Final Validation Report_8MW Cirompang Mini Hydro Power Plant

8/10/2019 Final Validation Report_8MW Cirompang Mini Hydro Power Plant

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Validation Report 01 997 9105067713

I. Project description:

Project title:8MW Cirompang Mini Hydro Power Plantsat Bungbulang, Garut, Indonesia

Report No.: 01 997 9105067713

Host Country: IndonesiaCurrent revision No.: 02

Date of current revision: 2012-06-01Methodology: AMS-I.D version 17

Large Scale

Small Scale Date of first issue: 2012-02-10

Annual average emission reductions (estimate): 33,847 tCO2e/yr

GHG reducingmeasure/technology:

The project activity utilizes hydropower technology for grid-connected renewablepower generation

Party Project ParticipantsParty considered aproject participant

Contractparty

Indonesia (Host) PT Tirta Gemah Ripah (Public Entity) NoKingdom ofSweden

Nordic Environment Finance Corporation NEFCOin its capacity as Fund Manager to the NEFCOCarbon Fund (NeCF) (Private Entity)

No

II. Validation Team:

Validation Team RoleFull name Affiliation

TVRheinland

Appointed forSectoral Scopes

(Technical Areas)

Teamleade

r

ActingTeamLeader

LocalExpe

rt

TeamMem

ber(Auditor)

TechniclaE

xpert

ActingTec

h.

Expert

TraineeAu

ditor

TechnicalR

eviewer

ExperttoT

R

TraineeTR

Mr. Truong Le Tien Dung Vietnam 1 XMr. Ramaiyer Ramachandran Indonesia N/A XMs. Danae Diaz China 1 X

Validation Phases and Validation Status:Desk Review Follow up interviews Resolution of outstanding issues

Corrective Actions / Clarifications Requested Full Approval and Submission for Registration Rejected

III. Validation Report:

Final approval Released Distribution

Date: 200X-XX-XXBy: Mr. Praveen Urs

No distribution without permission from the Clientor responsible organizational unitUnrestricted distribution


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Executive Summary Validation Opinion

The validation team assigned by the DOE (TV Rheinland (China) Ltd.), here after called TRC, is beenassigned by PT Tirta Gemah Ripah to perform the validation of their project 8MW Cirompang Mini HydroPower Plants at Bungbulang, Garut, Indonesia. The validation was performed on the basis of UNFCCC criteriafor the Clean Development Mechanism. The scope of the validation is defined as an independent and objectivereview of the project design document, the projects baseline study and monitoring plan and other relevantdocuments. The information in these documents is reviewed against CDM Validation and Verification Manual(Version 01.2), Kyoto Protocol requirements, CDM Executive Board/UNFCCC rules.The report is based on the assessment of the project design document undertaken through stakeholderconsultations, application of standard auditing techniques including but not limited to document reviews, sitevisit, stakeholder interviews, review of the applicable methodology and its underlying formulae andcalculations.Validation methodology and processThe validation has been performed as described in the VVM version 01.2 and constitutes the following steps:- Publication of the PDD on the UNFCCC website (09th December 2011 to 07th January 2012)- Desk review of the PDD and the relevant documents

- On-site assessment (04th to 06th January 2012)- Issuance of Validation ReportValidation criteriaThe following CDM requirements have been considered:- Article 12 of the Kyoto Protocol,- Modalities and procedures for CDM (Marrakech Accords)- Subsequent decisions by the COP/MOP and CDM Executive Board- Host country criteria- Criteria given to provide for consistent project operations, monitoring and reporting.

The host part is Indonesia and the Annex I country is Kingdom of Sweden. Both parties fulfil the participationcriteria and have approved and authorized the project and the project participants. The DNA from Indonesia

confirms that the project assists in achieving sustainable development.

The project correctly applies the baseline and monitoring methodology AMS-I.D., version 17.0, Gridconnected renewable electricity generation.The project results in reductions of CO2 emissions that are real, measurable and give long-term benefits to themitigation of climate change. It is demonstrated that the project is not a likely baseline scenario. Emissionreductions attributable to the project are hence additional to any that would occur in the absence of the projectactivity.The validation did not reveal any information that indicates that the project can be seen as a diversion of ODAfunding towards Indonesia.

The monitoring plan provides for the monitoring of the projects emission reductions. The monitoring

arrangements described in the monitoring plan are feasible within the project design and it is TRCs opinion thatthe project participants are able to implement the monitoring plan.

By utilizing hydropower technology for grid-connected renewable power generation, the project activity willresult in reductions of greenhouse gas (GHG) emissions that are real, measurable and give long-term benefits tothe mitigation of climate change.The total emission reductions from the project are estimated to be 338,470 t of CO2e over a 10-year creditingperiod, averaging 33,847 t of CO2e annually. The emission reduction forecast has been checked and it isdeemed likely that the stated amount is achieved given the underlying assumptions do not alter.

The validation protocol describes a total of 25 findings which include:16 Corrective Action Requests (CARs);8 Clarification Requests (CLs);1 Forward Action Requests (FARs); and all findings have been closed satisfactorily.


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TRC concludes that the CDM Project Activity 8MW Cirompang Mini Hydro Power Plants at Bungbulang,Garut, Indonesia in Indonesia, as described in the PDD (version 2.1, dated 25 May 2012), meets all relevantrequirements of the UNFCCC for CDM project activities including article 12 of the Kyoto Protocol, themodalities and procedures for CDM (Marrakesh Accords) and the subsequent decisions by the COP/MOP andCDM Executive Board.The selected baseline and monitoring methodologies (AMS-I.D., Version 17) are applicable to the project and

correctly applied. The TRC therefore requests the registration of the project as a CDM project activity withUNFCCC.

Mr Truong Le Tien Dung (Team Leader) Mr. Praveen Nagaraje Urs (DOE Manager)(add signature)

TV Rheinland Vietnam Co. Ltd. TV Rheinland (China) Ltd.Ho Chi Minh City, 2012-XX-XX Beijing, 2012-XX-XX


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Abbreviations

ACM Approved Consolidated MethodologyAMS Approved Methodology for Small-scale CDM project activitiesBM Build MarginBOD Board of Directors

CAR Corrective Action RequestCDM Clean Development MechanismCDM EB CDM Executive BoardCEF Carbon Emission FactorCER Certified Emission ReductionCH4 MethaneCL Request for ClarificationCO2 Carbon DioxideCO2e Carbon Dioxide EquivalentDNA Designated National AuthorityDoE Department of EnvironmentDOE Designated Operational EntityDR Document ReviewEB Executive BoardEIA Environmental Impact AssessmentEPC Engineering, procerement and constructionER Emission ReductionERPA Emission Reduction Purchase AgreementFAR Forward Action RequestFSR Feasibility Study ReportGHG Greenhouse GasesGWP Global Warming PotentialI InterviewIDR Indonesian RupiahIETA International Emissions Trading Association

IPCC Intergovernmental Panel on Climate ChangeIRR Internal Rate of ReturnkWh kilo Watt hoursLoA Letter of ApprovalMCF Methane Correction FactorMoV Means of VerificationMP Monitoring PlanMW Mega WattMWh Mega Watt HoursNEFCO Nordic Environment Finance CorporationNeCF Nordic Environment Finance Corporation (NEFCO) in its capacity as Fund Manager to

the NEFCO Carbon FundN2O Nitrous oxide

NGO Non-Governmental OrganizationODA Official Development AssistanceOM Operating MarginPDD Project Design DocumentPLN Perusahaan Listrik Negara, an Indonesian government-owned corporation which has a

monopoly on electricity distribution in Indonesia.PPA Power Purchase AgreementQA/ QC Quality Assurance / Quality Controlt TonnetCO2e Tonnes of CO2 equivalentsTRC TV Rheinland (China) Ltd.UNFCCC United Nations Framework Convention on Climate Change


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TABLE OF CONTENTS

1 Introduction 71.1 Objective 71.2 Scope 7

2 Methodology 82.1 Desk Review of the Project Design Documentation 82.2 Follow-up Interviews with Project Stakeholders 102.3 Resolution of Outstanding Issues 122.4 Internal Quality Control 142.5 Validation Team 143 Validation Findings 143.1 Approval and Participation 143.2 Project Design Document 153.3 Project Description 153.4 Baseline and Monitoring Methodology 18

3.5 Additionality 293.6 Monitoring 503.7 Sustainable Development 523.8 Environmental Impacts 523.9 Local Stakeholder Consultation 533.10 Comments by Parties, Stakeholders and NGOs 53

Appendix A: Validation ProtocolAppendix B: Certificates of Competence


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1. Introduction:The organization PT Tirta Gemah Ripah has commissioned the DOE TV Rheinland (China) Ltd. to performa validation of the CDM Project Activity 8MW Cirompang Mini Hydro Power Plants at Bungbulang, Garut,Indonesia in Indonesia (hereafter called the project). This report summarises the findings of the validation ofthe project, performed on the basis of UNFCCC criteria for the CDM, as well as criteria given to provide forconsistent project operations, monitoring and reporting. The term UNFCCC criteria refers to Article 12 of theKyoto Protocol, the CDM modalities and procedures or the simplified modalities and procedures for small-scaleCDM project activities (as applicable) and the subsequent decisions by the CDM Executive Board.

