How todevelop a JCM
project
Keni Atika
Indonesia JCM Secretariat

Presentation outline• Financing support fromthe Government ofJapan• JCM project cycle

FINANCING SUPPORT FROM THE
GOVERNMENT OF JAPANDeveloping a JCM Project

FindIndonesianpartner

Developbusinessidea••

Apply JCM
financingprogramme& developmethodology

Developconsortium(JointVenture, etc.)

Japanese entity submits
application (in Japanese)
Sample document of “Agreement on
International Consortium (Example)”••Through workshop & Secretariat
Project Idea Note (PIN)

Secure finance other than JCM orFind another financial source for the rest of initial cost (JCM
financing programs will not cover all cost, e.g. JCM Model Project
covers less than half of the investment cost)

Source: IGES, 2016

4

How we accommodate the involvementof private sectors to join us?
Private Sectors from Japan
Share information to private sectors

Secretariat from Japan Side
Submit project / study idea (PIN recommended)

Private Sectors from Japan
Convey toJapan side

Private Sectors from Indonesia
Submit project / study idea (PIN recommended)

Secretariat from Indonesia Side
Share information to private sectors

Private Sectors from IndonesiaConvey toIndonesiasideIGES’ JCM Matchmaking
Platform

Institute for Global Environment Studies (IGES), provides amatchmaking platform for companies from Japan and host countries.
Through this platform, interested companies can find partner(s) todevelop JCM projects.
The platform can be accessed through:http://jcm-matchmaking.iges.jp/#tab_home

JCM Model Project (MoEJ)
The draft budget for projects
starting from FY 2016 is
6.7 billion JPY (approx. USD 56
million) in total by FY2018※Budget will
be fixed after
approval by theParliament

Government ofJapan

Finance part of aninvestment cost(less than half)※Includes collaboration withprojects supported by JICA andother governmental-affiliatedfinancial institute.
Conduct MRV and expected todeliver at least half of JCM
credits issued

International consortiums(which include Japanese entities)

 Scope of the financing: facilities, equipment, vehicles, etc. which reduce CO2 from fossil fuelcombustion as well as construction cost for installing those facilities, etc.
 Eligible Projects : starting installation after the adoption of the financing and finishing installation
within three years.
7Source: Ministry of Environment Japan, 2016

ADB – Japan Fund for JCM
SchemeTo provide the financial incentives for the adoption of advanced low-carbon technologies which are superior
in GHG emission reduction but expensive in Asian Development Bank (ADB)-financed projects.

PurposeTo develop ADB projects as the “Leapfrog” developments by the advanced technologies and to show theeffectiveness of the JCM scheme by the acquisition of credits of the JCM.
JCM Credits

ADB
MOEJ

Contribution

JFJCM(Trust Fund)

OCR/ADF*

Other financialinstitutionsand funds
Source: Ministry of Environment Japan, 2016

MRVGrant

GHG
Emission
Reduction

Additional costs withadoption ofadvanced low-carbon
technologies

Loan/Grant etc.
Cofinancing

Mitigation throughconventionaltechnologies

Loan/Grant etc.

(Selection frompipeline projects)

Project8

JFJCM funding scheme
General eligibility

Grant & interest subsidy

Project co-financed withan ADB or ADBadministered funds withproven advanced lowcarbon technologies

Sovereign/public sector
Maximum grant of $10 million or 10% of theproject cost, whichever is lower, or $5 million
if the project cost < $50 million

Leads to a reduction ofenvironmental pollution
and/or other social
economic benefits

Source: IGES, 2016

Non-sovereign-Project Owner
Interest subsidy up to $10 million or 10% of
the project cost, whichever is lower

Non-sovereign - Local Financial Institution
Interest subsidy further reduces financing
cost of host country financial institutions(banks, ESCOs, leasing companies)
9JCM Demonstration project (METIJ)
Funded by Ministry of Economy, Trade & Industry Japan and implemented by New
Energy and Industry Technology Development
METI/NEDO
Technology
provider fromJapan
Project participant inIndonesia

Funding provided up to more than 50% from the investment• Coverage of funding:
Cost of the JCM Demonstration project necessary MRV e.g. cost of design,machinery, material, labor travel, etc.
• Within certain period, the equipment will be owned by METI, subsequently it
will be transferred to the participant• Establishment of Joint Venture is not mandatory

JCM PROJECT CYCLE: WHAT YOU
NEED TO KNOW AFTER YOU RECEIVE
THE JCM FINANCIAL SUPPORTJCM Project Cycle

Can be conducted by the same TPE
Can be conducted simultaneously

Project Participant / Each Government
Joint Committee

Submission ofProposed
Methodology

Joint Committee

Approval of
Proposed
Methodology

Project Participant

Developmentof PDD*

Third Party Entities

Validation

Joint Committee

Registration

Project Participant

Monitoring

Third Party Entities

Verification

Joint Committee decides the amount
Each Government issues the credit

Issuanceof credits

Measurement

Reporting

Verification*PDD: Project Design
Document
12

Measuring emission reductionin JCM
Indonesia domesticemission reduction
Emission reduction
credited by JCM

JCM utilizes reference emission based calculation
1. In the JCM, emission reductions to be credited are defined as the difference
between reference emissions and project emissions.
2. Reference emissions are calculated below business‐as‐usual (BaU) emissions
which represent plausible emissions in providing the same outputs or service
level of the proposed JCM project in the host country.
3. JCM approach will ensure a net decrease and/or avoidance of GHG emissions.
4. The value of Reference Emissions in JCM depends on the methodology.
Therefore, the value can be equal or different with Baseline Emission.

