Ecofys supported the Chilean government to develop a proposal for a NAMA in “self-supply energy systems based on non-conventional renewable energy” in Chile. The proposal was developed in cooperation with Fundación Chile and financed by the International Climate Initiative of the German government through the Mitigation Momentum project (www.mitigationmomentum.org). The development of the proposal was undertaken in a consultative process involving key governmental, private sector and civil society stakeholders, building on existing knowledge and initiatives in the sector as well as the government’s immediate and longer-term policy and development objectives. The full study is available at ecofys.com

1. Supporting NAMA
development in Chile
Ecofys webinar
20/02/2014
Frauke Roeser

2. Outline
Introduction to NAMAs
Case Study – Chile Self-supply Renewable Energy
Q&A
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3. Backdrop
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4. The evolution of NAMAs in the climate negotiations
> Paragraph 1 (b) (ii) of the Bali Action Plan of 2007:
> “ […] Nationally appropriate mitigation actions by developing country Parties
in the context of sustainable development, supported and enabled by
technology, financing and capacity building, in a measurable,
reportable and verifiable manner.”
COP 13 Bali
• Bali Action
Plan first
mentions
NAMAs
4
COP 15
Copenhagen
• NAMA
submissions by
countries
• „NAMAs to be
subject to MRV“
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COP 16
Cancun
• NAMA Registry
agreed
• „NAMAs aim at
achieving
deviation from
business as
usual“
COP 17
Durban
• Guidelines for
Biennial Update
Reporting
(including
NAMAs)
COP 19
Warsaw
• NAMA
Registry
operational

5. Key aspects of a NAMA
A NAMA is a voluntary intervention by a developing country
government:
> Which is in line with national and/or local development
priorities
> Which receives support from domestic and/or international
sources
> Which has effect on reducing GHG emissions either directly
or indirectly
> Which is measurable, reportable and verifiable ("MRVable")
to ensure transparency of the NAMA outcomes
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6. NAMA Types
> NAMAs can be:
– Strategies (e.g. renewable strategy – wind,
solar, tidal)
– Policies and Programmes (e.g. energy
efficiency standard, Feed-in tariff, energy efficient
lighting programme)
– Projects (e.g. Bus Rapid Transit lane)
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7. Differences of NAMAs to CDM
Element
NAMA
National Strategy
Policy
Programme
Project
CDM*
Type of activity
-
Funds flow
To government
To project developer
Carbon credits
No
Yes
Sustainable
development
benefits
Prerogative of host
Very important
(‘nationally appropriate’) country
*Clean Development Mechanism
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- Individual Project
- Aggregation of projects

8. Global NAMA action
> 87 NAMAs and 37 feasibility studies in 35 countries in the NAMA database
> Tracking of global NAMA activity
Source: www.nama-database.org
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9. State of play of NAMAs
> 40 submissions to the UNFCCC Registry: 36 supported; 4 unilateral
> NAMA Database contains 87 NAMAs and 37 studies from 35 countries
Not known
6
Submitted to registry
Not submitted to registry
Implementation
3
Proposal/ Planning
10
Concept
0
10
Source: www.nama-database.org
9
68
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20
30
40
50
60
70
80
Number of NAMAs

10. Regional distribution of NAMAs
NAMA
> Latin America most active region
Europe, 11%
Middle East
and Africa,
26%
– Followed by Africa
– Europe: Serbia submitted 12
NAMAs
Latin
America,
50%
Asia, 13%
> Broader regional spread than CDM
– Africa and Least Developed
countries notably larger share
CDM
Latin
America
Econo13%
mies in
Africa
2%
> Possible reasons
– NAMA emphasize sustainable
transition
1%
development
Asia
Pacific
84%
Source:
http://cdm.unfccc.int/Statistics/Public/CDMinsights/index.html,
accessed 15/01/2014
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– Flexibility in design

11. Sectoral distribution of NAMAs
NAMA
> Energy supply largest share (36%)
Waste
14%
Buildings
14%
Agriculture
2%
Industry
11%
Forestry
4%
Transport
19%
Energy
supply
36%
Source: Ecofys et al 2013
Industry
10%
CDM
Waste
11%
Forestry Transpo
0.6%
rt
0.35%
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> Broader sectoral coverage than in
CDM
– Esp. transport and buildings
notably more relevant
– Less stringent MRV
requirements
– Accounting for medium to long
Energy
Supply
75%
Source:
http://cdm.unfccc.int/Statistics/Public/CDMinsights/index.html,
accessed 15/01/2014
11
buildings
> Possible reasons
Building
s
1.3%
Agricult
ure
2.4%
– Followed by transport and
term emission reduction and
transformational change
possible

12. NAMA Finance
> New and additional funds agreed:
> US$30 bn as fast start finance for 2010 – 2012
> „Mobilize“ US$100bn per annum by 2020
> Establishment of Green Climate Fund (GCF)
> Few NAMAs in implementation
> Finance still mainly focussing on readiness activities
> Only one dedicated NAMA implementation fund: NAMA Facility of
UK and Germany
> Need to provide finance to build confidence
> Public finance likley to be limited
> Important role of the private sector
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13. Outline
Introduction to NAMAs
Case Study – Chile Self-supply Renewable Energy
Q&A
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14. Mitigation Momentum
> Support to the Chilean
government through the
Mitigation Momentum project
– Funded by the German
International Climate
Initiative
– Partnership with Energy
Reserach Centre of the
Netherlands (ECN)
> Counterpart in Chile
– Ministry of Environment
– Ministry of Energy
– Centre for Renewable Energy (CER)
> Local partner Fundacion Chile
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www.mitigationmomentum.org

