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Due Diligence and Feasibility Assessment
It is crucial to know the value and risks of a carbon asset given the complexity of carbon markets. Identifying and assessing carbon project and credits, often traded on a forward basis, allows projects investors to realize the full projected value of carbon assets in the future. Climate Focus specializes in providing due diligence services for carbon credit buyers and project developers. For buyers, Climate Focus’s evaluations help our clients move beyond project documentation and assess a range of realistic estimates of possible outcomes informed by years of project-level experience. For project developers, our due diligence services offer insights into a full range of project risks and options to mitigate these before seeking investors. This standard assessment can be tailored to the specific needs of clients and can be adapted to comprise either a quick initial assessment or a full-fledged due diligence.
Our due diligence identifies and analyzes the range of risks associated with carbon credit projects that can affect their ability to generate credits. These services include:
- Assessing host country risks (legal and political risks)
- Evaluating counterparty risks (experience, capacity, reputation, financial standing, contract management, and ownership structure)
- Testing project risks (feasibility, implementation, permits, legal structure)
- Estimate carbon credit yields (registration, additionality, methodology, carbon credit estimates, carbon credit ownership)
- Assess carbon credit generation and delivery risks
Besides individual project assessments, Climate Focus also offers assessment of portfolios and the performance of a carbon market company as a whole.
Our recent assignments include:
- Assessment and technical evaluation of a 140 projects strong CDM portfolio for M&A transaction purposes. Most projects were located in China.
- Design and implementation of Endesa’s carbon credit procurement program including project identification, due diligence, and carbon credit contract negotiation
- Development and implementation of the Climate Cent Sustainable Development Portfolio of small scale projects with high sustainable development benefits
- Assistance with project identification, due diligence and contract negotiation for both primary and secondary transactions under DONG Energy’s carbon procurement program.
- Project and legal due diligence of more than 30 projects on four continents
- Selected provider of initial risk assessments to support early price decision making on CDM and JI projects for the Asian Development Bank