Client: A leading London-based international private equity firm with a presence in Europe, Asia and North America

The client was interested in purchasing equity stake in a large Asian infrastructure group that is developing some large-scale hydro and coal power projects. EVI provided expert due diligence on environmental issues and climate change risk to accurately assess project risk and valuation.

EVI‘s assessment evaluated:

• The environmental aspects of the projects
• The impact of existing and future climate change regulations
• Carbon credit generation potential
• The suitability of carbon pricing in the valuation model

Carbon Market Survey

Without a binding international climate change mitigation treaty beyond 2012, the post-2012 carbon market is subject to speculation. The uncertainty of a post-2012 market for Certified Emissions Reductions (CERs) means that project developers are concerned about the outcome of upcoming international discussions.

Recently the EVI Research Group (ERG) conducted a research to understand what the expectations and the level of awareness regarding market risk and hedging strategies are amongst Indian CDM project developers’. The study showed:

• Cautious optimism among developers, with about 32% of respondents showing high confidence that the CERs will have market value post-2012;
• Moderate price expectations and increasing preference for forward contracts.