relevant Over the past 50 years FEC has gained an extensive experience experience of the Program in local projects financing and established close cooperation and Coordinator partnerships with Moroccan municipalities. Capitalizing on this Describe in not more than 5 unique experience, FEC is well positioned to understand their lines concerns and assist them in the implementation of development projects such as the proposed CDM program of activities. FEC is already supporting the SW sector reform and the implementation of the NSWP. In 2008 FEC mobilized and financed four consultancy firms in order to reinforce capacity of approximately 30 municipalities in Solid Waste Management and assist them in the development of projects included in the NSWP. Consistent with the NSWP objectives and the promotion of CDM LFG projects at a national level, FEC has undertaken since 2007 a series of actions for the preparation of the CDM program. Such initiatives include : 1. Approaching selected municipalities to sensitize them to the opportunities offered by LFG CDM projects and better understand the support needed for the development of CDM projects. Page 62 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note 2. Recruiting experts (the Canadian firm Biothermica) to assess the biogas potential of 16 landfills and organizing a workshop to share the findings of this study with Moroccan municipalities, 3. Recruiting experts to estimate the additional investment costs involved for the development and implementation of CDM LFG projects, 4. In addition, at the end of 2008, FEC launched a consultation for the recruitment of legal counsels to assist FEC (i) analyze the existing legal arrangements between municipalities and private sector landfill operators and (ii) design subsidiary agreements FEC will need to enter into with municipalities and/or private sector landfill operators in connection with its participation to the CPF as a Seller Participant. DESCRIPTION OF The capture and valorization of LFG projects involved a basic type TECHNOLOGY or technology. It is commonly used and commercially available. LFG MEASURES TO BE recovery efficiencies are typically around 50% and can reach 75% EMPLOYED for a well designed-system. A typical landfill gas collection and flaring system consists of the following components: § Vertical wells network ; § A collection piping system ; § Condensate extraction and storage systems located at low network points ; § A blower to create the required vacuum in the collection network to extract the LFG ; § A flaring station for the LFG destruction and optionally; § A LFG engine for electricity generation. TYPE OF PROGRAM Sectoral Scope CDM Sectoral scopes 13 Waste handling and disposal and 01 (mention what is applicable) energy industries (renewable source) Greenhouse gases targeted The targeted main GHG gas is methane. But for valorisation CO2/CH4/N2O/HFCs/PFCs/ activities, additional CO2 emissions reduction will result from the SF6 LFG based electricity generation: replacement of the fossil fuel (mention what is applicable) based electricity resulting from the project activity will reduce the emissions of GHG (mainly CO2) associated with the power generation in Morocco. Abatement/CO2 CH4 elimination and electricity generation from a renewable sequestration source. (mention what is applicable LENGTH OF PROGRAM 28 years: 2011-2038. (Up to 28 years) Page 63 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note LOCATION OF THE PROGRAM Country / Region The program targets existing and new landfills in Morocco. (one or more) Brief description of the The program activities will be carried out throughout Morocco. geographical boundary of the program (No more than 3-5 lines) RELATIONSHIP In 2007 FEC has been mandated by the Government to assist BETWEEN PROGRAM & municipalities in the development of CDM projects and in the sale PROJECT (if any existing of Emission Reduction. A copy of the official letter from the between coordinating entity Moroccan Ministry of Interior is attached to the PIN (ref Annex A). and CPA owner; if not, what is expected in the future) Pursuant to (i) its mission in favour of municipalities and (ii) the mandate given by the Government, FEC has undertaken a series of actions to promote the development of CDM projects and start the preparation of the contemplated CDM program of activities. Detail of such actions is given in the PIN section “Summary of the Program Coordinator relevant experience�. As mentioned in the “Description of the Program� section of the PIN, subsidiary agreements will be signed between the Coordinating Entity, FEC and CPA owners (municipalities and, as the case may be private landfill operators) for the implementation of the CDM program. ELIGIBILITY CRITERIA The PoA registration requires the establishment of eligibility criteria for the inclusion of CPAs in the PoA. (Which projects will be allowed to join the program LFG flaring and utilization projects developed in new or upgrading and how will they be landfills projects implemented as part of the NSWP. identified?) Availability of an Environmental Impact Assessment and compliance with the World Bank Safeguards policies. Signature of a Letter of Intent with FEC for the development of the CDM project and the sale of CERs to the CPF. The CDM eligibility criteria of the Consolidated Approved Methodology ACM 0001 will be used as CPA criteria selection of the landfills to be considered under the proposed CDM Program. Page 64 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note EXPECTED PROGRAM SCHEDULE PROGRAM START DATE The program is in the preparation stage carried out with the Year in which the Program support of the World Bank. will become operational Expected program start date: June 2010 (registration date for the PoA). PROGRAM The CDM program will initially focus on projects developed by IMPLEMENTATION municipalities included in the first phase of the NSWP (2008- SCHEDULE 2012). Based on the implementation schedule communicated by the Moroccan Ministry of Interior (Direction Générale des Collectivités Locales) and information collected directly by FEC from municipalities by means of a questionnaire (see format attached in Annex B), the Program will first include the eleven potential CDM projects listed in the table below Implementation schedule of the landfill projects17 Opening Expected Crediting period LANDFILL Closing Year Start year End year year Akreuch 1985 2006 2011 2031 Agadir 2009 2034 2012 2032 Berkane 2004 2024 2011 2031 Casablanca 2011 2026 2014 2034 El Hoceima 2008 2023 2011 2031 El Jadida 2006 2021 2011 2031 Marrakech 2009 2029 2012 2032 Meknès 2010 2030 2013 2033 Oujda 2005 2025 2011 2031 Rabat 2007 2027 2011 2031 Tanger 2012 2032 2015 2035 Emission reduction calculations for the CDM program take into account the above mentioned implementation schedule. As participation is voluntary, two scenarios have been adopted: an optimistic scenario including all the above eleven targeted landfills and a pessimistic scenario limited to the 8 following projects: Agadir, Berkane, El Hoceima, El Jadida, Marrakech, Meknès, Rabat and Tangiers18. Estimate of time required Time required for PoA preparation and DNA approval : 6 months before becoming CPF partnerships set up with the FEC and PoA validation and operational after approval of registration: 12 months the PIN Expected first year of 2011 CER/ERU/VERs delivery 17 With the exception of Akreuch, which is a landfill rehabilitation all the other projects are newly constructed landfills. 18 SEGEDEMA, one of the main landfill operators in Morocco has expressed interest to work with FEC for the development of the CDM projects related to the sites they operate. Such sites include two major landfills, Rabat and Marrakech. Page 65 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note Current status or phase of The CDM program will be implemented as part of the NSWP the PROGRAM DESIGN approved for a 15 years period: 2008-2022 and will focus on (Pre-selection Municipalities included in the first phase of the NSWP. The table phase/opportunity study given in the “Program implementation schedule� section finished/pre-feasibility study indicating the date of opening of the new landfills takes into finished/feasibility study account the time necessary for the design and development of finished/negotiations each project. It is based on the annual planning of projects to be phase/contracting phase implemented under the NSWP. A more detailed review of each etc.- project design status will be carried out at the time of CPA-DD mention what is applicable preparation. and indicate the documentation) Following is a tentative schedule of the program preparation: • PIN review and signature of FEC participation to the CPF as a Seller Participant : February /March 2009 ; • Mobilization of TA under the CADF for Program preparation : March 2009; • FEC contacts with Moroccan municipalities to present and promote the proposed CDM Program of Activities: from February 2009 onward; • PDD preparation for the PoA, a CPA generic and a CPA specific: starting March / April 2009; • Preparation of the legal documentation, negotiations and contracting between the different stakeholders ( FEC and WB – FEC and municipalities and/or FEC and private landfill operators) : from February 2009 onward. Current status of acceptance of the Host The DNA has been informed of the CDM program preparation Country (or countries) and FEC intends to the present PIN to the DNA. Letter of No Objection/Endorsement is In conformity with EB41 on prior CDM consideration for projects available; Letter of No starting after August 2nd, 2008, the DNA and/or the EB will be Objection/Endorsement is officially notified after the PIN validation by the WB and FEC under discussion or available; Letter of Approval is under discussion or available (mention what is applicable) The position of the Host Has the Host Country ratified/acceded to the Kyoto Protocol? Country (or countries) with Morocco has ratified the KP on January 25, 2002. It entered into regard to the Kyoto Protocol force on February 16th 2005. Has the Host Country established a CDM Designated National Authority / JI Designated Focal Point? Morocco has established a DNA by ministerial decree on 18th September 2002 Page 66 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note B. METHODOLOGY AND ADDITIONALITY Methodology One Methodology for One Program Please choose from the (If the program is expected to require more than one methodology, following options: please provide details of methodologies and the combination logic) For CDM PROGRAMS: (i) Covered by an existing The Proposed CDM PoA will use the already approved Approved CDM consolidated methodology: ACM0001 Methodology or Approved CDM Small-Scale Methodology (ii) Needs a new methodology (iii) Needs modification of existing Approved CDM Methodology This methodology is specifically suited for the program planned activities that aim at the capture and flaring of the LFG or its use as a fuel for electricity generation. The methodology covers both the program’s flaring and electricity generation activities. In this regard, the methodology specifies that it is applicable to landfill gas capture project activities, where the baseline scenario is the partial or total atmospheric release of the gas and the project activities include situations such as: (a) The captured gas is flared; and/or (b) The captured gas is used to produce energy (e.g. electricity/thermal energy); (c)The captured gas is used to supply consumers through natural gas distribution network. The CDM monitoring requirements are defined in section III of the methodology. The monitoring methodology is based on direct measurement of the amount of landfill gas captured and destroyed at the flare and at the electricity generating station. The monitoring plan