Project Idea Note. Arq. Rafael Detoni Moraes Especial Assessor Urban Mobility SECRETARY OF WORLD CUP IN CUIABÁ SECOPA - CUIABA

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1 Project Idea Note Ob: This document has a guidance objective to SECOPA (VLT PROJECT CUIABÁ), covering its Carbon credits generation potential. All estimates within this document are preliminary, and do not ensure the right of effectively obtaining the credits, which are subject of verification from third parts in order to assure its environmental adequacy and licensing, as well as an accounting of its emissions and leakage, resulting on the reduction of emissions from anthropogenic activities according with a MRV system. Project Name: VLT CUIABÁ Submission date: 01/MAY/2012 A. Project description, type, location and schedule General Description Project Description including main activities Replacement of bus mass transportation by electric VLT modal at Cuiabá and Várzea Grande municipalities. The Project has three terminals and 2 tracks: Aeroporto CPA and Centro Coxipó, in a total of 22,2 km of distance. Average 222,000 persons are expected to be attended on a daily basis. The project measures its impacts by using the AMS-IIIc methodology for emissions reduction by electric vehicles. Monitoring is to be done by measuring number of electric vehicles operating, electricity consumption / km and annual average distance once project is implemented. For the estimates at this document the emission factors from bus emissions in Brazil was determined by using IPEA 2011 report for main Brazilian capitals and the emission factor of electricity in Cuiabá by Technology used Replacement of diesel bus transportation by electric vehicles Vehicle Light on Tracks - VLT Proponent Submiting PIN Name Arq. Rafael Detoni Moraes Especial Assessor Urban Mobility SECRETARY OF WORLD CUP IN CUIABÁ Organization Category SECOPA - CUIABA Mato Grosso State Secretary / Governmental Other roles of Project developer within the Project activities Relevant experience resume Operational / technical assistance Project developer intends to use PIN to promote voluntary market sells of carbon credits. Therefore demands from certification bodies might influence operational activities, and the project developer is directly responsible for field implementation of project activities. Project developer also provides technical assistance from sub-contracting local consultants to implement and monitoring over the years. SECOPA is the main responsible for organizing the world cup in the city of Cuibá, and it is already executing Arena Cuiaba construction and many other associated infrastructure developments

2 Address Ginásio Poliesportivo Prof. Aecim Tocantins Av. Agrícola Paes de Barros, s/n - Bairro Verdão CEP Cuiabá/MT Person to Contact Ar Rafael Detoni Moraes Tel / fax 65- rafaelmoraes@secopa.mt.gov.br and website Project supporters financing Project activities (List names and supply below information to all supporters) Name FIFA Organization category Address (including internet) Main activities Finance resume Word Football organization Non applicable Project Type GHG CO 2 Type of Activities Activity field (Select code from Project category s list) Project location Country Closest municipality Precise location Expected schedule Latest date of Project start (year when the Project becomes operational) Time expected to become operational after having the PIN approved First year of credits deliverance Time of Project duration (years) Actual status or project phase Actual status of acceptance by host country Host country position regarding Emissions Reduction (Carbon) Emission Reduction by Eletric Vehicle Brazil Cuiaba and Varzea Grande Airport CPA and Coxipó Center Project activities are to start in 2013, after the project is concluded. SECOPA has been actively working since Operation of VLT is schedule for Time necessary to financial compromising: 1 year Time necessary to environmental adequacy and licensing: 1 year Time necessary to resume negotiations: 6 months Time necessary to Implementation: 1-2 years tco2eq tco2eq 7 years (21 years) Preliminary study of potential finalized Brazilian legislation on the World FIFA Cup has already been approved at the Brazilian National Congress and the country has the National Policy of Climate Change and the National Plan for Climate Change, both from the Federal Government Host country 1

3 Kyoto Protocol and other international agreements a. Signed and ratified Copenhagen Agreement and Kyoto Protocol b. Brazil has a National Policy and Plan for Climate Change and Law proposals regarding ecosystem services remuneration, including carbon credits 2