1.1. ObjectiveThe purpose of a validation is to have an independent third party assess the project design. In particular, theproject's baseline, monitoring plan, and the projects compliance with relevant UNFCCC and host Party criteriaare validated in order to confirm that the project design, as documented, is sound and reasonable and meets theidentified criteria. Validation is a requirement for all CDM projects and is seen as necessary to provideassurance to stakeholders of the quality of the project and its intended generation of certified emissionreductions (CERs).

1.2. ScopeThe validation scope is defined as an independent and objective review of the project design document (PDD).

The PDD is reviewed against the relevant criteria (see above) and decisions by the CDM Executive Board,including the approved baseline and monitoring methodology. The validation team has, based on therecommendations in the Validation and Verification Manual employed (latest version) a risk-based approach,focusing on the identification of significant risks for project implementation and the generation of CERs.The validation is not meant to provide any consulting towards the project participants. However, stated requestsfor clarifications and/or corrective actions may have provided input for improvement of the project design.


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2. Methodology:The validation consists of the following three phases:I A desk review of the project design documentsII On-site visit and follow-up interviews with project stakeholdersIII The resolution of outstanding issues and the issuance of the final validation report and opinion.The following sections outline each step in more detail.

2.1Desk Review of the Project Design Documentation:

The following table outlines the documentation reviewed during the validation:No. Item (related to CDM and its consideration & project starting dates)/1/ PDD [for global stakeholder commenting] version 1.0, dated 25/10/2011/2/ PDD [final version], version 2.1, dated 25/05/2012

Letter of Approval issued by DNA of Indonesia./3/LoA from Annex 1 country

/4/ Signed Modalities of Communication.

/5/ Validation contract in between TUV Rheinland China Ltd. and the project participants

for this project activity./6/ Board decision to process the clearance for the 8 MW project activity, 23/06/2010/7/ First PPA signed with PLN (2MW), dated 28/06/2010/8/ Investment Approval from the Regent of Garut, dated 23/07/2010/9/ Recommendation letter for land use permit, dated 26/07/2010/10/ Recommendation letter document of Environmental Management Effort &

Environmental Monitoring Effort for Cirompang MHP 8 MW construction, dated02/09/2010

/11/ Feasibility Study Report/12/ Proof that FSR is prepared by qualified 3rd party institution - Third party letter/13/ Engineering Third party Profile (For FSR)/14/ Board resolution to undertake the project activity under CDM, 10/12/2010

/15/ CDM Advisory services agreement between PP and consultant, 02/03/2011/16/ Notification to the DNA of Indonesia dated 08/03/2011/17/ Notification to UNFCCC dated 09/03/2011/18/ Acknowledgement of Notification to UNFCCC dated 09/03/2011/19/ Attendance list & minute of stakeholder consultation meeting for the project activity on

15/04/2011/20/ Published advertisement regarding the project activity on daily newspaper Radar

Garut on 4 April 2011/21/ Stakeholder meeting presentation photos, dated 15/04/2011/22/ MoU for EPC contract, dated 08/03/2011/23/ Proof of starting date of CDM project activity. (04/08/2011)

EPC Contract

/24/ The Agreement between PT. TGR with GP3A Daerah Irigasi Cirompang (affiliation offarmers using Cirompang water) regarding the Use of Dams, Irrigation Channels, andTunnels for the Cirompang Mini Hydro Power Investment Project, dated 11/08/2011

/25/ Approval of power purchase by PLN, dated 06/07/2011/26/ PPA between PT. PLN (Persero) and PT. Tirta Gemah Ripah for Mini Hydro Power

Plant Total Capacity 8MW, dated 21/11/2011/27/ Tech Spec Guarantee Performance Turbine-Generator from Jyoti/28/ Key photo graphs of implementation of proposed project activityNo. Item (related to CDM financial)/29/ Declaration of no diversion of ODA (e.g. no public funding in the project activity), dated

19/03/2012/30/ Spread sheet (in *.xls format) for calculation of grid emission factor

/31/ Spread sheet (in *.xls format) for calculation of emission reductions/32/ Spread sheet (in *.xls format) for financial analysis/33/ Basis for the salvage value assumed/34/ Compensation record for Land Acquisition


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/35/ List of Land Acquisition for Cirompang MHPNo. Others/36/ First Electricity Business License for the Public Use, 15/06/2010/37/ Land Use Permit, dated 07/03/2011/38/ Business License (SIUP), dated 10/11/2009/39/ Revised Business Licence (ITU), dated 10/11/2009

/40/ The letter issued by the Department of Mining and Energy, Directorate General ofElectricity and Energy Development, dated 20/06/2011

/41/ Permen ESDM Nomor 31 2009 dated 13 November 2009, Government of Indonesiaregulating the tariff rate in Indonesia

/42/ Government Regulation No.17, Year 2000, Clausal No.17,Government Policy on income tax, year 2008

/43/ Water quality standard (PP. no 82 Year 2001 or West-Java Governor Decision no.38/1991)

/44/ Noise Standards (kepMenLH No Kep-48/MenLH/11/1996)/45/ Emission Factor published by DNA Indonesia/46/ IPCC Default Value/47/ Survey of CDM registered projects in Indonesia

/48/ Lending interest rate (%) Indonesia 2010

Background investigation and other referred documents/websites:

No. Reference Document/B1/ CDM Validation and Verification manual (Version 01.2), EB55/B2/ Tool for the demonstration and assessment of additionality, Version 06.0.0, EB65 Annex 21/B3/ INFORMATION NOTE ON THE IMPLEMENTATION OF E+/E- IN THE CONTEXT OF

PROJECTS ON THE AGENDA OF THE FIFTY-THIRD MEETING OF THE CDMEXECUTIVE BOARD, Version 01.1

/B4/ Glossary of CDM terms, Version 06/B5/ Attachment A of Appendix B of the Simplified Modalities and Procedures for small-scale

CDM project activities/B6/ Attachment B to Appendix B of the Simplified Modalities and Procedures for small-scale

CDM project activities/B7/ General Guidelines to SSC CDM methodologies, Version 17/B8/ Non-binding best practice examples to demonstrate additionality for SSC project activities,

EB35/B9/ GUIDELINES ON ASSESSMENT OF DEBUNDLING FOR SSC PROJECT ACTIVITIES

(Version 03)/B10/ CDM-SSC-PDD - Project Design Document form for Small-Scale project activities, Version

03http://cdm.unfccc.int/Reference/PDDs_Forms/PDDs/PDD_form02_v03.pdf

/B11/ GUIDELINES FOR COMPLETING THE SIMPLIFIED PROJECT DESIGN DOCUMENT(CDM-SSC-PDD) AND THE FORM FOR PROPOSED NEW SMALL SCALEMETHODOLOGIES (CDM-SSC-NM) (Version 05)http://cdm.unfccc.int/Reference/Guidclarif/pdd/PDD_guid02.pdf

/B12/ GUIDELINES ON THE ASSESSMENT OF INVESTMENT ANALYSIS (Version 05)/B13/ GUIDELINES ON THE DEMONSTRATION AND ASSESSMENT OF PRIOR

CONSIDERATION OF THE CDM (Version 04)/B14/ GUIDELINES FOR THE REPORTING AND VALIDATION OF PLANT LOAD FACTORS

(Version 01)/B15/ Simplified modalities and procedures for small-scale clean development mechanism project

activities/B16/ Web sites referred

www.ipcc.ch (for referring Emission factors)http://www.noccop.org.vn/ (for validating the Host Country Approval)http://www.evn.com.vn/ (for referring new renewable projects in Viet Nam)http://cdm.unfccc.int (for referring to applicable latest guidelines)


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/B17/ Approved small scale methodology AMS-I.D.: Grid connected renewable electricitygeneration, Version 17.0

/B18/ Tool to calculate project or leakage CO2 emissions from fossil fuel combustion, Version 02/B19/ Tool to calculate the emission factor for an electricity system, Version 02.2.1/B20/ Appendix C of the Simplified Modalities and Procedures for Small-Scale CDM project

activities

2.2. Follow-up Interviews with Project Stakeholders:

TV Rheinland validation team carried out an on-site visit dated from 2012-01-04 to 2012-01-05 andperformed interviews with the project representatives and stakeholders.