provides for continuous measurement of the quantity and quality of LFG flared. The main variables that need to be determined are the quantity of methane actually captured, quantity of methane flared, the quantity of methane used to generate electricity. Page 67 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note ESTIMATE OF The following assumptions have been taken into account for the GREENHOUSE GASES calculation of Emission Reductions: ABATED/ CO2 SEQUESTERED The landfills selected in scenario I (eleven landfills: Akreuch, Agadir, BY ONE TYPICAL CPA Berkane, Casablanca, El Hoceima, El Jadida, Marrakech, Meknès, In metric tons of CO2- Oujda, Rabat and Tangiers and II (8 landfills : Agadir, Berkane, El equivalent, please attach Hoceima, El Jadida, Marrakech, Meknès, Rabat and Tangiers) calculations represent 2,9 and 1,5 million tons of waste per year respectively. An average annual growth rate of 3,3% has been assumed. The table appearing in Annex D details the assumptions of waste stream for each landfill. The CER estimates have been done for each landfill for a 21 year crediting period taking into account the opening/closing year, waste stream, growth rate, waste composition, capture efficiency, methane fraction in the biogas19, etc…The computations are based on the IPCC 2006 guidelines and procedures of the latest version of the approved methodology ACM0001. The electricity option for each landfill has also been assessed and included in the CER estimates for scenario I. No electricity generation was assumed in Scenario II. The IPCC model parameter L0 (theoretical methane generation from waste) has been established in the range of 62-74 m3/t MSW (weighted average of 69 m3/t MSW) for the landfills considered under scenario I and II. The grid emission factor has been calculated according to the UNFCCC ‘Tool to calculate the emission factor for an electricity system’, using the ONE (Office National d’Electricité) power stations consumption and production of the year 2005, 2006 and 2007. The resulting grid emission factor (CEF) is 0,7408 tCO2 per MWh. 19 Informations on landfill characteristics have been collected by FEC by means of a questionnaire (re: format attached in Annex ). Page 68 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note Emission Reductions Year Scenario I Scenario II Year 1 2011 196 286 119 498 Year 2 2012 301 123 210 081 Year 3 2013 375 490 274 201 Year 4 2014 640 343 314 081 Year 5 2015 775 127 389 613 Year 6 2016 872 552 434 862 Year 7 2017 966 409 478 731 st Total 1 period 4 127 330 2 221 066 Year 8 2018 1 057 231 521 458 Year 9 2019 1 145 510 563 264 Year 10 2020 1 231 698 604 352 Year 11 2021 1 316 209 644 911 Year 12 2022 1 393 922 680 365 Year 13 2023 1 468 954 713 843 Year 14 2024 1 543 780 747 647 nd Total 2 period 9 157 303 4 475 839 Year 15 2025 1 615 293 779 031 Year 16 2026 1 678 276 811 119 Year 17 2027 1 646 148 843 981 Year 18 2028 1 575 825 838 133 Year 19 2029 1 515 595 835 775 Year 20 2030 1 435 083 811 202 Year 21 2031 1 319 226 751 869 rd Total 3 period 10 785 447 5 671 110 Year 22 2032 943 043 494 850 Year 23 2033 598 837 228 258 Year 24 2034 436 668 115 807 Year 25 2035 121 477 104 786 th Total 4 period 2 100 026 943 701 Total t CO2 26 170 106 13 311 717 Average t CO2/year 1 246 196 633 891 Page 69 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note Expected CERs generation during the CPF period (2011-2020) In ton eq. CO2 Year Scenario I Scenario II 2011 196 286 119 498 2012 301 123 210 081 2013 375 490 274 201 2014 640 343 314 081 2015 775 127 389 613 2016 872 552 434 862 2017 966 409 478 731 2018 1 057 231 521 458 2019 1 145 510 563 264 2020 1 231 698 604 352 Total t CO2 7 561 768 3 910 139 Average t CO2/year 756 177 391 014 Up to 2012 Total t CO2 497 409 329 579 Tables and Graphs summarizing the CERs and electrcity generation schedules are presented in annex C BASELINE SCENARIO CDM/JI PROGRAMS must In the absence of the program activity, the LFG of the targeted result in GHG emissions Moroccan landfills will continue to be emitted into the atmosphere being lower than “business- contributing to global warming. as-usual� in the Host Country. At the PIN stage The program activity aims at the elimination of the methane questions to be answered emissions associated with the municipal waste land filling through are at least: flaring or utilization as fuel for electricity generation. • Which emissions are being reduced by the proposed CDM/JI program? • What would the future look like without the proposed CDM/JI program? About ½ - 1 page Page 70 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note ADDITIONALITY The Program additionality can be justified by the following arguments: Please explain which additionality arguments i. there is no regulation or incentive scheme in place covering apply to the program (This the LFG mandatory management ; should be reflected directly j. there is no incentives for municipalities to invest into flaring in program design): stations ; k. The baseline ( absence of LFG elimination practices) is the (i). Would these emission common practices; reductions occur without l. Most of the sanitary landfills projects with LFG elimination this CDM program or the activities have considered the CDM ; policy/technology that it m. The program activities are carried out in the framework of the supports? National Program for Municipal Solid Waste (NPMSW). (ii) The policy, regulation or Carbon Finance has been integrated into the NPMSW incentive scheme covered financing scheme ; by this program was either n. The Private operators of the sanitary landfills are not keen to not existing earlier or not operate additional flaring stations and electricity generation implemented effectively units without the carbon finance benefits; (require proof for latter) o. Technology barrier: most of the landfills operators don’t have (iii) the program provides the experience and technological know how for the