E-bus Deployment Model for ERP
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On this page: E-Bus Deployment leveraging a New-Refurbish-Finance-Bulk-Fees model - Model 6 in the ERP Project Guidelines. Read more below, or visit Strategic Guidance for Country System Assessments, Guidance for Countries in Assessing ERC Projects, or Mobilizing ERC Finance.
Project Type: Energy efficiency (Transportation)
Sector: Transport
Applicable Project Methodology: VM0038 Methodology for Electric Vehicle Charging Systems
The objective of this project type is to implement an electric bus transport system as a means of reducing greenhouse gas (GHG) emissions in the transportation sector. The project proponent will replace the current fleet of internal combustion engine buses with new e-buses. This program will focus on introducing e-buses on existing bus lines thus replacing the usage of conventional diesel and natural gas buses. Additionally, a charging station service network can be established to facilitate the charging of these e-buses.
The project will be leveraging a New-Refurbish-Finance-Bulk-Fees model. To convert the current public utility buses to electric vehicle (EV) buses with the appropriate charging infrastructure leveraging both supported financing and subsidies from the party purchasing the emission reduction credits will require commercial coordination that may be best handled by a new private entity working closely with the municipal government or state-owned entity and relevant transport authorities. Given the potential for negative impacts to the business of bus operators, engaging an independent new entity, and a non-profit organization as is assumed in this model, to execute the project activities may enable better cooperation and buy-in from all parties involved. Table 1: Model Attributes Business New This model assumes that a new entity will be created to coordinate the procurement, deployment, maintenance, financing, and monitoring of the project Existing Construction Build The model involves the replacement of existing public utility buses with their EV counterparts, as well as the installation of charging ports to service them Refurbish Private Funding Finance The project company will be supporting the bus operators involved in securing financing for the non-subsidized portion of the EV bus purchase price, while financing for the installation of the charging ports and the subsidies will be the obligation of said new entity Service Bulk The project company will be collecting payments from the government or state-owned entity for the service of replacing the current lighting User Revenues Fees Revenues in this model will originate from the pre-agreed payments of the municipality to the private company for the service of replacing the current lighting Tariffs Proposed risk allocation of the Public Private Partnership Model Key features of PPP structure Expected ERC end use Key considerations/risks for proposed project Figure 1: Financing and Activity Flows for the Model Project description The program aims to introduce electric vehicles for privately-owned public transport in Thailand’s capital Bangkok to reduce GHG emissions on a broader scale. Energy Absolute will enter into agreements with privately-owned operators of scheduled bus routes in the Bangkok Metropolitan Region with the objective to replace 100% of the existing internal combustion engine bus fleets. A charging station service network for these e-buses will be implemented. The program will replace the use of 500 conventional (diesel & natural gas) buses with e-buses on a substantial number of existing and new privately operated bus lines that provide a regular, scheduled service. The daily bus ridership in Bangkok serves up to 800,000 to 900,000 passengers. Targeted results Expected ERCs from the program will be a minimum of 500,000 tonnes. The climate protection measure will contribute significantly to improving the air in the capital is expected to pioneer the electrification of Thailand’s mobility sector. Figure 2: Structure of Case Study PPP Thailand and Switzerland signed a cooperation agreement on climate action under Article 6 of the Paris Agreement on 24 June 2022. This bilateral agreement regulates the cooperation between the two countries and establishes the legal framework for the implementation of climate protection activities by the KliK Foundation. The internationally transferred mitigation outcomes (ITMOs) achieved with KliK Foundation’s financial support are transferred in accordance with the bilateral agreement and used to meet Switzerland's emission reduction target under the Paris Agreement. The cooperation agreement ensures that the ITMOs, in addition to Thailand’s unconditional nationally-determined contributions (NDCs), meet the highest standards of quality, environmental integrity, sustainable development goals (SDGs) and human rights. To avoid double counting, Thailand commits to increase its emissions balance by the amount of ITMOs transferred to Switzerland. Cooperation under the bilateral agreement leads to investments in climate mitigation technologies. The goal is to foster more efficient and more innovative businesses as well as