Date Name Organization Topic

/I01/ 2012-01-04

Mr. Ayatullah Mardiansyah(Business Development)

Ms. Pradeeth Tyagi (Senior

Consultant)

Ms. R. Sivasankari (Consultant)

Mr. Aprian E.R(Technical Division)

Mr. Yulianto(Project Director)

Mr, Agung S

(Expert)

Mr. Ir. Imam Rirvanto(C.E.O.)

EmergentVentures Int

PT Tirta GemahRipah

Confirmation of projectactivity and project title

Confirmation of project

participantsBoard of Directors

approvals

Project Funding

Project agreement

Modalities ofCommunications

LoAs

Organisation chart

Technology

BaselineAdditionality

Monitoring Plan

EIA Compliance

Quality Assurance

Project lifespan

Operating procedures/work instructions

Calibration and Training

Archiving of dataFinancial calculations

PDD

Calculation of gridemission factor andemission reductions

/I02/ 2012-01-05

Mr. Ayatullah Mardiansyah(Business Development)

Ms. R. Sivasankari (Consultant)

Mr. Sutomo

Mr. Agung S (Expert)

EmergentVentures Int

PT Tirta GemahRipah

Plant address

EIA Compliance

Stakeholder meeting

Land use permit

Technology

Baseline

Operating procedures


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Mr. Hendarwan

Mr. Aprian E. R. (TechnicalDivision)

Mr. Sobar

Mr. Andun D S

Mr. M. Warlud S

Mr. Indra W. Pasaribu

Mr. Asep Zaenal A.

Talang Sulaeman

Adang

Suparman (Community head)

Jaka

Solehudin

Umen

A Cang Rahmat

Fliri Randewo

Heruza W.

Yamin Maulud

Aas Ruhyan

Agus N

Haris Co. An

Hj. Uum S.

Henhen S

GP3A

P3A

RW 16

DSA

TokohMasyarakat

(Society Figure)

Karyawan(Employee )

PT HutamaKarya

Compensatedrepresentative

Ketua GP 3A

Koramil 21

Kapolsek(Police Chief)

Camat (Head ofSubdistrict)

Staf PPAT(Public Notary)

/work instructions


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2.3 Resolution of Outstanding Issues:

The objective of this phase of the validation is to resolve any outstanding issues which need be clarified prior toTV Rheinlands positive conclusion on the project design. In order to ensure transparency a validationprotocol is customised for the project. The protocol shows in transparent manner criteria (requirements), meansof verification and the results from validating the identified criteria. The validation protocol serves the followingpurposes:

It organises, details and clarifies the requirements a CDM project is expected to meet; It ensures a transparent validation process where the validator will document how a particular

requirement has been validated and the result of the validation.

The validation protocol consists of three tables. The different columns in these tables are described in the figurebelow. The completed validation protocol for this project is enclosed in Appendix A to this report.

Findings established during the validation can either be seen as a non-fulfilment of CDM criteria or where a risk

to the fulfilment of project objectives is identified. Corrective action requests (CAR) are issued, where: Mistakes have been made with a direct influence on project results; CDM and/or methodology specific requirements have not been met; or There is a risk that the project would not be accepted as a CDM project or that emission reductions will

not be certified.

A request for clarification (CL) may be used where additional information is needed to fully clarify an issue.

A forward action request (FAR) is raised during validation to highlight issues related to project implementationthat require review during the first verification of the project activity. FARs shall not relate to the CDMrequirements for registration.


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Validation Protocol Table 1: Validation requirementsChecklist Question Reference Means of

verification(MoV)

Comment Draft and/or FinalConclusion

The various UNFCCCrequirements asspecified in the VVMare linked to checklistquestions the projectshould meet. Thechecklist is organised indifferent sections,following the logic ofthe VVM.

Givesreference todocumentswhere theanswer tothe checklistquestion oritem isfound.

Explains howconformance withthe checklistquestion isinvestigated.Examples of meansof verification aredocument review(DR) or interview(I). N/A means notapplicable.

The section isused to elaborateand discuss thechecklist questionand/or theconformance tothe question. It isfurther used toexplain theconclusionsreached.

This is either acceptablebased on evidenceprovided (OK), or acorrective action request(CAR) due to non-compliance with thechecklist question (Seebelow). A request forclarification (CL) is usedwhen the validation teamhas identified a need forfurther clarification.

Validation Protocol Table 2: List of Requests for Corrective Action (CAR) and Clarification (CL)Draft report

clarifications andcorrective action

requests

Ref. to checklistquestion in table 2

Summary of projectowner response

Validation conclusion

If the conclusions fromthe draft Validation areeither a CAR or a CL,these should be listed inthis section.

Reference to thechecklist questionnumber in Table 2where the CAR or CLis explained.

The responses given bythe project participantsduring thecommunications withthe validation teamshould be summarised in

this section.

This section shouldsummarise the validationteams responses and finalconclusions. The conclusionsshould also be included inTable 2, under Final

Conclusion.

Table 3: List of forward action requests (FARs)

FAR number ReferenceSummary of project

owner responseValidation team conclusion

Forward action request(FAR) to be raised duringvalidation to highlightissues relatedto project implementationthat require review duringthe first verification of theproject activity. FARsshall not relate to theCDM requirements forregistration.

Reference to thechecklist questionnumber in Table 2where the CAR or CLis explained.

The responses given bythe project participantsduring thecommunications withthe validation teamshould be summarised inthis section.

This section shouldsummarise the validationteams responses and finalconclusions. The conclusionsshould also be included inTable 2, under FinalConclusion.

Figure 1. Validation protocol tables


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2.4 Internal Quality Control:The draft validation report including the initial validation findings underwent a technical review before beingsubmitted to the project participants. The final validation report underwent a technical review by a qualifiedindependent reviewer before requesting registration of the project activity. The technical review was performedby a technical reviewer qualified in accordance with TV Rheinlands qualification scheme for CDM validationand verification that meets the criteria of EB guidelines for qualification.

2.5 Validation Team:

Validation Team Type of InvolvementFull name Affiliation

TV RheinlandAppointed for Sectoral

Scopes (TechnicalAreas)

Supervisingthework

Deskreview

SiteVisit+Interview

Reportandprotocol

Writing

TechniclaExpertInput

ReportingSupport

TechnicalReviewer

Mr. Truong Le Tien Dung Vietnam 1 X X X X XMr. Ramaiyer Ramachandran Indonesia N/A XMs. Danae Diaz China 1 X X

3. Validation Findings:The findings of the validation are stated in the following sections. The validation criteria (requirements), themeans of verification and the results from validating the identified criteria are documented in more detail in thevalidation protocol in Appendix A.The final validation findings relate to the project design as documented and described in the revised andresubmitted project design documentation.

3.1 Approval and ParticipationAccording to the PDD, the project is a CDM project which involves two project participants: PT Tirta GemahRipah from the host party, Indonesia; and Nordic Environment Finance Corporation NEFCO in its capacity asFund Manager to the NEFCO Carbon Fund (NeCF) from Kingdom of Sweden (Annex I party).

PT Tirta Gemah Ripah (TGR) is a local investment based entity, which was established on 10th November 2009/38/, /39/. TGR is the project owner of the project activity. The host party, Indonesia meets all relevantparticipation requirements in CDM.

The Letter of Approval (LoA) issued by the DNA of Republic of Indonesia, i.e. Executive Chair of NationalCouncil on Climate Change as the Chairman of the National Committee on CDM of the Republic of Indonesia,for authorizing PT Tirta Gemah Ripah as voluntary project participants was validated and it confirms that theproject contributes to Indonesias sustainable development /3/.

The Letter of Approval (LoA) from the DNA of Kingdom of Sweden (Annex I party) is not yet received forconfirming the voluntary participation of RWE Power AG, represented by RWE Service GmbH.

The below table summarizes the project participants and parties involved. The authenticity of the letters ofapproval has been validated by TV Rheinland validation team.These LoA(s) are therefore regarded as valid and meeting the requirements.


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Project participants PT Tirta Gemah Ripah Nordic Environment FinanceCorporation NEFCO in its capacity

as Fund Manager to the NEFCOCarbon Fund (NeCF)

Parties involved Indonesia (Host Party) Kingdom of Sweden

(Annex I party)

APPROVAL The National Committee on CDMof the Republic of Indonesia

LoA received Yes No

Date of LoA 6 March 2012 To be determined

Reference to document B076/KNMPB/03/2012 To be determined

LoA received from The National Committee on CDM

of the Republic of Indonesia(Public Organization)

To be determined

Validation of authenticity Yes.

