european carbon fund ™

EUROPEANCARBONFUND™

The first carbon fund structured and managed by major financial institutions

www.europeancarbonfund.com

Managed by:

Carbon Market Asia - www.europeancarbonfund.com - Page 2

Co-promoteurs: CDC & Fort is Banque

Agenda

• ECF presentation

• Recent Carbon market evolutions

• Our Strategy for Asia

Carbon Market Asia - www.europeancarbonfund.com - Page 3

Co-promoteurs: CDC & Fort is Banque

ECF definition

• European Carbon Fund (ECF)

is a financial fund, designed

and operated by major EU

financial institutions, dedicated

to purchase Carbon Credits.

Carbon Market Asia - www.europeancarbonfund.com - Page 4

Co-promoteurs: CDC & Fort is Banque

ECF shareholders: large financial institutions – 142.7M€

Carbon Market Asia - www.europeancarbonfund.com - Page 5

Co-promoteurs: CDC & Fort is Banque

ECF manager: IXIS Environnment & Infrastructures

• IXIS Corporate & Investment Bank is Groupe Caisse d’Epargne’s corporate and investment banking arm and a leading player on capital markets. French saving Banks are France 3rd bank.

• IXIS CIB is present worldwide through its Paris headquarters, branches in Frankfurt, London and Tokyo, and subsidiaries in New York and Hong Kong.

• S&P AA

Carbon Market Asia - www.europeancarbonfund.com - Page 6

Co-promoteurs: CDC & Fort is Banque

EU Carbon Market: VOLATILITY!

Carbon Market Asia - www.europeancarbonfund.com - Page 7

Co-promoteurs: CDC & Fort is Banque

2006 Transactions (6 months): Approx.10Mt CO2 purchased

250,000 ERUs

Biomass - Lituania

Jan 06

1,210,000 CERs

N2O - Brazil

Feb 06

1,210,000 CERs

N2O - Korea

Feb 06

3,600,000 CERs

Landfill - Argentina

Mar 06

540,000 CERs

Wind - China

May 06

2,500,000 CERs

Swine - Brazil

Jun 06

17,800,000 CERs

CMM - China

Nov 06

1,080,000 CERs

Straw - China

Oct 06

Carbon Market Asia - www.europeancarbonfund.com - Page 8

Co-promoteurs: CDC & Fort is Banque

ECF purchasing strategy

• Today, China is under-represented in our portfolio

• ECF will invest 80-150M€ in Carbon Assets in China in the next 2 years

• Volumes contracted: 100,000t/y to 5,000,000t/y

• Portfolio approach: diversification of technology and counterparty

• Strong sustainable development criteria expected

Carbon Market Asia - www.europeancarbonfund.com - Page 9

Co-promoteurs: CDC & Fort is Banque

From a carbon seller perspective:risks

• Risks of selling carbon

– Volatility of prices

– Contractual clauses (penalties, event of default…)

– Lack of experience, generally first deal

– Sometimes unreliable counterparties

Carbon Market Asia - www.europeancarbonfund.com - Page 10

Co-promoteurs: CDC & Fort is Banque

From a carbon seller perspective: rewards

• Carbon credits can enhance the profitability of environmental-friendly projects in Asia

• Need to find a reliable partner…

• … that can harness or mitigate:

– Regulatory risk

– Counterparty risk

– Delivery risk

– Market risk

Carbon Market Asia - www.europeancarbonfund.com - Page 11

Co-promoteurs: CDC & Fort is Banque

Conclusion

• ECF has closed 4 deal in China, and has a robust pipeline of projects to be concluded in the coming months

• ECF is a reliable partner for purchasing the carbon credits

• ECF has been created by leading EU financial institutions to absorb risks within a portfolio strategy

• ECF buys CER, whatever the market conditions

EUROPEANCARBONFUND™

The first carbon fund structured and managed by major financial institutions

www.europeancarbonfund.com

Managed by:

LI Chaochina@europeancarbonfund.com