2016 Request for Project Proposals

Attendees from The Trust:

• Liz Hardee, Primary point of contact on RFP

• Peter Weisberg, Senior Investment Manager

• Mik McKee, Senior Analyst Forestry

• Sheldon Zakreski, Director of Risk Management

• Dick Kempka, Chief Commercial Officer

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AGENDA

• Timeline

• Who we are

• Our offer

• What we’re looking for

• How to apply

• What to expect

• Q&A2

Basic RFP TimelineJanuary 25: Request for proposals opensFebruary 26: Project proposals dueMarch 25: Initial screen complete and notifications provided to project ownersApril 15: Second information request due to The Climate TrustJune 16: Cutoff date for execution of term sheetsJune 24: Third information request due to The Climate TrustAug 19: Projects notified of intent to pursue approval for contract negotiationSept 9: Projects notified of approval statusSept 23: Latest date The Climate Trust will provide a draft contract to projectsDecember 16: Latest date contracts will be executed

Please note: This represents the longest possible timeline. Projects can and sometimes do move through our process at a more accelerated rate.

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Who we are

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The Climate Trust• Nonprofit organization

based in Portland, OR• Have committed $31.6

million to offset projects since 1997

• Climate impact of 2.9 million tons of CO2 reduced so far, with another 5.3 million tons under contract

• Invest in land-based offset projects in Forestry, Grasslands Conservation and Livestock Anaerobic Digesters

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Our offer

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Our offer: Upfront financing to early stage projects

Investment• The Climate Trust invests in a ten year stream of

carbon offsets from a project.• Capital is made available upfront for new projects.

Active managemen

t

• The Climate Trust will work with a project to develop a carbon monitoring plan and commercialize credits.

Revenue share

• After carbon sales have repaid the principal investment, 50% of future carbon revenues are paid to the project and 50% are paid to The Climate Trust and its investors.

Benefits:• Guaranteed minimum

carbon value• Revenue share

rewards project owners as carbon prices increase

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Example: Improved Forest Management project

100,000* $5.50

= $550,000

Credits available from the project over ten years (10,000 credits per year *10)One half of current market price of carbon in CA ($11.00 used as an example)Total size of upfront investment from The Climate Trust

Pre-credit sale:

Post-credit sale:$12.00

* 100,000=$1,200,000

Sale price of credits (Example)Total credits to be soldTotal income from project

$1,200,000-$550,000

= $650,000

Total incomeUpfront investmentNet income

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50/50 split gives $325,000 to project owner

Our offer: Upfront financing to early stage projects Available funds: We will deploy $5.5M in 2016, with the potential of an additional $10M in 2017 and 2018. Each project will receive between $250K-$2M ($1M max for Grassland Conservation).

Financing can be used for: Expenses related to project implementation such as land purchase, easement payments, and the installation of necessary technology.

Financing is not intended for: Business operational expenses or overhead, policy work, research projects, protocol development, permitting costs.

Scaling up: This $5.5M fund is a pilot; success unlocks additional funding

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What we’re looking for

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General requirements

US-based. We are not seeking applications from international projects at this time

Sectors. We welcome applications from those who have experience in the following project types: Improved Forest Management, Avoided Conversion Forestry, Grassland Conservation, and Livestock Anaerobic Digesters.

Quality. Projects that adhere (or can adhere) to the standards of the California Air Resources Board will be prioritized. Projects that can adhere to one of the following standards will also be considered on a case by case basis:

American Carbon RegistryClimate Action ReserveVerified Carbon Standard

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General requirements

Investment. Each contracted project will receive a minimum investment of $250,000. Individual projects may not be awarded more than $2 million, and individual grasslands projects will not be awarded more than $1 million.

EQIP eligible landowners are encouraged to apply.

Note: The Climate Trust will perform an analysis of eligibility under the standards, as well as an estimate of credit volumes.

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What makes a good livestock digester project:

Livestock digesters:• Size: Should receive manure from at least 1,000 cows or 17,000 pigs• Attractive projects will have completed a feasibility assessment and long-term contracts (like a

power purchase agreement and a manure supply agreement)• (Projects must demonstrate they will be prepared to reach commercial operation before the

end of 2017)• Must be eligible to generate credit under California’s compliance offset protocol for livestock

• (Projects cannot also be selling Low Carbon Fuel Standard credits)

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What makes a good forestry project:

Avoided Conversion: Can use carbon finance to prevent conversion of forestland to agricultural, residential, industrial or mining use.

• Size: generally 1,000 acres or greater to meet our minimum threshold of 100K offsets over 10 years.

• Anticipated alternative use must be 180% greater than current value as forested land (must be proven through professional appraisal).

• A qualified conservation easement is required.

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What makes a good forestry project:

Improved Forest Management: Can use carbon finance to implement practice change that will result in increased carbon sequestration (reduced harvest, longer rotations, changing harvest technique, etc.)

• Size: Generally 5,000 acres or greater to meet minimum threshold of 100K offsets over 10 years, but very well stocked sites with less than 5,000 acres could potentially qualify.

• Must promote native species and multiple age classes across project area.• Must demonstrate sustainable management practices though either certification (SFI, FSC, ATF)

or have a state or federally monitored sustainable management plan.

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What makes a good grassland conservation project:

Grassland conservation: prevents the conversion of intact grasslands to crop production

• Project owners can assume their project will generate 0.5 – 2.0 credits per acre per year, so 5,000 acres or larger is our target size

• Eligible projects must prove the land has been grassland for 10 years or more (in some cases 30 years)

• Must demonstrate financial pressure to convert (crop land premiums higher than grassland), and that land is suitable for conversion (Land Capability Class I-IV).

• Must be willing to record a qualified conservation easement on the project area

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How to apply

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Apply for Conservation Finance

climatetrust.org

Intent: Collect basic details on the project without the need for documentation

What you’ll need:Project type, location, and descriptive detail (narrative guided by form)

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What to expect

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Information Requests:First request/Application:HOW: Through Apply for Finance page. WHEN: Due Date February 26WHAT: Basic details including type, location, contact info. WHY: Allows us to determine basic feasibility.

Second request: HOW: EmailWHEN: After initial feasibility determination (no later than March 25WHAT: Additional details like ownership documentation, management records, forest inventory data, digester financing structures, geospatial data.WHY: Allows us to determine an anticipated credit volume and prepare to negotiate project terms.

Third request:HOW: EmailWHEN: After term sheet execution (no later than June 16)WHAT: Information about your organization (experience, company structure, financials).WHY: Allows us to recommend your project to progress to contract negotiations.

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Communications:

• Process from application to contracting typically takes 5-11 months• Projects not selected will be notified by email by March 25, 2016• Project evaluation is an organic process, but you can expect to hear from us frequently

throughout

Important cutoff dates:January 25: Request for proposals opensFebruary 26: Project proposals dueMarch 25: Initial screen complete and notifications provided to project ownersApril 15: Second information request due to The Climate TrustJune 16: Cutoff date for execution of term sheetsJune 24: Third information request due to The Climate TrustAug 19: Projects notified of intent to pursue approval for contract negotiationSept 9: Projects notified of approval statusSept 23: Latest date The Climate Trust will provide a draft contract to projectsDecember 16: Latest date contracts will be executed21

Q&A

Contact us:

(503)238-1915 ext. 209ehardee@climatetrust.org

THANK YOU!