Confirmation of Letter Head andsignature of Executive Chair of

National Council on ClimateChange as the Chairman of the

National Committee on CDM of theRepublic of Indonesia

To be determined

Validity of LoA Yes To be determined

PARTICIPATION

Party is party to KyotoProtocol

Yes Yes

Voluntary participation Yes To be determined

Diversion of officialdevelopment aid towards hostcountry

No indication To be determined

Project contribution to SD Yes To be determined

See CAR 02 in Appendix A, Table 2

Validation of ODAThe validation did not reveal any evidence that this project activity can be seen as a diversion of ODA. This hasbeen confirmed through interview with the project participant /I01/. The project will be fully funded by TGR.The project participant has provided supporting document /29/ to substantiate no public funding in the projectactivity.

3.2 Project Design Document:The Project Design Document is based on the currently valid PDD template and is completed in accordancewith the applicable guidance document /B10/, /B11/.

3.3 Project Description:The proposed project 8MW Cirompang Mini Hydro Power Plants at Bungbulang is a run-of-riverhydroelectric power plant being developed by PT. Tirta Gemah Ripah (TGR) in Garut district, West JavaProvince, Indonesia. According to the PDD, the geographical coordinates of the dam and powerhouse areindicated as below:


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Power Plant North Latitude East Longitude

Dam -7.4505 +107.6093

Power house -7.4762 +107.6122

The project involves construction of a new hydropower plant at an existing dam which mainly consists of acompanion channel at Cirompang River, a diversion tunnel, and a hydropower house /11/. The total installedcapacity of the hydroelectric plant is 8MW.

The project consists of 4 units of water turbines with the unit capacity of 2 MW /11, page 42/, /27/. Thus thetotal installed capacity of the hydropower plant is 8 MW. An EPC was signed with PT. Hutama Karya on 4August 2011 to construct the whole project including engineering, planning, project design, procurement,constructing, testing, commissioning and interconnection to the grid of PLN /23/. The key equipments of theproject are imported from India with foreign technology transfer (supplier: Jyoti ltd. Vadodara) /27/. In addition,the validation team also validated the Investment Approval Number: 503/1564/KPM from the Regent of Garut/8/, approval of UKL-UPL (Environment Analysis) on Cirompang Mini hydro power plant /10/ fromEnvironment management Division of Garut Regency, PPA between PT. PLN (Persero) and PT. Tirta GemahRipah on 21 November 2011 /26/ to confirm the installed capacity of 8 MW.

The load factor is indicated in FSR as 68.77%. This Plant Load Factor is calculated by the qualified engineeringconsultation company PT. Chandripa Tirta Energia /13/ that designed the FSR of the proposed project /11/. Thevalue of Plant Load Factor of 68.77% is also confirmed by PT. Chandripa Tirta Energia via a separateconfirmation letter /12/, and is considered acceptable as per Guidelines for the Reporting and Validation ofPlant Load Factors /B14/.

The project activity is constructed at an existing reservoir and dam on River Cirompang. The project participanthas signed an agreement with GP3A (Association of farmers) /24/ for using the water from river Cirompang forpower generation. There will be no modification done by the project owner in existing reservoir and dam for use

of water for power generation. Thus the project activity is implemented in an existing reservoir with no changein the volume of reservoir.

The annual net electricity generation from the project is 47,471 MWh. The electricity generated from the projectactivity is expected to substitute the power supply from the Jamali national power grid which is mainlycomposed of fossil fuel-fired power generation. The expected GHG emission reductions of the project activityare 33,847 tCO2e annually during the 10-year fixed crediting period.

According to the project participant, the grid connection was agreed by PLN via the first power purchaseagreement (PPA) signed with PLN (2MW) on 28th June 2010 /7/. According to the PDD, the project will supplyelectricity to the national grid via 20 kV transmission line /11, page 40/.

The CER buyer NEFCO has signed the CDM Emission Reductions Purchase Agreement with TGR.

During the on-site visit, the construction of companion channel is in progress. The construction of powerhousehas not yet started. The management representative of the project participant stated that the project constructionis anticipated to be completed by March 2013. It was also understood that TGR will be responsible fororganizing the necessary training for the operation, maintenance and monitoring procedures of CDMimplementation. He stated that since the project was still in the preliminary stage, the technical training andCDM trainings were not yet started. The CDM trainings will be carried out by the manufacturer and CDMconsultancy company respectively before the project commissioning. The details about the emergencyprocedure and training requirements for monitoring are provided in section B.7.2 of the revised PDD. Moreover,

the project participant stated that the CDM training will be conducted prior to the start of the crediting period.According to the PDD, a fixed crediting period of 10 years is selected. The starting date of project activity,which was based on the date of the EPC contract, was on 04th August 2011 /23/.


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It revealed that the project participant has commissioned PT. Chandripa Tirta Energia, a qualified engineeringconsultation company, to conduct FSR in November 2010. The project participant confirmed that no real actionwas taken to implement the project prior to 04 August 2011 (project starting date as indicated in the web-hostedPDD). The detailed timeline for the project activity since 2010 till the real action taken as the starting date ofproject activity (i.e. 04 August 2011) has been updated in section B.5. of the final PDD. From timeline as wellas supporting documents /6/, /7/, /8/, /9/, /10/, /11/, /14/, /15/, /16/, /17/, /19/, /23, /34/ and /35/, it is substantiated

that the project participant has proceeded for approval from authority for investment into the proposed projectsince 2010, and negotiated for compensation for land acquisition since January 2011 till April 2012. It can beconcluded that there was no real action of project activity before 04 August 2011. Thus, the validation team isable to confirm that 04 August 2011, i.e. the signed date of the EPC contract, is the earliest date among thesereal actions of the project.

The starting date of the first crediting period will be expected to be started on 1st March 2013. According to thePDD section C.1.2., the expected operational lifetime of equipment will be 20 years based on the information ofFSR. With full operational time of 365 days per year and production hour of 24 hour per day, the annual fulloperating time is 8,760 hours. This is considered appropriate according to the requirement of Tool to determinethe remaining lifetime of equipment (EB 50 Annex 15), in which the project lifetime for hydro turbines is

150,000 hours, i.e. (150,000/8,760) years ~ 17 years. It is noted that the plant load factor of the project activityis 68.77%. That means the project activity will not always operate in full capacity due to the fluctuation ofhydro resource. If the plant load factor is taken into account, the project lifetime for hydro turbines will be 24.9years (150,000 hours/8,760/68.77%). Thus, the value of operational lifetime of equipment of 20 years is in therange and acceptable.

Starting date of project Expected project operationallifetime

Crediting period

04 August 2011 20 years. 10 years starting on 01 March 2013

Herewith, the Validation Team summarizes major changes between webhosted PDD and final version of PDDfor submission as follows:

Subject Webhosted PDD Correction to webhosted PDD in the finalPDD submission for registration with DOE

assessment and reason of acceptance.PDD ( project title /participantsinvolved/ projectlocation /projecttechnology etc)

Project technology:It was described in the PDD that theproject has no reservoir.

Project technology:The project activity is run-off riverhydropower which is implemented in theexisting reservoir and dam. The projectparticipant has received approval to use thewater for power generation. There will be no

modification done by project participant inexisting reservoir for use of water for powergeneration.

Methodologies andtools applied ( scopeand versionnumbers)

N/A N/A

CER calculations(formula applied/amount of emissionreduction)

Project Emission:The webhosted PDD does not explainclearly whether the project activitywould use diesel generator in the eventof emergency, or shut down formaintenance.

Project Emission:Its described in section A.4.2 of the revisedPDD that diesel generators will be used incase of emergency. The project emission fromdiesel generator used in emergency purposeswill be monitored and calculated by the Toolto calculate project or leakage CO2 emissionfrom fossil fuel consumption, Version 02, asper sections B.6.1 and B.7.1 of the final PDD.


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The Project Emissions (PEy) is estimated as 0tCO2e per year for Ex- ante emissionscalculation.

Additionality:(benchmark / inputvalues/analysis

type/project startdate/IRR or NPVvalues etc)

Benchmark:The benchmark (WACC) was calculatedas 21.3%

IRR value:The IRR value (without CDM) wascalculated as 14.13%

Benchmark::The benchmark (WACC) was re-calculated as22.7%

IRR value:The IRR value (without CDM) was calculatedas 15.06%

Monitoring(parameters /frequency )

Monitoring Project Emission:The project emission from dieselgenerator used in emergency purposeswas not yet considered and monitored.

Monitoring Project Emission:Parameters for calculation of the projectemission from diesel generator used inemergency purposes was considered andmonitored as per sections B.7.1 of the finalPDD.

