What types of financing are there?
The process of developing a CDM project is elaborated on in the CDM Project Cycle, which covers the stages from Project Idea through to Development, Approvals, Validation, Registration, issuance of CERs, and ongoing monitoring protocols. At various stages in the process, and given the right conditions, a project owner may secure investment in the underlying project, or a reliable source of revenue through the forward sale of CERs in agreements with Annex 1 (and some non Annex 1) parties. Agreements may combine many kinds of financing, including: • Debt – loans can be arranged with terms and conditions to reflect prevailing project finance interest rates, possibly at a preferential rate if an option to purchase certified emissions reductions (CERs) resulting from the project is included • Equity – equity stakes can be agreed whereby the investor receives revenue from the proceeds of the project, including certified emissions reductions (CER) revenues or the CERs themselves. An option to