electricity financing/grant support, generation units operations; without which projects p. Risk with electricity commercialization: the framework of would not be implemented electricity private generation has been approved but the (iv) country risk, new electricity transport through the grid is not yet permitted; technology for country, q. The Office National d’Electricité (ONE) tariffs for the electricity other barriers purchase are still relatively low: 60% of electricity public tariffs (v) other applied by ONE. SECTOR BACKGROUND Morocco has experienced in the last two decades a strong growth of Please describe the laws, the urban population and a proliferation of uncontrolled city suburbs regulations, policies and with incidentally a sharp increase in demand for municipal services: strategies of the Host solid waste and waste water sanitation services, public health, Country (or multiple education, roads etc. countries) that are of central relevance to the proposed By law, the solid waste management and related sanitary services program, as well as any are the responsibility of municipalities. The urban population growth other major trends in the combined with insufficiencies of local financial resources and human relevant sector. capacities and the lack of an adequate legal and regulatory framework for integrated waste management has resulted in poor solid waste sanitation services. Till recently, most of municipal solid waste if collected was deposited in open uncontrolled dumps. The World Bank has estimated the cost of the environmental damages for the year 2000 at 13 billions MAD representing 3.7% of the Morocco’s annual GDP20. 20 Evaluation du coût de la dégradation de l’environnement, 30 juin 2003, Rapport N° 25992-MOR, World Bank. Page 71 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note The cost of damages on public health and natural resources due to solid waste associated pollution has been evaluated for the same year at 1.725 billion Dirham21 or 0.5% of the national GDP. Main sector indicators : MSW Indicator Unit Urban Rural Total Background Information Population million 17,41 13,44 30,85 million 5,21 1,47 6,68 Municipal Solid t/year Waste (MSW) Kg/capita 0,82 0,30 0,59 /day Annual MSW generation growth % 4% 1% 3,3% rate Performance ratios MSW Collection % 95% 0% 74% rate MSW recycled % 6,5% 0% 5% MSW Sanitary % 62% 0% 50% landfills Open dumps % 38% 100% 50% In this context, public authorities have adopted an ambitious reform for the upgrading of the solid waste management. The “Program Description “section of the PIN provides details of the relevant law and measures adopted as part of the reform. C. PROGRAM FINANCE TOTAL PROGRAM COST ESTIMATE In 1000 $ Development costs Management costs Cost Category Scenario I Scenario II Program Costs CDM Development costs 647 512 Other costs (please specify) Flare systems 11 863 6 960 Total project costs Power stations 65 020 Total 77 530 7 472 21 1$ = 8,71 MAD, November 28th, 2008 rate Page 72 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note SOURCES OF FINANCE TO BE SOUGHT OR ALREADY IDENTIFIED (will be detailed for each CPA) Equity Name of the organizations, status of financing agreements and finance (in US$ million) Debt – Long-term Name of the organizations, status of financing agreements and finance (in US$ million) Debt – Short term Name of the organizations, status of financing agreements and finance (in US$ million) Carbon finance advance payments22 sought from the World Bank carbon funds. (US$ million and a brief clarification, not more than 5 lines) SOURCES OF CARBON FINANCE Name of carbon financiers other than any of the World Bank carbon funds that your are contacting (if any) INDICATIVE CER/ERU/VER PRICE The simulations were done on the basis of a reference CER price of PER tCO2e 10 € or 13 $. Price is subject to negotiation. Please indicate VER or CER preference if known. TOTAL EMISSION REDUCTION PURCHASE AGREEMENT (ERPA) VALUE A period until 2012 (end of Between 4,9 ( scenario 1) and 3.2 (Scenario 2) Million Euros, taking the first commitment period) into account 100% of the anticipated ER or 2.45 and 1.6 Million Euros for 50 % of the anticipated ER (percentage to be further discussed ) Period till end of Program Between 75 (scenario 1) and 39 (scenario 2) Million Euros for the first 10 year period (2011-2020) contemplated under the CPF and taking into account 100% of the anticipated ER or 37.5 and 19.5 Million Euros for 50% of the anticipated ER during the same period. 22 Advance payment subject to appropriate guarantees may be considered. Page 73 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note D. EXPECTED ENVIRONMENTAL AND SOCIAL BENEFITS – PROGRAM LEVEL LOCAL BENEFITS The program activity will result in the direct elimination of the LFG E.g. impacts on local air, emissions and their associated negative impacts and public water and other pollution. nuisances. It is worth mentioning that carbon finance has been integrated to the financing scheme of the NSWP. Therefore the proposed CDM PoA should not be considered just as a rational and ecological LFGs management practice but as a means and catalyst of the NSWP projects implementation and its objectives concretization. Hence, the benefits of the proposed PoA are neither more nor less than the local environmental and health benefits of moving from uncontrolled open dumps situation to sanitary landfills sustainable practices for the management of municipal wastes in the main cities of Morocco. In this perspective, besides public health benefits, the PoA activities have direct environmental benefits on the improvement of the air, water and soils quality. Specifically, with the elimination of LFG emissions, the program activities will help: ü Improve the air quality in the main cities landfills surroundings areas; ü Reduce the risks associated with fires and explosions in and around the landfill. This is particularly important