Crediting period

( type / start date)

N/A N/A

Please refer to Appendix A of this report for details of each change between webhosted PDD and the final PDDfor submission. The Validation Team has carried out the validation process based on the Webhosted PDD andraised CARs/CLs against the project by issuing the validation protocol.With the updated information and corrections done on final PDD, the PP has addressed all the CARs /CLs thatwere raised by the Validation Team.It is concluded that the Validation Team has reviewed the project in line with the VVM (version 01.2) and all theevidence, corrections, justifications and updating done on the final PDD with respect to CARs /CLs raised areaccepted and closed by the Validation Team, issuing the positive validation opinion for project registration. FARare further issued to the DOE verification team to check the implementation and operational completeness duringthe first verification.

TV Rheinland validation team considers the project description of the project contained in the PDD to becomplete and accurate. The PDD complies with the relevant methodology, tools, forms and guidance at the timeof PDD submission for registration.

3.4 Baseline and Monitoring Methodology:3.4.1 Applicability of the selected methodology to the project activityThe project applies the approved baseline and monitoring methodology AMS-I.D/Version 17 Grid connectedrenewable electricity generation, which also uses the build margin (BM) and operating margin (OM) approachin the Tool to calculate the emission factor for an electricity system Version 02.2.1, and makes reference tothe Appendix B of the Simplified Modalities and Procedures for Small-scale CDM project activities.

Applicability criteria for the baseline methodology are assessed by the validation team by means of documentreview and interview. It is agreed in the validation teams opinion that the project activity fully met the criteriaas described below:

Applicability criteria of the methodology AMS-I.D, Version17

Criteriafulfilled

Determination by the validationteam

This methodology comprises renewable energy generationunits, such as photovoltaic, hydro, tidal/wave, wind,geothermal and renewable biomass:

a) Supplying electricity to a national or aregional grid; or

b) Supplying electricity to an identifiedconsumer facility via national/regional grid

YesNo

The project activity involves theinstallation of a new 8MW hydrohydroelectric project that willsupply electricity to Jamali Grid,

an electricity distribution systemsupplied by fossil-fuel firedgenerating units. This is confirmedby validation of the InvestmentApproval Number: 503/1564/KPM


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Criteriafulfilled

Determination by the validationteam

through a contractual arrangement such aswheeling.

from the Regent of Garut /8/,approval of UKL-UPL(Environment Analysis) onCirompang Mini hydro power

plant /10/ from Environmentmanagement Division of GarutRegency, PPA between PT. PLN(Persero) and PT. Tirta GemahRipah on 21 November 2011 /26/.

Illustration of respective situations under which each of themethodology (i.e. AMS-I.D, AMS-I.F and AMS-I.A) appliesis included in Table 2.

Project type AMS-I.A

AMS-I.D

AMS-I.F

1 Project supplies electricity toa national/regional grid 2 Project displaces grid

electricity consumption (e.g.grid import) and/or captivefossil fuel electricitygeneration at the user end(excess electricity may besupplied to a grid)

3 Project supplies electricity toan identified consumerfacility via national/regional

grid (through a contractualarrangement such aswheeling)

4 Project supplies electricity toa mini grid system where inthe baseline all generatorsuse exclusively fuel oiland/or diesel fuel

5 Project supplies electricity tohousehold users (included inthe project boundary) locatedin off grid areas

YesNo

The project activity is a newlybuilt hydropower plant to generateelectricity supplied to the JamaliGrid, in which the geographic andsystem boundaries for the JamaliGrid can be clearly identified.

Jamali grid is owned by PTPerusahaan Listrik Negara (PLN) ,a state owned electricity companyof Indonesia. Thus the projectcomplies with the applicabilitycriteria of AMS I.D. This isconfirmed by validation of PPAbetween PT. PLN (Persero) andPT. Tirta Gemah Ripah on 21November 2011 /26/.

This methodology is applicable to project activities that (a)install a new power plant at a site where there was norenewable energy power plant operating prior to theimplementation of the project activity (Greenfield plant); (b)involve a capacity addition; (c) involve a retrofit of (an)existing plant(s); or (d) involve a replacement of (an) existingplant(s).

YesNo

The project activity shall install anew hydropower plant at a sitewhere there was no renewableenergy power plant operating priorto the implementation of theproject activity (Greenfield plant).Thus the Project Activity complieswith the applicability criteria (a).This is confirmed during the onsite visit and interview with theproject owner /I01/ and review of

the Investment Approval Number:503/1564/KPM from the Regent ofGarut /8/, approval of UKL-UPL(Environment Analysis) onCirompang Mini hydro power


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Criteriafulfilled

Determination by the validationteamplant /10/ from Environmentmanagement Division of GarutRegency, PPA between PT. PLN(Persero) and PT. Tirta Gemah

Ripah on 21 November 2011 /26/.

Hydro power plants with reservoirs that satisfy at least one ofthe following conditions are eligible to apply thismethodology:

The project activity is implemented in an existingreservoir with no change in the volume of reservoir;

The project activity is implemented in an existingreservoir, where the volume of reservoir is increasedand the power density of the project activity, as per

definitions given in the Project Emissions section, isgreater than 4 W/m2;

The project activity results in new reservoirs and thepower density of the power plant, as per definitionsgiven in the Project Emissions section, is greater than4 W/m2.

YesNo

The project activity isimplemented at an existingreservoir, and the project wouldnot cause change in the volume ofreservoir. Hence, this condition isapplicable to the project activity.

This is confirmed during the onsite visit and interview with theproject owner /I01/ and review ofapproval of UKL-UPL

(Environment Analysis) onCirompang Mini hydro powerplant /10/ from Environmentmanagement Division of GarutRegency, and Agreement betweenthe project participant with GP3ADI Cirompang /24/ dated 11thAugust 2011 for using the waterfrom river Cirompang for powergeneration.

If the new unit has both renewable and non-renewable

components (e.g., a wind/diesel unit), the eligibility limit of15 MW for a small-scale CDM project activity applies only tothe renewable component. If the new unit co-fires fossil fuel,the capacity of the entire unit shall not exceed the limit of15 MW.

YesNo

The project activity has onlyrenewable component (Hydro)

with installed capacity of 15 MW.Hence, this condition is notapplicable to the project activity.This is confirmed by validation ofthe Investment Approval Number:503/1564/KPM from the Regent ofGarut /8/.

Combined heat and power (co-generation) systems are noteligible under this category.

YesNo

The project activity has onlyrenewable component (Hydro).The project activity does notinvolve heat recovery and co-firedfossil fuel, thus it is not acombined heat and power (co-generation) system.. This isconfirmed by validation of theInvestment Approval Number:503/1564/KPM from the Regent ofGarut /8/.

In the case of project activities that involve the addition ofrenewable energy generation units at an existing renewablepower generation facility, the added capacity of the unitsadded by the project should be lower than 15 MW and shouldbe physically distinct from the existing units.

YesNo

The project activity involves theinstallation of a new 8MW hydrohydroelectric project. No additionof renewable energy generationunits is involved. The total

installed capacity of the projectactivity does not exceed thethreshold of 15MW for small-scaleCDM project. This is confirmed byvalidation of the Investment


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Criteriafulfilled

Determination by the validationteamApproval Number: 503/1564/KPMfrom the Regent of Garut /8/.

In the case of retrofit or replacement, to qualify as a small-

scale project, the total output of the retrofitted or replacementunit shall not exceed the limit of 15 MW.

YesNo

The project activity does not seekto retrofit or modify an existing

facility. This is confirmed byvalidation of the InvestmentApproval Number: 503/1564/KPMfrom the Regent of Garut /8/.

Thus the validation team considers that the applicability criteria for the baseline methodology has been correctlyapplied for the project activity.

According to Guidelines on assessment of debundling for SSC project activities (Version 03), the validationteam has validated that the project is not deemed to be a debundled component of a large scale project. Thevalidation criteria are stated below:

According to the information from UNFCCC, there is no registered small-scale CDM project activity or anyapplication to register another CDM small-scale CDM project activity by the project participants, i.e. TGRwithin the previous two years with the same project category and technology within 1 km of the projectboundary of the project activity. As stated by the project developer, the project activity obtains the divertedwater for power generation from the existing reservoir on Cirompang River. This is the only one hydro powerplant on this river. The project participant also reported that this is the first hydropower project invested byTGR. Therefore, the project activity is not deemed to be a debundled component of a large project activity.

The assessment of the projects compliance with the applicability criteria of the methodology AMS-I.D, Version17 as documented in the PDD part B and annex 3, which are evaluated in detail under the validation protocol inAppendix A to this report based from the webhosted PDD.

3.4.2 Project Boundary:During the on-site visit, the project construction is under progress. The project participant stated that the projectconstruction was started by August 2011 /23/. According to approved methodology AMS-I.D./Version 17, thespatial extent of the project boundary includes the power plants that are physically connected throughtransmission and distribution lines to the project activity, i.e. power plants to the Jamali Grid. There is nosignificant transmission constraint between the power plants of the Jamali Grid. The PPA signed with PLN, theowner of Jamali Grid, on 28th June 2010 /7/, and amended on 21st November 2011 /26, allows the connectionfrom the power plant to Jamali Grid.

