Loans are generally covering costs for PDD development, validation, registration and verification. These costs vary from project to project and therefore there is no specific loan limit, as long as the estimated costs for the above are deemed reasonable.
In principle loans will cover the full amount for PDD development, validation, registration and verification. However, in some cases loans may be extended for only part of the costs – for instance in cases where costs are considered excessive.
No, the loans are interest free
Loans amounts are paid out in instalments directly to the CDM consultant. Instalments relate directly to milestones as follows (the percentages are approximate):
| Signing of loan agreement: | 10% of the loan amount |
| Validation Start: | 20% of the loan amount |
| Validation Completion: | 15% of the loan amount |
| CDM Project Submission: | 10% of the loan amount |
| Registration with the UNFCCC: | 20% of the loan amount |
| 1st issuance of CERs: | 25% of the loan amount |
5000 USD will be withheld as a deposit for the issuance of the loan document. The deposit will be repaid once the loan has been paid out in its entirety and the CDM process has been completed. In cases where
the process has not been completed, the deposit may or may not be returned depending on specific circumstances as described in the loan document.
Loans are supposed to be repaid no later than 12 months after the first issuance of CERs from the project. Loans are supposed to be repaid in full. However, in cases where CER issuance does not
generate sufficient income, loan repayment may succeed over a period up to a maximum of 36 months after the first issuance of CERs.
No. As the CDM consultant will be a Party to the loan agreement, no loans can be extended for CDM development without having identified a CDM consultant.
In principle no. In cases where project development comes to a halt due to non-performance of a consultant, the loan will be put on hold and the CDM Loan Team will initiate proceedings for replacing the loan agreement with a new agreement. Such cases will be dealt with individually and according to procedures contained in the loan agreement.
If the project is not registered and therefore does not generate any CER revenues, it will be evaluated if the project, if still implemented, generates sufficient revenues as a basis for repaying the loan despite non-registration. In such cases loans may be repaid over up to 60 months after non-registration has been realized.