as the LFG collection system will minimize the potential for LFG migration, which can infiltrate zones outside of the landfill’s; ü The destruction of the LFG will improve the local environment by reducing the amount of noxious air pollution arising from the landfill, resulting in a considerable reduction of nuisance caused by the odors and also health risks associated to these emissions. GLOBAL BENEFITS Besides reducing GHG emissions, global benefits of the PoA at a Describe if other global national level can be summarized as follows: benefits than greenhouse ü Enable the concretization of the NSWP objectives; gas emission reductions ü Develop sustainable waste management practices in Morocco; can be attributed to the ü Improve the global environment in Morocco; program. ü Help control the safety hazards and public health risks associated with municipal waste disposal in open uncontrolled dumps; ü Provide a model for managing LFG in landfills throughout Morocco; ü Reinforce Morocco capacity in municipal waste management; ü Help develop municipalities and cities CDM projects through the reinforcement of the FEC capacity in CDM projects development and carbon finance expertise. Page 74 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note In addition, the PoA will help substitute part of the primary energy used for the electricity generation in Morocco (mostly fossil fuels23 by a renewable source namely biogas from municipal waste. SOCIO-ECONOMIC ASPECTS What social and economic In the absence of the CDM the PoA most of the land filling projects of effects can be attributed to the PNMSW would not have been implemented, delayed or be the program and which carried out without the LFG capture and elimination option. would not have occurred in a comparable situation The economical benefits of the project result from the CERs selling to without that program? compensate and enable the investment in the LFG elimination and Indicate the communities use projects. and the number of people that will benefit from this Also with the reduction of the air pollution and odors, the prices of the program. nearby real state should increase resulting in a positive economic About ¼ page effect on the owners. Reducing the noxious odors can also help improve the status of the land in the vicinity of the landfill and help create new economic development projects. What are the possible direct On the social level, the project will help provide for both short- and effects (e.g. employment long-term employment opportunities for the local communities: local creation, provision of capital contractors and workers will be required for construction, and long- required, foreign exchange term staff will be employed to operate and maintain the LFG systems. effects)? About ¼ page Also, the project will help improve the quality of life of the neighboring communities (reduction of fire hazards, explosion hazards, improvement of air quality, reduction on noxious air pollution and odors nuisance etc.) In this regards it should be noted that in the current situation many families live from the meager revenues of the recyclable waste picking in open dumps. Considering the potential diseases and health hazards associated with the open uncontrolled dumps, they face high health risks. The PoA activity with sanitary landfills will eliminate these risks but will also eliminate the usually unique source of revenues of these families. Social safeguards should be envisioned with the program to help ensure decent and viable revenues for these socially vulnerable families that depend for their livelihood on waste picking. What are the possible other Besides the expected additional environmental and economical effects (e.g. benefits, the implementation of the PoA offers among others, the training/education following advantages: associated with the 23 Estimated at an annual reduction of 49 600 ton oil equivalent of fossil fuels consumed by a typical thermal power plant. Page 75 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note introduction of new ü Contribute to the CDM development in Morocco and help processes, technologies ensure the sustainable development of the country; and products and/or ü Reinforce the CDM capacity of the concerned stakeholders: the effects of a program on FEC, municipalities ; other industries)? ü Help reinforce the private sector investment in the municipal About ¼ page waste sector; ü Capacity building of the employed technical staff in sustainable solid waste management practices. ENVIRONMENTAL As stated above, the proposed CDM PoA is considered as an STRATEGY/ PRIORITIES important catalysis and financial enabling mean for the NSWP OF THE HOST COUNTRY projects implementation and its objectives concretization. Hence, the A brief description of the global benefit of the proposed PoA is the sustainable development of program’s consistency with the urban cities of Morocco through a viable municipal waste the environmental strategy management and a better local environment. and priorities of the Host Country About ¼ page Page 76 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note E. DESCRIPTION OF A TYPICAL PROJECT ACTIVITY – UNDER THE PROGRAM PROJECT ACTIVITY (CPA) DESCRIPTION OF A The proposed CDM Program Activity (CPA) consists of the LFG TYPICAL PROJECT capture, flaring or use at a specific landfill. ACTIVITY (What does a project The specific CPA can be summarized as follows: propose to do, how and • Capture LFG of eligible existing or new landfills in Morocco; what is the expected • Flare the captured LFG to eliminate the landfill methane result?) emissions; or • Use the capture biogas as fuel to generate electricity. The generated electricity can be used for own usage of the city/operator or sold to ONE or other users. BOUNDARY Considering the planned activities, a CPA is confined to the (How will each CPA be physical boundary and technical equipment of the targeted