4 B. Expected Sócio-Economic Benefits Estimates of sequestred and conserved Carbon (in tco2eq tables annexed when available.) Baseline Scenario (how would the future be without the project proposal? What would be the total ammount of carbon sequestred / conserved without the Project proposal? Mention the baseline methodology, when known) Until and including 2015: tco 2 e Until a period of 7 years: tco 2 e Until a period of 14 years: tco 2 e Until a period of 21 years: tco 2 e Project baseline is based on the maintenance of mass bus transportation system, which is what has been done not only in Cuiabá, but also in other Brazilian cities with more population, like Curitiba, or Belo Horizonte and others. If no incentive comes from environmental considerations the tendency keeps on having more and more diesel buses within the cities. Increase on the number of passengers and buses are increasing over time. Without the project the use of diesel fossil fuel and the increasing traffic would be the reality. The baseline methodology was keeping using buses, like stated at AMS-IIIc methodology for emissions reduction by electric vehicles. Existing vegetatin and land uses (what is the current land use and the land use at areas to be included at Project? Is the Forest cover above or below 30%) Today, the project has the following characteristic: Specific environmental outcomes (benefits) Local benefits Global benefits Sócio-economic aspects (which social and economical effects can be attributed to the Project and which wouldn t have occurred in a similar situation without the Project?) Today s fuel consumption is based on diesel with the biodiesel content as specified by Brazilian regulations (b5). Reduction of emission and pollution from burning of fossil fuels at regular buses. Reduction of traffic jams by improving conditions for collective transport. Reduction of diseases related to chronic exposition to air pollutants from diesel engines Creation and generation of income and Green Jobs, for monitoring carbon reduction Less pollution and GHG within the cities, jobs for managing and operating the VLT system Creation of income and Green Jobs Contributing to reducing CO2 emissions from transportation Without Project activity the air at the city would be getting worse every year and that would also end up by compromising water basin reducing water availability and quality, beside unplanned changes at local scenery. With the introduction of modern VLT systems the project contributes for rehabilitating the air quality, reduces pressures over water quality, helps to produce city landscape planning, generates jobs and incomes and improves regional microclimate. All jobs and income generated with the project wouldn t occur if it was no implemented. 3

5 Which are the direct effects? (f.ex, job creation, poverty reduction, export / import balance) The Project activities generate 150 direct Jobs to implement and maintain VLT systems and stations. With the increasing of the use another 150 direct jobs are also created together with circa of 600 indirect ones (services, stores etc). The project will also generate jobs and income from Carbon monitoring and estimates, besides assuring job places for other staff working at the project. With the Carbon remuneration, it is possible to assure the environmental quality of the region. With the Carbon estimates it is possible to transfer it to other production and services chains, increasing their competitiveness by adopting a CSR behavior, resulting on appreciation of its products and services. Which are the other effects? (f.ex., training / education associated to process, technologies and products or their effects at other sectors, duplication within the country and at the region) The project introduces modern VLT systems to cities as Cuiabá and Varzea Grande together with concepts of Payment for Ecosystem Services PES, for emissions reduction and maintenance of air quality. With this the project contributes to quality of life and a conceptual change for transportation, where it has to be of quality for the people inside and outside it. VLT is a modern, efficient and sustainable system for mass transportation within cities, and the practice can be extended to all cities in the country, with large benefits for the population and the environment. Consistency between Project and environmental strategies of host country Brazil has been present at international forum to advocate in favor of adequate conditions for recognition of global climate change mitigation. Brazil is the country with the largest compendium of environmental legislation, a statement of its compromise with sustainable use and conservation of national biodiversity. Brazil has a national climate change combating plan with chapters on energy and transportation. The current project is aligned with the above strategies and offers a new approach for urban transportation, with the contribution of supply quality ecosystem services to society. 4

6 C. Finance Project Costs Preparation costs R$ 40,000 (preliminary study and register) Establishment costs R$ 1,2 billio (tracks, terminals, vehicles etc) Other costs (explanation) R$ 300,000 (baseline and monitoring field implementation Permanent Parcels and field date collection) Total Project Costs R$ 1,2 billion Sources of Financing to be approached or already identified Partners (Name and R$) Federal government, FIFA Long term financing (Name and R$) Long term financing (Name and R$) Long term financing (R$) Forseen investor s contribution (R$) Sources of Carbon Finance (PNBSAE) Indicative price per tco2eq R$ 5-25 per tco2eq None R$ 10 / tco2eq Value of Reduced Emissions = price tco 2 eq X number of tco 2 e) R$ Until 2022 R$ For 14 years R$ For 7 years R$ For 21years R$ Financial Assessment IRR without Carbon: (Prove that property is feasible from the financial point of view) IRR with Carbon: Anexxes: 5