Methodology in JCM• JCM methodologies should cover these 3 elements:
Eligibility criteria

Monitoring methodEmission reductionmeasurement
method• The methodology is designed according to the type of appliedtechnology.

1 methodology is applicable for many projects which utilize the same technology

SDIP and SDIR
Sustainable Development
Implementation Plan (SDIP)

Sets out a plan of the JCM project tocontribute to sustainable development
based on ex-ante analysis

Sustainable Development
Implementation Report(SDIR)

Sets out the achievement of SDIP
implementation for a particular monitoring
method7 sustainable development items considered in JCM:

Environmental
Impact Assessment

EconomyPollution control Safety and healthSocial Environment andCommunity Participation

Natural Environmentand Biodiversity

TechnologyDeveloping PDD in JCM
PDD
Monitoringform

PDD form
Project
explanation

Selection ofmethodology(ies)

Estimatedemission
reduction

EIA (if any)

LSC result

Ex-ante data

Ex-post data

PDD sets out in detail , in line with the JCM rules and guidelines,
the JCM project which is to be realized.
Project Participant (PP)- TPE validate PDD- TPE receive and check thecompleteness of implementation plan

Submissionof validation
report by PP
Submit PDD for public input

Indonesia JCM
Secretariat

Indonesia JointCommitte

Validation and verification withTPE• TPE are selected by the project participants to validate and/orverify their PDD and/or emission reductions.
• Requirements/Eligibility:– Candidate entities are either:(a) Accredited under ISO 14065; or(b) Designated Operational Entities (DOEs) under the UNFCCC
CDM– Candidate entities have sufficient knowledge of the JCM
between the Republic of Indonesia and Japan by reading andknowing all applicable rules and guidelines of the JCM.

• Eligible entities can apply as TPE for JCM in each host country
separately– Candidate entity submit application form and related document statedin Guideline for TPE to JCM Secretariat of Japan and Indonesia(id-jc-secretariat@jcm.go.jp and secretariat@jcmindonesia.com )TPE in Indonesia
TPE

JCM Sectoral Scope(for Validation and Verification)

Lloyd’s Register Quality
1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13
Assurance Limited (LRQA)
Japan Quality Assurance
1, 3, 4, 5, 9, 10, 13, 14
Organization (JQA)
Japan Management Association
1, 2, 3, 4, 6, 8, 9, 14(JMA)TÜV SÜD South Asia Private
1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12,
Limited (TÜV SÜD)13, 14, 15
Deloitte Tohmatsu Evaluation
1, 2, 3, 4, 5, 8, 10, 12, 13, 15
and Certification Organization
Co., Ltd.
1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12,
TÜV Rheinland (China) Ltd.
13, 14, 15
1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 13,
EPIC Sustainability Services
14, 15
Private Limited (India)
KBS Certification Services Pvt.
1, 3, 4 ,5, 6, 7, 9, 10, 11, 13, 15
Ltd. (India)
1, 2, 3, 14, 15
PT Mutu Agung Lestari
Provisionally designated: 4, 13
ERM Certification and
1, 2, 3, 4, 5, 8, 9, 10, 13, 15
Verification Services Ltd
PT TUV Rheinland Indonesia

1,2,3,4,7,13,15

Accreditation
ISO 14065 CDM DOE
Yes

Yes

Yes

Yes

Yes

Yes

NoYes

NoYes

NoYes

No

Yes

No

Yes

Yes

NoNo

Yes

Yes

No

Sectoral Scope

1. Energy Industries(renewable/non-renewablesources);
2. Energy Distribution;
3. Energy Demand;
4. Manufacture Industries;
5. Chemical Industries;
6. Construction;
7. Transport;
8. Mining/Mineral Production;
9. Metal Production;
10. Fugitive emissions from fuel(solid, oil and gas);
11. Fugitive emissions fromproduction and consumption of
halocarbons and sulfur
hexafluoride;
12. Solvent Use
13. Waste handling and disposal
14. Reducing emissions from
Deforestation and Forest
Degradation in developingcountries; and the role ofconservation, sustainable
management of forest andforest carbon stocks indeveloping countries (REDDplus),
15. Agriculture.

Credit issuance
Project ParticipantsRequest for notification for issuance Determine allocationof credits
Notify the receipt of Secretariat
 Complete a credit
the request  Completeness checkissuance request[7 days] (secretariat)
form* Credit issuance requestJoint Committee
form
Notify the result Decision on
notification ofamount of credits tobe issued
Notify the issuance

Notify the amount of credits
to be issued

Government
 Issuance of credits• Once the GHG emission is verified by the TPE and SDIR is deemed positiveby the JC, project participants can request for JCM credit issuance.
• Part of the JCM credit will be belong to Government of Indonesia andJapan.
• The project participants are allowed to have the JCM credit and should
discuss among themselves for the credit portion of each respected
entities.Thank you! Terima kasih!
Our website: http://jcm.ekon.go.id
Contact us at secretariat@jcmindonesia.com
Sekretariat JCM Indonesia
Gedung Kementerian Koordinator Bidang Perekonomian Lt.2
Jl. Medan Merdeka Barat 7, Jakarta 10110