landfill. distinctly identified?) If a valorisation activity involves the feeding of the generated electricity to the national electricity grid, then the latter should be, for CDM purposes, also included in the project’s boundary. EXPECTED LOCATION OF E.g., industrial unit, factory, homes, etc PROJECT ACTIVITY (Site of actual technology Landfills in Morocco which are part of the NSWP implementation within the CPA geographical boundary) LIFETIME of EACH As in normal CDM project, length of CPA (i.e., the crediting PROJECT ACTIVITY period) must be less than equipment lifetime (Number of years) 21 years For CDM projects: Expected Crediting Period 7 years twice renewable 7 years twice renewable or 10 years fixed For JI projects: Period within which ERUs are to be earned (up to and including 2012) PROJECT PARTICIPANTS (Who will be the owners of The concerned municipality or city the CPA?) Page 77 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note Current status or phase of The targeted landfills have been selected ( see above) CPA IDENTIFICATION (Pre-selection phase/opportunity study finished/pre-feasibility study finished/feasibility study finished/negotiations phase/contracting phase etc.- mention what is applicable and indicate the documentation) F. DESCRIPTION OF THE FIRST PROJECT ACTIVITY – UNDER THE PROGRAM DETAILS OF FIRST CPA IF identified – This will be a critical requirement for validation of the Program a. Organizational category i. Government ii. Government agency iii. Municipality iv. Private company v. Non Governmental Organization vi. Other, please specify: ________________ Oum Azza landfill managed by a private company Segedema/Pizzorno as per the terms of a concession contract with a group of 13 municipalities24. b. Name of the organization Groupe Pizzorno Environnement Segedema c. Contact person Mr. Gérald Valay, Directeur Traitement d. Address 34 Bd Fal Ouled Omeir Agdal, Rabat, Morocco e. Telephone/Fax Tel: +212.37.684004 or 03 Mobile 212-61 072307 Fax: +212.772940 f. E-mail and web address, g.valay@pizzorno.com if any 24 Rabat, Salé, Bouknadel, Témara, Harhoura, Skhirate, Ain Attig, Sidi Yahya Zaers, Sebbah, Mers El Kheir, El Manezh, Ain Aouda, Oum Azza Page 78 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note g. Main activities Pizzorno Group is a French company specialized in urban Describe in not more than 5 environment services: municipal solid waste management, waste lines water sanitation and sweeping services. Since its creation in 1974, the Group has become the 4th operator in France and has developed its activities in Morocco, Tunisia (Tunis) and Mauritania (Nouakchott). The Pizzorno Group employs 7 000 staff in France and north Africa. It has achieved a turn over of 76,16 millions Euros during the first semester of 2008. The Pizzorno group has developed its activities in Morocco through a joint venture Segedema created in 1997 in association with local partners. Segedema manages currently the landfills of Oum Azza, Marrakech, El Jadida and El Hoceima. www.pizzorno.com h. Summary of the relevant Segedema benefits from the expertise of the international French experience of the Project Group Pizzorno, the 4th Environment services private operator in Participant France. The local landfill managers are French expatriates with a Describe in not more than 5 solid track record and high expertise in municipal waste lines management i. Description of financing The total initial investment cost for the construction and operation sources used by CPA of the new landfill have been estimated at 13 millions US $ (program (excluding biogas and electricity generation equipments). funds/equity/debt/others) The total investment for the biogas collecting system, flare and electricity generation station are estimated at 13,85 millions $ . Page 79 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note Investment schedule (in 1000 $): Oum Azza Year (Rabat) 2009 1 731 2010 34 2011 4 800 2012 2013 1 200 2014 2015 1 200 2016 2017 1 200 2018 2019 84 2020 1 200 2021 2022 2023 1 200 2024 2025 2026 1 200 2027 1 731 2028 Total 13 849 The investment and the cost of the new landfill operation and for the biogas collecting system, flaring and electricity generation is to be supported by Segedema. The cost of the concession contract for the construction and the operation of the Oum Azza landfill and the three transfer centers has been fixed at 150 millions US $ over a period of 20 years (with a tariff of 70 MAD/t or 8 US$/t MSW) The Government has allocated a contribution of 82,84 million MAD (9.5 US$ million) from the Government for the Oum Azza MSW land filling for the period 2008-2012. According to the 2008-2012 NSWP Action plan, a 22,9 million MAD ( US $ 2,6 million) over a total investment of 98,5 million MAD ( US $ 11.3 million) have also been allocated by the Government to the construction of the three required transfer centers. Page 80 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note LOCATION OF THE PROJECT ACTIVITY The project activity is located in the Skhirat Témara Prefecture at the Oum Azza landfill site. STATUS OF PREPARATION The Landfill has been operational since 2007. The start of the biogas emissions in the atmosphere has been recently observed on site. EXPECTED START DATE OF PROJECT June 2010 Page 81 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note EXPECTED VOLUME OF CER/VER/ERU Year the landfill opened 2007 Year the landfill closed 2027 Year crediting period begins 2011 ERU in ton CO2e/yr Net Year Methane Electrcity electrcity TOTAL destruction generation MWh/year 2011 93 898 14 957 108 855 20 190 2012 109 612 17 460 127 071 23 569 2013 124 569 19 842 144 411 26 785 2014 138 864 22 119 160 984 29 859 2015 152 584 24 305 176 889 32 809 2016 165 806 26 411 192 217 35 652 2017 178 602 28 449 207 051 38 403 2018 191 038 30 430 221 468 41 077 2019 203 173 32 363 235 536 43 686 2020 215 063 34 257 249 320 46 243 2021 226 758 36 