The geographical and physical project boundary of the project activity was determined by the validation team

during the on-site assessment. The coordinates were correctly documented in the PDD. The sources and sinks ofgreenhouse gas identified in the PDD are deemed to be appropriate. The coordinates were confirmed by thevalidation team through Global Positioning System (GPS).

The system boundary and the selected sources and gases are justified transparently and are presented as below:.

Emissions GHGs involved DescriptionBaseline emissions CO2 Major emission source

Project emissions

CO2

Minor emission source

Diesel generators will be used in case ofemergency.

According to VVM, if this emission sourcecontributes more than 1% of the expected averageannual emission reductions, it will be accountedfor as project emissions.


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CH4(from the

reservoir)

Major emission source

As per AMS-I.D./Version 17, the project missionsare negligible as there is no new reservoir for theproject activity. The project activity isimplemented in the existing reservoir, owned by

Garut Regency and would not cause change in thevolume of reservoir.

Leakage -- Since the project activity is a new hydropowerproject and the energy generating equipment is nottransferred from another activity, leakage is thusconsidered negligible as per AMS-I.D./Version 17.

In summary, the project boundary was correctly identified in accordance with the methodology AMS-I.D.,Version 17. All greenhouse gas emissions occurring within the proposed project activity boundary as a result ofthe implementation of the proposed CDM project activity have been appropriately addressed in the PDD.The identified project boundary and selected sources of emissions are justified for the project activity. The

validation of the project activity did not reveal other greenhouse gas emissions occurring within the proposedCDM project activity boundary as a result of the implementation of the proposed project activity which areexpected to contribute more than 1% of the overall expected average annual emission reduction, with respect tothe methodology applied.

3.4.3 Baseline Identification:

The project activity is the installation of a new grid-connected renewable hydropower plant. According to theapplied methodology AMS-I.D./Version 17, the baseline scenario is prescribed as:

The baseline scenario is the electricity delivered to the grid by the project activity that otherwise would havebeen generated by the operation of grid-connected power plants and by the addition of new generation sources.

The baseline emissions are the product of electrical energy baseline EGBL,yexpressed in MWh of electricityproduced by the renewable generating unit multiplied by an emission factor, which can be calculated in atransparent and conservative manner as a combined margin (CM) according to the procedures prescribed in thelatest Tool to calculate the emission factor for an electricity system.

The validation team has checked the following in accordance with the latest version of CDM Validation andVerification Manual, and the results are tabulated as follows.

The details can be referred to Appendix A.

The approved baseline methodology applicable to theproject

explicit criteria

implicit criteria (e.g. available scenarios,applicability of formulas for BE/PE/LEcalculations)

Yes

No

As per clause 10 of AMS-I.D./Version 17,the baseline scenario is prescribed. Pleasesee details in Section 3.4.1

PDD includes all assumptions and data used byproject participants

Yes

No

As per AMS-I.D./Version 17, allassumptions and data used by the projectparticipant is included in the PDD.

All the references and documents used are relevantfor establishing the baseline scenario Yes

No

As per AMS-I.D./Version 17, all thereferences and documents used are relevantfor establishing the baseline scenario

All the references and documents used are correctlyquoted and conservatively interpreted in the PDD Yes

No

As per AMS-I.D./Version 17, all referencesused are correctly quoted and

conservatively interpreted in the PDD.All relevant policies / regulations considered arelisted in the PDD

Yes

No

As per AMS-I.D./Version 17, all relevantpolicies/regulations are considered in thePDD.


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Identified potential baseline scenarios reasonablyrepresent what would/could occur in the absence ofthe proposed project activity

Yes

No

As per AMS-I.D./Version 17, since this is anew grid connected power plant, thebaseline scenario is prescribed.

The baseline scenario selection is appropriate anddetermined according to the methodology

Yes

No

As per clause 10 of AMS-I.D./Version 17,the baseline scenario is prescribed.

The approved methodology used is applicable to theidentified baseline scenarioYesNo

As per clause 10 of AMS-I.D./Version 17,the baseline scenario is prescribed.

The approved baseline methodology has been correctly applied to identify a realistic and credible baselinescenarios, and the identified baseline scenario most reasonably represents what would occur in the absence ofthe proposed CDM project activity.All the assumption and data used by the project participants are listed in the PDD and/or supporting documents.All documentation relevant for establishing the baseline scenario and correctly quoted and interpreted in thePDD. Assumptions and data used in the identification of the baseline scenario are justified appropriately,supported by evidence and can be deemed reasonable. Relevant national and/or sectoral policies andcircumstances are considered and listed in the PDD.

3.4.4 GHG Emission Reductions:

The GHG emission reduction calculations are transparently documented in the ER calculation spreadsheet /31/.The GHG emissions calculations are documented and assumptions regarding expected amount of electricitygenerated have been used to forecast the emission reductions.

According to the selected methodology AMS-I.D., Version 17 for grid-connected renewable electricitygeneration and the latest Tool to calculate the emission factor for an electricity system, Version 02.2.1, theemission reductions (ERy) by the project during the crediting period is the difference between the baselineemissions (BEy), project emissions (PEy) and leakage emissions (LEy), which is expressed as follows:

ERy= BEy PEy LEy

The assumptions, formulas, parameters and values used in the context of the project activity are complete,accurate, transparent and conservative.Assumptions made and data used for estimating the ex-ante GHG emissions reductions have been assessed bythe validation team as follows:

Parameter Value Basis Validation team assessment

For Baseline EmissionTotal installed

capacity

8 MW Feasibility Study

Report /11/

This is confirmed by validation of the

Investment Approval Number: 503/1564/KPMfrom the Regent of Garut /8/, approval of UKL-UPL (Environment Analysis) on CirompangMini hydro power plant /10/ from Environmentmanagement Division of Garut Regency, PPAbetween PT. PLN (Persero) and PT. TirtaGemah Ripah on 21 November 2011 /26/. Thevalidation team concluded it is acceptable.

Total number ofhours of operationannually

8,760 hours Feasibility StudyReport /11/

It is assumed the project activity will beoperated 365 days per years, 24 hours per day.Thus the value of 8,760 (=365daysx24hours) isacceptable.

Plant load factor 68.77% Feasibility StudyReport /11/

The validation team also conducted survey ofother CDM registered projects (small-scaleprojects, employing same methodology, AMS-I.D., located in Indonesia) /47/ & found thatplant load factor value for the project activity


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lies well within this range.

Remarks: The validation team has surveyedIGES CDM Investment Analysis Database &CDM Pipeline list in http://cd4cdm.org/website as of 30 May 2012 & only 4 registered

small scale projects within Indonesia.

Ref Name ofCDM project

PLF Reg. date

3474

RanteballaSmall-ScaleHydroelectricPower Project

80.00%

10 Dec.2010

4021

10 MWTangka/Manipi HydroElectric PowerPlant

50.22%

26 Jan.2011

4106ParluasanHydro ElectricPower Plant

80.00%

12 Feb.2011

3580

Silau-2 smallhydro powerplant in NorthSumateraProvince,Indonesia

65.40%

07 Oct.2011

Thus the Plant Load Factor value of the project

activity is acceptable.Auxiliaryconsumption

1.5% Feasibility StudyReport /11/

The validation team confirmed the value to becorrect and acceptable. Moreover the netelectricity supplied to the grid will bemonitored during the whole crediting period.

Quantity of netelectricity suppliedto the grid as a resultof theimplementation ofthe CDM projectactivity in year y

(MWh), EGy

47,471MWh/year

Feasibility StudyReport /11/

This is a monitoring parameter which will bemonitored during the whole crediting period.With above data, the validation team cancalculate and confirm the value of 47,471MWh/year is acceptable.

CO2 emission factorof the grid in year y(t CO2/MWh)

0.713tCO2e/MWh

Report on Gridemission factor ofpublished by DNA/30/, /45/

The grid emission factor is correctlydetermined according to the tool and it istransparently documented in the GEFcalculation spreadsheet /30/ and Annex 3 of thePDD /02/, the raw data used were taken fromPLNnational electricity grid.This have beendemonstrated in Annex 3 of the PDD and crosschecked with the source:http://pasarkarbon.dnpi.go.id/web/index.php/komnasmpb/read/20/faktor-emisi-jaringan-listrik-

jawa-madura-bali-jamali-2010-.htmlThe validation team concluded that the officialdata sources are deemed to be valid and correct.

For Project EmissionQuantity of diesel 0 Litre Estimate as 0 litre for Due to the emergency back-up purpose, the


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consumption in theproject activity

ex-ante calculation annual consumption amount of diesel fuel isexpected to be very limited, thus the projectemissions from fossil fuel consumption can beneglected in ex-ante estimation.

