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Delivery risks assessment
CDM/JI projects posess various potential risks. For instance, there are possible risks of not being approved by CDM EB(Executive Board) as a CDM and of not being achieved the scheduled reductions due to technical factors. Most of credits purchasing contracts of large scale projects are for credits for years to come. This sort of contracts are called ‘Forward contract’ and it is not always true that expected volume of credits are transferred to the Buyer at the due date. When purchasing the credits from certain project, to purchase the contract volume of credits with certainty it is to necessary to assess the risks regarding the delivery of credits(Delivery risks) in an appropriate manner.
Natsource Japan provides the potential delivery risks assessment service of the specific project for the clients who are planning to purchase the credits from CDM/JI projects. By the project risks assessment, Natsource Japan contributes to support to formulate the credits purchase portfolio and to review the details of the contract to purchase the credits.
Process of assessment of delivery risk
First, customers provide us information on CDM/JI projects with Project Idea Note (PIN) or Project Design Document (PDD).
Through the information, we find risk factors which influence delivery of credit in the project. We divide these risks into 5 categories based on a contract of party, country risk etc. Then, we estimate possible delivery amount of credit through Risk Model (DRM) which we originally developed.
Finally, we issue an assessment report to the customer, including merit and demerit of the project, assessment about risk of delivery (contained risk assessment of each 5 categories), expectation of amount of the credit, some plans of risk reduction, basic advice when you consider about contracts of purchasing credit.
Further Services
Advisory of risk management/risk reduction
We suggest how to reduce risks from CDM/JI projects which customers are planning to invest or develop from.
We provide basic measures how to reduce/hedge risks through assessment report. But this report shows only one of the examples of various measures.
It' s necessary to contract this service besides assessment of delivery risk when you need consultation about risk hedge in details.
Advisory of the design of portfolio of credit purchase
We can provide our best portfolio when you consider investing/purchasing several projects.
- Selection of credit for strategic purchase
- Practical advice of portfolio management
- Survey of risks about emission trading
- Study of market/other risks