more modern and cleaner technologies in Thailand. Until 2030, the KliK Foundation expects to support climate mitigation technologies in Thailand with $100 million (M)1. The experience to be gained from this KliK-supported Mitigation Activity will provide valuable insights on digitalized MRV systems for carbon programs and support infrastructure creation. In doing so, it will support greater NDC mitigation ambition for Thailand. Carbon finance by the KliK Foundation from the purchase of around 500,000 tonnes of ITMOs until 2030 shall be used to level total cost of ownership differential between baseline buses and the program e-buses. Assuming a similar project context of replacing 500 diesel-powered buses with E-buses, the project’s Net Present Value (NPV) only considering non-ERC inflows through other revenue streams or cost savings enabled by the project – is negative at $ 11 M. With ERC cashflows, total project finances improves to have a positive NPV of $ 2M. Generating ERCs is crucial in this type of project as it enables it to generate a positive cash flow in the long term. These projects may also find it difficult to be executed due to typically high upfront capital requirements (e.g., replacement of total bus fleet). ERCs can be effective in establishing market attractiveness for investors looking to finance green projects as well as obtain ERCs. Table 2: Summary of sources of inflows and outflows and key assumptions ERC revenues or inflows Based on assumption that unique project obtains price premium Non-ERC revenues or inflows Press search Project investment and implementation cost Press search ERC generation Verra Fee Schedule Table 3: Net cashflows summary (in USD) ERC Component Revenues/Inflows 5,000,000 21,000,000 26,000,000 Costs/Outflows 0 -110,000 -110,000 Net value 5,000,000 20,890,000 25,890,000 Primary/Non-ERC Component Revenues/Inflows 91,450,000 1,264,360 92,714,360 Costs/Outflows -107,725,000 -1,090,000 -108,815,000 Net value -16,275,000 174,360 -16,100,640 Total Net Value NPV $2,160,817 NPV (ERC Component) $13,152,067 NPV (Non-ERC Component) -$11,041,990 Footnote 1: All prices are expressed in United States Dollars (USD)Proposed Structure of this Public Private Partnership (PPP) Model
Dimension
Attribute
Description
Case study: Bangkok E-Bus Program, Thailand
Summary of the model financials
Value component
Assumptions
Sources
Components
Sum of initial outlays
Sum of in- or outflows from crediting period
Total cashflow
This section is intended to be a living document and will be reviewed at regular intervals. The Guidelines have not been prepared with any specific transaction in mind and are meant to serve only as general guidance. It is therefore critical that the Guidelines be reviewed and adapted for specific transactions. Unless expressly stated otherwise, the findings, interpretations, and conclusions expressed in the Materials in this Site are those of the various authors of the Materials and are not necessarily those of The World Bank Group, its member institutions, or their respective Boards of Executive Directors or member countries. For feedback on the content of this section of the website or suggestions for links or materials that could be included, please contact the Public-Private Partnership Resource Center at ppp@worldbank.org.
TABLE OF CONTENTS
UNLOCKING GLOBAL EMISSION REDUCTION CREDIT
Guidance for Countries in Assessing ERC Projects
1. Introduction to Emission Reduction Credits
• The World Bank's Emission Reduction Program
•Classification of Emissions Reduction Credit
• Policy Context of Emissions Reduction Credit
2. Objective of the Guidance for Countries in Assessing ERC Projects
• Objective of Project Preparation Guidelines
• Introduction to the Project Assessment Framework
• Process to Conducting Assessments
• S1: Green Economy Priorities
• S3: Article 6 Readiness and Eligibility
4. Conducting the Initial Profiling and Making a Preliminary Decision
• F2: Additional Value Enabled by Project
• C1, C2, and C3: Carbon Integrity and Environmental and Social Risk Management
5. Conducting the Project Assessment and Making the Final Decision
• F1: Project ERC value and F2: Additional Value Enabled by Project
• Q2: Marketing, Sales, and Pricing
• Q3: Project Governance and Structure
• C2: Environmental Risk Management
• C3: Social Risk Management and Benefits
6. Further Guidance for Application
• Country Context-driven Factors
• Considerations for Future Scope
Abbreviations: Guidance for Countries in Assessing ERC Projects
• B: Project Assessment Template
- Model 1: MRT Energy Efficiencies Model for ERP
- Model 2: Rural Electrification Model for ERP
- Model 4: Rooftop Solar Installation Model for ERP
- Model 5: LED Streetlight Deployment Model for ERP - for Specific Technologies
- Model 6: E-bus Deployment Model for ERP
- Model 7: EV Charging Systems Installation Model for ERP
- Model 8: Biodigesters Deployment Model for ERP
- Model 9: Waste-to-Power Model for ERP
- Model 10: Waste Treatment Facility Model for ERP
- Model 11: Climate Smart Farming Deployment Model for ERP
Related Content
Additional Resources
Climate-Smart PPPs
Finance Structures for PPP
Type of ResourceFinancing and Risk Mitigation