Density of diesel 876x10-6T/litre

Conversion factorfrom litre of dieselinto Ton of diesel

The validation team checked the sourcehttp://www.aaaoe.com/buy/5/fuel_oil_4648/Diesel.htmland confirmed it is acceptable.

Net Calorific Valueof diesel

0.0433TJ/tonne

IPCC Default value The validation team reviewed the below sourceand confirmed it is correct:IPCC Default value from 2006 IPCCGuidelines for National GreenhouseGas Inventories, Volume 2, Chapter 1 (Table1.2).

Emission factor ofdiesel

74.8 tCO2/TJ IPCC Default value The validation team reviewed the below sourceand confirmed it is correct:IPCC Default value from 2006 IPCCGuidelines for National Greenhouse

Gas Inventories, Volume 2, Chapter 1 (Table1.4).

Baseline Emissions

As per paragraph 11 of the methodology AMS-I.D., Version 17, the baseline emissions are calculated as theproduct of electrical energy baseline yBLEG , expressed in MWh of electricity produced by the renewable

generating unit multiplied by the grid emission factor.

ygridCOyBLy EFEGBE ,,, 2*=

Where,

Parameter Description Ex-ante value

yBE Baseline Emissions in yeary(t CO2)

yBLEG , Quantity of net electricity supplied to the grid as a result of theimplementation of the CDM project activity in yeary (MWh)

47,471 MWh/year

ygridCOEF ,,2 CO2emission factor of the grid in year y (t CO2/MWh) 0.713 tCO2e/MWh

The baseline emission factor (EFgrid,CM,y) for the project, using the combined margin (CM) approach, is fixed ex-

ante during the first crediting period. According to AMS-I.D., Version 17 and the linked tools, the defaultweights for the proposed project are 50% for OM and 50% for BM for the first crediting period, and 25% forOM and 75% for BM for the second and third crediting period.

The validation team has crosschecked the data and calculation listed in Section B.6 of the PDD. It is found thatthe OM and BM data are provided by the Directorate General Electricity and Energy Utilization (DJLPE,Direktorat Jenderal Listrik dan Pemanfaatan Energi) (Indonesian DNA) /45/, /30/

The validation team also checked the PDD, and the grid information applied in the calculation of emissionfactor via the Indonesia DNAs webpage. In order to calculate OM emission factor, Average OM method hasbeen chosen as low cost/must run resources constitute more than 50% of total grid generation.

The Average OM emission factor is calculated as per Option A of the Tool /30/. BM emission factor is

calculated for the group of power capacity additions that have been built most recently and comprise 20% of thesystem electricity generation as it has the larger annual generation than the group of five power units that havebeen built most recently.


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The raw data on power generation as well as the calculation was provided by the report /30/ and listed inSection B.6.1. and Annex 3 of the final PDD /2/. The simple OM emission factor is calculated as 0.711tCO2e/MWh and the BM emission factor as 0.715 tCO2e/MWh.

The calculation of EFgrid,CMis as below:

EFgrid,CM= 0.50.711+0.50.715 = 0.713 (tCO2e/MWh)

The validation team has crosschecked the data listed in Annex 3 of the final PDD /2/ and the calculationspreadsheet /30/, and confirmed consistent. The emission reductions due to the project activity were estimatedex-ante to be 33,847 tCO2e per year in the final PDD /2/. The provided baseline data is thus confirmed to be themost recent data available at the time of submission of the PDD to the DOE for validation (i.e. December 2011),for the ex-ante estimation of emission reductions.

In summary, the baseline emission factor (EFgrid,CM) of the project activity is 0.713 tCO2e/MWh.

Thus baseline emission is estimated as 33,847 tCO2per year.

Project emissions

As per paragraph 20 of approved methodology AMS-I.D. (Version-17, EB- 61), the calculation of projectemissions of hydropower project will follow the procedures described in the most recent version of ACM0002.According to ACM0002, there are two components to be considered, i.e. emission from (i) fossil fuelconsumption (PEFF,y) and (ii) the reservoir (PEHP,y).The project emission for the project activity will be

PEy = PEHP,y+ PEFF,y

Where:PEHP,y - Emission from reservoir

PEFF,y - Emission from fossil fuel consumption in year y. It is the emission from diesel generator which will beused in emergency purposes and it is calculated by Tool to calculate project or leakage CO2 emission fromfossil fuel consumption.

For emissions from fossil fuel consumption (PEFF,y)

Through on-site interviews with the project participant /I01/, it was revealed that diesel backup generatorswould be used in unplanned emergency such as both the cut-off of electricity supply from the national grid andthe hydropower plant. The project participant will calculate project emissions from the back-up diesel generator

based on the actual diesel consumption. The consumption of diesel is monitored and the project emissions willbe calculated according to Tool to calculate project or leakage CO2 emissions from fossil fuel combustion/B18/. Due to the emergency back-up purpose, the annual consumption amount of diesel fuel is expected to bevery limited, thus the project emissions from fossil fuel consumption can be neglected in ex-ante estimation.

For emissions from the reservoir (PEHP,y)

The project activity does not result in new reservoirs or an increase in area of the existing reservoir. Thereservoir involved in the project activity is a Garut Regency-owned reservoir as part of the irrigationdevelopment works; the modification of the reservoir is beyond the project participants control and not relatedto the project activity. Thus the project emissions (PEHP,y) are considered as negligible. Thus PEHP,y= 0.

Thus, PEy= PEFF,y+ PEHP,y= 0

The following project emissions have been included and excluded from the project emissions estimationincluding the validation teams conclusion:


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Included project emission source Validation teams conclusionCO2emissions from fossil fuel consumption (PEFF,y) As the project activity will use diesel backup

generators in unplanned emergency such as both thecut-off of electricity supply from the national grid andthe hydropower plant, this emission is included.This is conservative and appropriate for the projectscenario

Excluded project emission source Validation teams conclusion

CO2emissions from the reservoir (PEHP,y) The project activity is implemented at an existingreservoir, and the project would not cause change inthe volume of reservoir. This is confirmed during theon site visit and interview with the project owner /I01/and review of approval of UKL-UPL (EnvironmentAnalysis) on Cirompang Mini hydro power plant /10/from Environment management Division of Garut

Regency, and Agreement between the projectparticipant with GP3A DI Cirompang /24/ dated 11thAugust 2011 for using the water from river Cirompangfor power generation.

This is appropriate for the project scenario.

According to the Tool to calculate project or leakage CO2 emission from fossil fuel consumption, Version 01/B18/, the project emission of the project activity is estimated as below:

PEFC,j,y =FCi,j yCOEFi,y

COEFi,y =NCVi,y EFCO2,i,yWhere:

Parameter Description Ex-ante valuePEFC,j,y Are the CO2 emissions from fossil fuel combustion in process j

during the year y0

FCi,j,y Is the quantity of fuel type i combusted in process j during the year y(mass or volume unit/year)

0 Tonne/year

COEFi,y Is the CO2 emission coefficient of fuel type i in year y (tCO2/massor volume unit)

3.23884 tCO2/tonne

NCVi,y Is the weighted average net calorific value of the fuel type i in year y 0.0433 TJ/tonne

EFCO2,i,y Is the weighted average CO2 emission factor of fuel type i in year y(tCO2/GJ)

74.8 tCO2/TJ

i Are the fuel types combusted in process j during the year y Diesel

Thus project emission of the project activity is estimated as 0 tCO2for ex-ante calculation.

Leakage emissions

Leakage is considered as negligible in accordance with AMS-I.D., Version 17, and hence can be assumed aszero.


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While the project emissions & leakage emissions are zero, baseline emissions (BEy) are equal to the emissionreductions (ERy) due to the project activity and have been estimated to be 33,847 tCO2e per year in the PDD,based on an ex-post baseline emission factor of 0.713 tCO2e/MWh /45/.

ERy= BEy= EGBL,yx EFgrid,CM,y

The emission reductions due to the project activity were estimated ex-ante to be 33,847 tCO2e per year.

In summary, the calculation of emission reductions was correctly demonstrated by the PP according to themethodology AMS-I.D., Version 17 and its tool Tool to calculate the emission factor for an electricity system,Version 02.2.1 /B19/. The table below summaries validation teams determination of emission reduction:

All assumptions made for estimating GHGare listed in the PDD

YesNo

As per PDD Section B.6., assumptions were madefor ex-ante GHG emission reductions.

All data used by project participants arelisted in the PDD

YesNo

All data such as GHG emission, electricitygeneration of power plants are listed in the PDD

Annex 3.Their references and sources are also listed inthe PDD

YesNo

All data from public sources, such as IndonesiaDNAs information are listed in the PDD Annex 3.