15. Energy context Chile
> Between 2012 and 2020, electricity
consumption is projected to
increase at a rate around 5.9%
> By 2020 ca. 8000 MW of new
generation capacity will be needed
to satisfy demand
> Chile relies heavily on hydropower
and has almost no indigenous fossil
energy resources.
:
Source: Minsiterio de Energia Chile/ CER
> Recent droughts and environmental challenges have limited the
development of hydro projects. There is continued concern over access
to competitively priced gas supplies.
> As a result, around half of new capacity under construction is coal
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16. Energy Strategy Chile
> Strong emphasis on nonconventional renewable energy
(NRCE) in Chile’s National Energy
Strategy
> Law 20.257 sets a target of 10%
NRCE by 2024
> New institutions to boost NCRE – the
Renewable Energy Centre (CER)
Source: Gobierno de Chile, Ministerio de Energia, 2012
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:

17. Objective of the NAMA
Promote the incorporation of renewable energy systems for selfsupply. All non-conventional renewable energy projects qualify as
long as 50% of the generated energy is consumed onsite.
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18. Barriers – Renewable energy
Financial
• Payback periods of RE vs. core business
investments in the sector
• Banking institutions not accustomed to small-scale
RE project finance
• Unwillingness to invest in pre-feasibility studies
when outcomes are uncertain
Capacity
• Access to qualified installers and consulting
companies to deliver projects
• Access to qualilfied technicians to operate and
maintain equipment
Awareness
Regulatory
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• Lack of understanding of technologies and benefits
• Lack of trust
• Long and difficult process to gain approval for
injecting electricity to the grid
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19. NAMA Components
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20. Levelized cost of energy
> Aim is to lower the Levelized Cost of Energy below or near the retail
energy rate while maximizing the leverage of programme funds.
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21. Financial Component
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22. Example guarantee fund
NAMA Guarantee Fund
The guarantee
funds are granted
and set aside to
cover loan defaults.
Guarantee funds
are invested in a
low risk investment
like govt. treasuries
Funds from the
commercial
financial institution
and development
bank are used for
the actual loans
80%
$10 million
Portfolio loss allocation
Total contribution:
Non recoverable funds (losses):
Years to depletion:
Leverage on non-recoverable funds:
Leverage including recoverable funds
(worst case scenario):
CORFO+Int. development bank
0%
million
$50
2.00
Portfolio loss allocation
Total contribution:
Leverage
Commercial Financial Insitution
Portfolio loss allocation
Total contribution:
20%
$30
Project loans
Terms
Int. rate
Tenor
3.75%
15
years
Projected volume of loans
Total projected investments
22
-$6.40 million
23 years
15.63
10.00
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million
Share financing
20%
Equity
80%
Loans
Defaults
Exp.rate
10%
$80 million
$100 million

23. Impacts of the NAMA
> GHG emissions – Impacts depend on size of fund and leverage of financial instruments.
Theoretical potential as much as 1.7 million tonnes CO2/e per year
> Job creation – Distributed renewable energy projects will create jobs from installation,
ongoing operations and maintenance.
> Market creation – NAMA will enable more suppliers to establish in Chile, lowering costs
from cumulative learning effects, reduced regulatory costs and increased competition of
suppliers.
> Mitigation capacity – The mitigation capacity of Chile will increase as the RE market
expands, financing institutions gain experience with RE project finance and high-skilled
workers develop critical skills.
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24. Outlook
> Chile NAMA is one of five successful NAMAs under the NAMA
Facility call in 2013
– Chile: Self-supply Renewable Energy
– Costa Rica: Low Carbon Coffee NAMA
– Mexico: NAMA for Sustainable New Housing
– Colombia: Transit-oriented Development
– Indonesia: Sustainable Urban Transport Program Indonesia
Source: nama-facility.org
> British German NAMA Facility is first dedicated fund for NAMA
implementation
> Implementation expected to begin in 2014
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25. What made the NAMA a success?
> Strong government owernship and support
> In line with national strategy and priorities
> Stakeholder based approach to NAMA design
> In depth review of key barriers to mitigation – investment in
renewable energy applications
– Mix of interventions to address barriers
> Early engagement with finance sector
– Detailed design of finance mechanism
> Concrete, realistic, implementable
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26. Outline
Background on NAMAs
Case Study - Chile
Q&A
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27. Thank you!
Ecofys Germany GmbH
International Climate Policies
Am Karlsbad 11
10785 Berlin
Germany
Frauke Röser
T: +49 (0)30 29773579-32
M: +49 (0)172 200 4129
E: f.roeser@ecofys.com
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28. Financing of NAMAs
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29. MRV of Self-supply renewable energy NAMA in Chile
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