UN Division for Sustainable Development

Case Study Detail Record

Organization type:	Government

Name of Ministry/Agency:

Country:	Bulgaria

Initiative Title:	Green Investment Scheme (GIS)

Internet links:

Scope:

Status:	Completed

Timeframe:	Start: End:

Lead Institution:	Ministry of Environment and Water Ministry of Finance Ministry of Economy and Energy

Stakeholders/Partners:	The National Trust EcoFund

Relevent issues:	- Mitigation policies/measures

Objectives/Challenges:

1) To decide on the establishment of a Green Investment Fund and its basic conditions;
2) To elaborate on the design of the GIS;
3) To train emissions trading specialists in the responsible agencies;
4) To create a fund accumulating the revenues from emission trading and rules for their spending;
5) To negotiate with potential investors/buyers of green AAUs.

Policy Options:

A basis for implementation of the Green Investment Scheme is the special circumstance of the Republic of Bulgaria, where there is surplus quotas available, which could be transferred to other Annex I parties. Bulgaria has a big interest in the implementation of the Green Investment Scheme because it will lead to environmental benefits for the country. It will also result in the use of the generated resources to support measures for greenhouse gases emissions reduction and activities on executing the international obligations of Bulgaria under the Convention and the Kyoto Protocol.

Summary:

The Study has been prepared by the World Bank upon request of the Government of Bulgaria. It examines the various issues surrounding the “Greening of Assign Amount Units (AAUs)” with a view to provide recommendations to the Government of Bulgaria and interested parties on considerations and approaches for a potential transaction involving a sale of AAUs and implementing a GIS in Bulgaria.

Through the Scheme a number of activities can be financed – capacity building, data collection, large-scale projects on greenhouse gases emissions reduction, mainly through improvement of the energy efficiency, combustion and production processes improvement, use of renewable energy resources, etc. The Green Investment Scheme will guarantee that incomes generated from the sale of emissions will be used for activities on climate change mitigation.

A Green Investment Scheme is a mechanism for receiving payments for AAUs providing the country with a revenue stream earmarked for climate change mitigation purposes that otherwise might not be forthcoming. The Scheme accelerates an investment in emission reduction projects that would have not happened otherwise by addressing the lack of access to capital and other barriers to investment. The funding could be channeled towards capacity building activities for strengthening the capacity to implement the Kyoto Protocol, including improved monitoring, inventories, etc. This would reduce the uncertainty relating to targets set in the negotiations and would strengthen the ability of EIT countries to reduce emissions.

The Study has examined three options for a GIS fund structure and reviewed the implications for GIS implementation, inter-ministerial coordination, capital mobilization, risk mitigation & management, and fiduciary obligations.