120 262 878 48 758 2022 238 305 37 959 276 264 51 240 2023 249 747 39 781 289 529 53 701 2024 261 124 41 594 302 717 56 147 2025 272 472 43 401 315 873 58 587 2026 283 826 45 210 329 036 61 028 2027 295 219 47 025 342 243 63 478 2028 267 125 42 550 309 674 57 437 2029 241 705 38 500 280 205 51 971 2030 218 703 34 837 253 540 47 026 2031 197 891 31 521 229 413 42 551 1st 963 936 153 543 1 117 478 207 266 2nd 1 585 208 252 503 1 837 711 340 852 3rd 1 776 941 283 044 2 059 985 382 079 Total 4 326 085 689 090 5 015 175 930 197 Average per year 206 004 32 814 238 818 44 295 Over first 10 year period 1 573 210 250 592 1 823 802 338 272 Page 82 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note ANNEXES LIST Annex A : Copy of the official letter from the Moroccan Ministry of Interior Annex B : Questionnaire form Annex C: CERs and electricity generation schedules Annex D: Detail of waste stream per landfill Page 83 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note ANNEX A: COPY OF THE OFFICIAL LETTER FROM THE MOROCCAN MINISTRY OF INTERIOR Page 84 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note ANNEX B : QUESTIONNAIRE FORM MONTAGE MDP PROGRAMMATIQUE POUR LES DECHARGES COLLECTE DES INFORMATIONS A- INFORMATIONS GENERALES Nom de la Commune /Ville Nom de la décharge Tonnage journalier t/j Taux de croissance annuel préconisé en % Nombre d’habitants desservis Composition type moyenne des déchets : Matières organiques…….%; Papier-carton……….%; Plastique……..%; Métal………%; Verre…….%; Chiffons/tissus ……..%; Divers………% Densité ………………. Humidité………% Fermée £ Projet de nouvelle décharge contrôlée £ Type de décharge Décharge en activité : Non contrôlée £ Contrôlée £ Gestion Communale £ Gestion déléguée £ Nom de la société Gestion de la décharge délégataire :……………………… Période et date de la fin du contrat…………………… Date d’ouverture de la décharge :……………………………………….. Date de fermeture prévue :………………………………………………… Superficie ……………………………………….hectares Page 85 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note Nom et fonction de la personne contact (Président, ingénieur communal, responsable société délégataire) Téléphone : Email : Fax : B- PROJET DE RÉHABILITATION Prière de remplir cette partie s’il s’agit d’un projet de réhabilitation de décharge Date de démarrage du projet de réhabilitation : Calendrier prévisionnel de réalisation du projet de réhabilitation: Date de démarrage du projet :………………………………… Date prévue pour la fin des travaux :…………………………. Budget total requis :……………….MDh Montant mobilisé :………………..MDh Source de financement………….………… Autres financements …………… MDh Source de financement……………………. MDh Source de financement…………………….. Fermeture……………£ Gestion après réhabilitation Gestion communale…£ Gestion déléguée……£ C- PROJET D’AMÉNAGEMENT D’UNE NOUVELLE DÉCHARGE CONTROLEE Prière de remplir cette partie s’il s’agit d’un projet d’aménagement d’une nouvelle décharge contrôlée Calendrier prévisionnel du projet d’aménagement de la nouvelle décharge : Date de démarrage des travaux :………………………………… Date prévue pour la fin des travaux :…………………………. Page 86 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note Investissement total requis :…………MDh Montant mobilisé :…………………….MDh Source de financement………….………… Autres financements …………………MDh Source de financement……………………. MDh Source de financement…………………….. Gestion de la nouvelle décharge Gestion communale…£ Gestion déléguée……£ D- PROJET DE CAPTAGE ET VALORISATION DU BIOGAZ – MDP Prière de remplir cette partie si des démarches pour le montage MDP du projet ont été entreprises Type de projet MDP envisagé : Captage du biogaz et torchage : £ Captage du biogaz et génération de l’électricité : £ Contacts établis pour le montage MDP (AND-FEC- Sociétés privées, etc.) …………………………………………………………………………………………………. ………………………………………………………………………………………………..……… Conventions signées………………………………………………………………………… ………………………………………………………………………………………………… Investissements prévus pour le montage MDP :…………………………………………. ………………………………………………………………………………………………… Sources de financement préconisées :…………………………………………………... …………………………………………………………………………………………………. Dans le cas d’une gestion déléguée, partage prévu des crédits carbone : ………………………………………………………………………………………………… …………………………………………………………………………………………………. Partage prévues des coûts d’investissement : Part à la charge de la Commune/Ville :…………………………. Part à la charge du délégataire :…………………………………… Documents MDP préparés : NIP £ PDD £ Etude de faisabilité technique du projet £ Page 87 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note Évaluation ……………………………….t/an de méthane du ……………………………….URCES/an gisement de biogaz Remarques/Commentaires……………………………………………………… ……………………………………………………………………………………… Page 88 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. ANNEX C: CERS AND ELECTRICITY GENERATION SCHEDULES Scenario I : PoA CERs Generation t eq. CO2/year Year Agadir Casa Al Hoceima Marrakech Meknès Rabat El Jadida Tanger Akreuch Oujda Berkane Total 2011 4 780 108 855 15 587 34 974 23 367 8 723 196 286 2012 38 256 5 804 43 684 127 071 17 824 31 646 26 654 10 183 301 123 2013 46 589 6 775 53 510 34 173 144 411 19 997 28 635 29 828 11 573 375 490 2014 54 549 218 389 7 700 63 029 41 859 160 984 22 118 25 910 32 904 12 901 640 343 2015 62 185 265 194 8 584 72 301 49 306 176 889 24 198 42 950 23 444 35 901 14 175 775 127 2016 69 543 309 572 9 432 81 377 56 559 192 217 26 248 52 155 21 213 38 833 15 404 872 552 2017 76 666 351 815 10 249 90 307 63 659 207 051 28 276 60 883 19 194 41 715 16 593 966 409 2018 83 591 392 190 11 040 99 138 70 645 221 468 30 293 69 191 17 368 44 559 17 748 1 057 231 2019 90 356 430 938 11 809 107 913 77 553 235 536 32 306 77 131 15 715 47 378 18 875 1 145 510 2020 96 991 468 281 12 559 116 672 84 417 249 320 34 323 84 752 14 219 50 183 19 980 1 231 698 2021 103 529 504 420 13 294 125 454 91 269 262 878 36 352 92 096 12 866 52 984 21 066 1 316 209 2022 109 996 539 542 14 017 134 295 98 139 276 