For its third auction, the PAF will accept emission reductions that comply with the following eligibility criteria:
- Emission Reductions Eligibility
- Eligible Methodologies
- Ineligible Methodologies (Adipic Acid)
- Eligible Countries
- Eligible Generation / Issuance Period
- Sub-Auctions &Abatement Project’s Operational Status before the Auction Date
- Environmental, Health & Safety and Social Criteria (EHS), and Integrity Criteria
A. Certified Emission Reductions Eligibility
To be eligible to exercise the put option, a qualified emission reduction (ER) must satisfy all of these six criteria at the time of exercise:
- Be a Clean Development Mechanism (CDM) Certified Emission Reduction (CER) or a Verified Carbon Standard (VCS) Verified Carbon Unit (VCU)
- Not be subject to a purchase agreement contract with a third-party
- Originate from a project or program of activities that uses methodologies listed in the eligible methodologies table
- Originate from a project or program of activities in a host country or countries listed in the eligible countries table
- Have a CDM or VCS Issued Date and a Monitoring Period that are compliant with the Eligible Generation / Issuance Periods
- Be accompanied by a passing Environmental, Health & Safety and Social (EHS), and Integrity report from the project or program of activities from which it originated
B. Eligible Methodologies
The emission reductions must be Certified Emission Reductions (CERs) or Verified Carbon Standard (VCS) Verified Carbon Units (VCUs), from a project or program of activities that uses one of the methodologies listed in the table below. Projects using a combination of methodologies listed below are also eligible as long as all are included in the table below:
| CDM Methodologies | |||
| AM0028 | AM0034 | AM0051 | ACM0019 |
| VCS Methodologies | |||
| VCS projects in the N2O sector use the CDM methodologies listed above | |||
C. Ineligible Methodologies
Emission reductions from a project or program of activities using the following methodology relating to adipic acid are specifically excluded:
| CDM Methodology | |||
| AM0021 |
D. Eligible Countries
The emission reduction must originate from a CDM or VCS project or program of activities that has all of its host countries listed in the Eligible Countries table below:
| Afghanistan | Egypt | Malawi | Serbia |
| Albania | El Salvador | Malaysia | Seychelles |
| Algeria | Equatorial Guinea | Maldives | Sierra Leone |
| Angola | Eritrea | Mali | Solomon Islands |
| Antigua and Barbuda | Ethiopia | Marshall Islands | Somalia |
| Argentina | Fiji | Mauritania | South Africa |
| Armenia | Gabon | Mauritius | South Sudan |
| Azerbaijan | Gambia, The | Mexico | Sri Lanka |
| Bangladesh | Georgia | Micronesia | Sudan |
| Belize | Ghana | Moldova | Suriname |
| Benin | Grenada | Mongolia | Swaziland |
| Bhutan | Guatemala | Montenegro | Syria |
| Bolivia | Guinea | Morocco | Tajikistan |
| Bosnia and Herzegovina | Guinea-Bissau | Mozambique | Tanzania |
| Botswana | Guyana | Myanmar | Thailand |
| Brazil | Haiti | Namibia | Timor-Leste |
| Burkina Faso | Honduras | Nepal | Togo |
| Burundi | India | Nicaragua | Tonga |
| Cambodia | Indonesia | Niger | Trinidad and Tobago |
| Cameroon | Iran | Nigeria | Tunisia |
| Cape Verde | Iraq | Pakistan | Turkmenistan |
| Central African Republic | Jamaica | Palau | Tuvalu |
| Chad | Jordan | Panama | Uganda |
| Chile | Kazakhstan | Papua New Guinea | Uruguay |
| Colombia | Kenya | Paraguay | Uzbekistan |
| Comoros | Kiribati | Peru | Vanuatu |
| Congo, Dem Rep of | Kyrgyzstan | Philippines | Venezuela |
| Congo, Rep of | Laos | Rwanda | Vietnam |
| Costa Rica | Lebanon | Saint Kitts and Nevis | Yemen |
| Côte d'Ivoire | Lesotho | Saint Lucia | Zambia |
| Djibouti | Liberia | Saint Vincent and the Grenadines | Zimbabwe |
| Dominica | Libya | Samoa | |
| Dominican Republic | Macedonia | São Tomé and Príncipe | |
| Ecuador | Madagascar | Senegal |
E. Eligible Generation / Issuance Period
In the third auction, the winners will receive PAFERNs that may be redeemed in full or in part on three consecutive Optional Delivery Dates or a final Maturity Date. The emission reductions must adhere to the timeline below:
| Optional Delivery | Maturity | |||
| Date | Nov. 29, 2017 | Nov. 29, 2018 | Nov. 27, 2019 | Nov. 30, 2020 |
| Eligible Monitoring Period (CER) or Vintage Period (VCU) start date | Any date on or after the Auction Date (Jan. 10, 2017) | |||
F. Segments: "New Segment" and "Open Segment"
The PAF will issue PAFERNs specific to two auction segments: the “New Segment" and the "Open Segment."
