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Annexure B

Case Studies

1) State Bank of India: In August 2007, SBI entered into an Memorandum of Understanding (MOU) with MITCON Consultancy Services Ltd., Ecosecurities India Pvt. Ltd. and Cantor CO2E India Private Ltd. for jointly providing one-stop solutions to
industries for CDM projects and emissions trade.

SBI proposes to provide a single point of delivery related to Carbon Credits / Clean Development Mechanism (CDM), under the Kyoto Protocol, to its customers. These include apart from finance to implement CDM projects, advisory services and value-added products like securitization of carbon credit receivables, carbon credit delivery guarantees and escrow mechanism for carbon credits. With its large base of SME customers, SBI sees the possibilities for aggregating / bundling of individual CDM projects from SMEs into viable sized lots as a specific and special area of thrust. Creating awareness of the CDM among the industrial units and the additional cash flows it would generate would be the focus of the Bank. With so many potential buyers and sellers in this market, counter party risk can become a key risk in carbon credits trading, and SBI with its wide Indian and International presence can play a major role here.

Analysts peg the global carbon trading market at $ 100 billion by 2010. Indian carbon market has the potential to supply 30-50% of the projected global market of 700 million CERs by 2012. SBI is chalking out an aggressive strategy to tap into this market.

The tie-up with reputed CDM Consultants will benefit a large number of industrial units who will form a complete package of services through guidance from reliable partners with proven experience in the Carbon Credit business with the backing of State Bank of India.

2) IDBI: In January 2007, Industrial Development Bank of India Ltd. (IDBI) tied up with German bank, KfW Bankengruppe, to help Indian companies identify projects, fund the projects, and help earn carbon credits. The tie-ups will also help the companies find a suitable buyer in the international market.

Additionally, IDBI plans to pool smaller volumes of CERs or carbon credits from various Indian projects aggregate the CERs and sell them in the international market.

In a press release, IDBI said companies planning to undertake Clean Development Mechanism (CDM) projects under the Kyoto Protocol can now approach the IDBI-KfW combine for solutions that include project identification, funding implementation of CDM projects, registration and verification, advisory services for trading Certified Emission Reduction (CER) units and CER-buyers.

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* Contributed by: -
Prateek Mathur & Pinky Singh,
MBA (2nd Year),
Faculty of Management Studies (FMS),
University of Delhi, Delhi.
Article posted on March 7, 2009.