264 32 893 99 204 11 642 55 792 22 139 1 393 922 2023 116 419 573 815 12 683 143 229 105 055 289 529 29 763 106 111 10 534 58 614 23 202 1 468 954 2024 122 822 607 395 11 476 152 291 112 044 302 717 26 930 112 851 9 532 61 461 24 259 1 543 780 2025 129 228 640 425 10 384 161 511 119 133 315 873 24 368 119 455 8 625 64 341 21 950 1 615 293 2026 135 657 673 037 9 396 170 921 126 346 329 036 22 049 125 951 7 804 58 218 19 862 1 678 276 2027 142 130 608 989 8 502 180 551 133 707 342 243 19 951 132 365 7 061 52 678 17 972 1 646 148 2028 148 665 551 036 7 693 190 429 141 240 309 674 18 052 138 720 6 389 47 665 16 261 1 575 825 2029 155 281 498 598 6 960 200 586 148 968 280 205 16 334 145 040 5 781 43 129 14 714 1 515 595 2030 161 993 451 150 6 298 181 497 156 913 253 540 14 780 151 343 5 231 39 025 13 314 1 435 083 2031 146 578 408 217 5 699 164 226 141 980 229 413 13 373 157 650 4 733 35 311 12 047 1 319 226 2032 132 629 369 370 148 597 128 469 163 977 943 043 2033 334 220 116 244 148 373 598 837 2034 302 415 134 253 436 668 2035 121 477 121 477 TOTAL 2 223 653 9 499 009 195 131 2 681 519 2 097 680 5 015 175 506 013 2 335 931 322 516 940 539 352 941 26 170 106 CPF 10 years 618 725 2 436 379 88 731 727 931 478 172 1 823 802 251 169 387 063 232 318 371 323 146 155 7 561 768 period Up to 2012 38 256 - 10 584 43 684 - 235 926 33 410 - 66 620 50 021 18 907 497 409 89 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note Scenario II : PoA CERs Generation t eq. CO2/year Year Agadir Casa Al Hoceima Marrakech Meknès Rabat El Jadida Tanger Akreuch Oujda Berkane Total 2011 4 780 93 898 13 445 7 375 119 498 2012 32 999 5 804 37 682 109 612 15 375 8 609 210 081 2013 40 188 6 775 46 157 29 478 124 569 17 249 9 784 274 201 2014 47 054 7 700 54 369 36 108 138 864 19 079 10 907 314 081 2015 53 640 8 584 62 366 42 531 152 584 20 873 37 049 11 984 389 613 2016 59 988 9 432 70 196 48 788 165 806 22 641 44 989 13 023 434 862 2017 66 132 10 249 77 899 54 912 178 602 24 391 52 518 14 028 478 731 2018 72 106 11 040 85 516 60 938 191 038 26 131 59 684 15 005 521 458 2019 77 941 11 809 93 086 66 897 203 173 27 867 66 533 15 958 563 264 2020 83 665 12 559 100 641 72 818 215 063 29 607 73 107 16 892 604 352 2021 89 304 13 294 108 216 78 729 226 758 31 357 79 442 17 810 644 911 2022 94 883 14 017 115 842 84 655 238 305 28 373 85 573 18 717 680 365 2023 100 423 12 683 123 549 90 620 249 747 25 673 91 531 19 616 713 843 2024 105 946 11 476 131 366 96 649 261 124 23 230 97 345 20 509 747 647 2025 111 472 10 384 139 319 102 764 272 472 21 019 103 042 18 558 779 031 2026 117 018 9 396 147 437 108 986 283 826 19 019 108 646 16 792 811 119 2027 122 601 8 502 155 743 115 336 295 219 17 209 114 178 15 194 843 981 2028 128 238 7 693 164 264 121 834 267 125 15 572 119 660 13 748 838 133 2029 133 945 6 960 173 025 128 500 241 705 14 090 125 111 12 440 835 775 2030 139 735 6 298 156 559 135 353 218 703 12 749 130 548 11 256 811 202 2031 126 438 5 699 141 661 122 472 197 891 11 536 135 988 10 185 751 869 2032 114 406 128 180 110 817 141 447 494 850 2033 100 272 127 986 228 258 2034 115 807 115 807 2035 104 786 104 786 TOTAL 1 918 121 - 195 131 2 313 075 1 809 457 4 326 085 436 486 2 014 972 - - 298 389 13 311 717 CPF 10 years 533 712 - 88 731 627 913 412 470 1 573 210 216 658 333 880 - - 123 565 3 910 139 period Up to 2012 32 999 - 10 584 37 682 - 203 510 28 820 - - - 15 984 329 579 Page 90 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. ANNUAL CERS GENERATION 1800 1600 1400 Scenario I 1200 CERs in 1000 t CO2 1000 Scenario II 800 600 400 200 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Page 91 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note ANNUAL ELECTRICITY GENERATION 350 100 90 300 80 250 Electrcity generation in GWh 70 60 Power in MW 200 50 150 40 30 100 20 50 10 0 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Power GWh Annex D: Landfills waste streams Scenario I Waste generated Annual growth LANDFILL/COMMUNE/CITY t/year % rate % Akreuch 98 103 3% 3% Agadir 200 750 7% 4% Berkane 43 800 2% 3% Casablanca 1 204 500 41% 3% El Hoceima 29 930 1% 3% El Jadida 60 955 2% 4% Marrakech 262 800 9% 5% Meknès 182 500 6% 5% Page 92 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note Oujda 98 550 3% 4% Rabat 511 000 18% 3% Tangiers 219 000 8% 3% Total 2 911 888 100% 3,3% Scenario II Waste generated Annual growth LANDFILL/COMMUNE/CITY t/year % rate % Agadir 200 750 13% 4% Berkane 43 800 3% 3% El Hoceima 29 930 2% 3% El Jadida 60 955 4% 4% Marrakech 262 800 17% 5% Meknès 182 500 12% 5% Rabat 511 000 34% 3% Tangiers 219 000 14% 3% Total 1 510 735 100% 3,5% Page 93 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Program Idea Note EXPECTED VOLUME OF CER/VER/ERU Year the landfill opened 2009 Year the landfill closed 2029 Year crediting period begins 2012 ERU in ton eq. CO2/year Electricity Year methane Electrcity generation in total destruction generation MWh 2 012 37 682 6 002 43 684 8 102 2 013 46 157 7 352 53 510 9 925 2 014 54 369 8 660 63 029 11 690 2 015 62 366 9 934 72 301 13 410 2 016 70 196 11 181 81 377 15 093 2 017 77 899 12 408 90 307 16 750 2 018 85 516 13 622 99 138 18 388 2 019 93 086 14 827 107 913 20 015 2 020 100 641 16 031 116 672 21 640 2 021 108 216 17 237 125 454 23 269 2 022 115 842 18 452 134 295 24 908 2 023 123 549 19 680 143 229 26 566 2 024 131 366 20 925 152 291 28 246 2 025 139 319 22 192 161 511 29 957 2 026 147 437 23 485 170 921 31 702 2 027 155 743 24 808 180 551 33 488 2 028 164 264 26 165 190 429 35 320 2 029 173 025 27 561 200 586 37 204 2 030 156 559 24 938 181 497 33 663 2 031 141 661 22 565 164 226 30 460 2 032 128 180 20 417 148 597 27 561 1 st period 434 186 69 160 503 346 93 359 2nd period 812 020 129 344 941 365 174 601 3rd period 1 066 869 169 939 1 236 808 229 399 Total 2 313 075 368 443 2 681 519 497 359 Average 110 146 17 545 127 691 23 684 Page 94 of 95 Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. Annex D Survey filled forms 95