The New Segment will sell PAFERNs that may be redeemed with eligible emission reductions from N2O abatement projects that have not purchased abatement technology before the Auction Date, meaning that the date on which the abatement Project first purchases a secondary or tertiary catalyst or abatement equipment at an existing host site must be at the earliest on the Auction Date. To determine the First Abatement Technology Purchase Date, a DOE will determine through Project records the date of the purchase of the Abatement Technology.
The Open Segment will sell PAFERNs that may be redeemed with eligible emission reductions generated after the auction date from N2O abatement projects that exist at the time of the auction or that are the result of new investments.
G. Environmental, Health & Safety and Social Criteria (EHS), and Integrity Criteria
The emission reductions must originate from a CDM or VCS project or program of activities that has received a passing Environmental, Health & Safety and Social (EHS), and Integrity report from a Designated Operational Entity (DOE) accredited at the time of the report. The report has to be dated no more than 608 days prior to the Optional Delivery Date, should the Optional Delivery Date be utilized, or the Maturity Date. If multiple Optional Delivery Dates are utilized, at each Optional Delivery Date a passing EHS report is to be delivered that is dated no more than 608 days prior.
The complete Environmental, Health & Safety and Social Criteria (EHS), and Integrity Criteria can be found here >>EHS & Integrity Criteria
THE FOLLOWING IS A SUMMARY OF THE WORLD BANK’S PROPOSED PLAN TO ISSUE PILOT AUCTION FACILITY EMISSION REDUCTIONS NOTES (“PAFERNS”). IT IS NOT AN OFFER TO SELL PAFERNS OR AN INVITATION TO OFFER TO BUY PAFERNS. THIS SUMMARY IS SEPARATE FROM, AND SHOULD NOT BE READ IN COMBINATION WITH, ANY FUTURE OFFER OR SALE OF PAFERNS, WHICH WILL BE MADE IN COMPLIANCE WITH APPLICABLE LAWS AND UNDER ENTIRELY SEPARATE LEGAL DOCUMENTATION AND OFFERING MATERIALS. THIS SUMMARY IS VERY HIGH LEVEL FOR SIMPLICITY AND LEAVES OUT MATERIAL INFORMATION AND THE LEGAL DOCUMENTATION THAT IS EXPECTED TO GOVERN THE PAFERNS. FURTHER, IT IS CURRENT ONLY AS OF THE DATE OF POSTING TO THIS WEBSITE AND IS LIKELY TO BECOME OUTDATED AS THE PAFERNS LEGAL DOCUMENTATION IS DEVELOPED. THE STRUCTURE, TIMING AND MECHANICS OF THE ACTUAL PAFERNS, IF AND WHEN THEY ARE ISSUED, ARE SUBJECT TO CHANGE. POTENTIAL INVESTORS MUST OBTAIN A COPY OF THE COMPLETE LEGAL DOCUMENTATION PURSUANT TO WHICH THE PAFERNS WILL BE ISSUED, INCLUDING THE WORLD BANK’S MAY 2008 PROSPECTUS RELATING TO ITS GLOBAL DEBT ISSUANCE FACILITY AND THE FINAL TERMS FOR ANY ISSUANCE OF PAFERNS. POTENTIAL INVESTORS SHOULD NOT RELY ON THIS SUMMARY. BEFORE MAKING ANY INVESTMENT DECISION, POTENTIAL INVESTORS MUST REVIEW THE COMPLETE LEGAL DOCUMENTATION (ONCE AVAILABLE).
Last update -- September, 2016