Formulas, parameters, values are complete,accurate, transparent and conservative

YesNo

The validation team checked and found that theformulas, parameters, values applied in Annex 3 ofthe final PDD /2/ are complete, accurate, transparentand conservative.

All the references and documents used arecorrectly quoted and conservativelyinterpreted in the PDD

YesNo

The validation team checked and found that thereferences and documents applied in Annex 3 of thefinal PDD /2/ are correctly quoted and

conservatively interpretedMethodology has been applied correctly tocalculate project emissions, baselineemissions, leakage emissions and emissionreductions

YesNo

The methodology AMS-I.D., Version 17 is appliedcorrectly to calculate project emissions, baselineemissions, leakage emissions and emissionreductions.

All the emissions of baseline emissions canbe replicated using information provided inthe PDD

YesNo

The validation team checked the informationprovided in the PDD /2/ with the referenceinformation, and all the emissions of baselineemissions can be replicated.

Based on the calculations and results presented in the sections above the implementation of the project activitywill result in an average ex-ante estimation of emission reduction conservatively calculated to be 33,847 tCO2eper year for the selected crediting period.All assumptions and data used by the project participants are listed in the PDD and/or supporting documents,including their references and sources. All documentation used by the project participants as the basis forassumptions and source of data is correctly quoted and interpreted in the PDD. All values used in the PDD areconsidered reasonable and conservative in the context of the proposed CDM project activity. The baselinemethodology has been applied correctly to calculate project emissions, baseline emissions, leakage and emissionreductions. All estimates of the baseline, project and leakage emissions can be replicated using the data andparameter values provided in the PDD.


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3.5 Additionality :

The project additionality was assessed by the validation team using the approach given below for complyingwith;1) Simplified modalities and procedures for small-scale clean development mechanism project activities /B15/2) Attachment A to Appendix B of the Simplified Modalities and Procedures for small-scale CDM projectactivities /B5/3) CDM Validation and Verification Manual, EB 55, Annex 1, Version 01.2 /B1/4) Non-binding best practice examples to demonstrate additionality for SSC project activities EB35, Annex 34/B8/The project activitys additionality has been assessed in the PDD under Section B.5, according to Simplifiedmodalities and procedures for small-scale clean development mechanism project activities /B15/ andAttachment A to Appendix B of the simplified Modalities and Procedures for Small Scale CDM projectactivities /B5/.This was in line with the requirement stated in the methodology, AMS-I.D. version 17 /B17/.The project participant has selected project IRR as the financial indicator to demonstrate the investment barrierof the project activity. The validation team considers this financial indicator selected to be appropriate for the

project.The investment analysis is applied in accordance to Guidelines on the Assessment of Investment Analysis(EB 62, Annex 5, version 05) /B12/.The validation team was able to verify that CDM has been introduced and considered prior to the starting of theproject activity.In conclusion, the assessment of the arguments presented in the PDD has been sufficient to demonstrate that theproposed project activity is not likely the baseline scenario and the emission reductions resulting from theproject activity are additional.The following sections described the validation details of project activitys additionality by the validation team.

3.5.1 CDM consideration:

According to the CDM Validation and Verification Manual paragraph 96 /B1/, if the project activity startingdate is prior to the date of publication of PDD for stakeholder comments it shall be demonstrated that the CDMbenefits were considered necessary in the decision to undertake the project as a proposed CDM project activity.For this project activity, during on site interviews, its reveled that the first business license was granted on 10thNovember 2009. The PDD stated that the notification letter about prior CDM consideration was sent to DNAIndonesia on 08th March 2011 /16/ and to UNFCCC on 09th March 2011 /17/. The project starting date was04th August 2011 when the EPC contract was signed /6/.

According to Guidelines on the Demonstration and Assessment of Prior Consideration of the CDM version 04EB 62 /B13/, for project activities with a starting date on or after 2nd August 2008, the project participant mustinform a host party DNA and the UNFCCC secretariat in writing of the commencement of the project activity

and of their intention to seek CDM status. Such notification must be made within six months of the projectactivity starting date using the standardized form F-CDM-Prior Consideration.

It is applicable to the project activity since the project starting date (i.e. 04th August 2011, the date when theEPC contract was signed) was after 2nd August 2008, therefore notifications to host party DNA and theUNFCCC were required. As reported in the Section B.5 of the PDD, the project participant submitted an officialletter to the Indonesia DNA on 08th March 2011 /16/ and to UNFCCC on 09th March 2011 /17/.

The notification of CDM status to UNFCCC was in five month prior to the project activity starting date.Therefore the requirements in the Demonstration and Assessment of Prior Consideration of the CDM arecomplied, and the adequacy of CDM prior consideration compliance is demonstrated for the project activity.

It is TV Rheinland validation team opinion that the proposed CDM project activity complies with the

requirements of the latest version of the guidance on prior consideration of CDM.

The timeline for the project activity is detailed as below:


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Timeline Milestone Determination by the validation teamJune 2010 Finish Feasibility study report Feasibility study report, June 2010 /11/

23rd June 2010 Board decision to processs the clearance forthe 8 MW project activity

Certified true copy of the resolution passedby the board of directors of PT Tirta GemahRipah for developing 8 MW CirompangMini hydropower project, dated 23rd June

2010 /6/28th June 2010 PPA between PT. PLN (Persero) and PT.

Tirta Gemah Ripah for Mini Hydro PowerPlant Total Capacity 2000 kW.

Document No. 128/Pj/041/DJBB/2010, date28th June 2010 /7/

23rd July 2010 Investment Approval from the Regent ofGarut for Cirompang Mini Hydro Power Plantwith capacity 8.000 kW.

Document No. 503/1564/KPM, date 23rdJuly 2010 /8/

26th July 2010 Recommendation on Cirompang MHPs Useof Land Allocation Permit, from the Office ofHousing, Spatial Planning, and Settlements,Garut regency.

Document No. 503/167/RK-TR/VII/2010,date 26th July 2010 /9/

2nd September2010 Recommendation letter document ofEnvironmental Management Effort &Environmental Monitoring Effort forCirompang MHP 8 MW construction.

Document No. 660/394/TL-BPLH/10, date2nd September 2010 /10/

10th December2010

Board resolution to undertake the projectactivity under CDM

Certified true copy of the resolution passedby the board of directors of PT Tirta GemahRipah for developing 8 MW CirompangMini hydropower project, dated 10thDecember 2010 /14/

2nd March 2011 CDM Advisory services agreement betweenPP and consultant.

CDM Advisory services agreement, No.CDM/EVI/TGR/03/162011, dated 2ndMarch 2011

8th March 2011 CDM prior intimation to DNA CDM notification letter No.33/DIR/TGR/III/2011, dated 8th March2011 /16/

9th March 2011 CDM prior intimation to UNFCCC CDM notification letter, dated 9th March2011 /17/

15th April 2011 Stakeholder consultation meeting Meeting minute, dated 15th April 2011 /19/4th August 2011 EPC contract between PT. Hutama Karya

(Persero) and PT. Tirta Gemah RipahEPC Contract No. TGR 04/SPP/PLTM-CRP/TGR/VIII, dated 4th August 2011 /23/

11th August2011

The Agreement between PT. TGR with GP3ADaerah Irigasi Cirompang (affiliation offarmers using Cirompang water) regarding theUse of Dams, Irrigation Channels, andTunnels for the Cirompang Mini HydroPower Investment Project.

The Agreement No. TGR:001/DIR/TGR/PPJ/CRPM/VIII/2011, dated

11th August 2011 /24/

21st November2011

PPA between PT. PLN (Persero) and PT.Tirta Gemah Ripah for Mini Hydro PowerPlant Total Capacity 8000 kW

047.Add/041/DJBB/2011, date 21stNovember 2011 /26/

From the timeline above, it is confirmed that the starting date of project is 04th August 2011, which is the datewhen the EPC contract was signed /23/.

Starting date of project Justification of and evidences

(references) on the starting dateof project

Date of CDM consideration

04th August 2011 (i.e. the datewhen the EPC contract was signed

The validation team interviewedwith the project participant andchecked provided project

(i) CDM notification submitted tothe DNA of Indonesia on 08th


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/23/) documents; the signing of EPCcontract was the earliest dateamong these real actions of theproject. According to the definitionof project starting date in CDMGlossary, the selected starting date

of project activity is justified.

March 2011;

(ii) CDM notification received byEB on 09th March 2011.

In conclusion, the staring dates of the project activity were after 02 August 2008, the proposed project activity isdefined as an new project activity. As per the Guidelines on the demonstration and assessment of priorconsideration of the CDM/B13/, the project participant must inform a Host Party designated nationalauthority (DNA) and the UNFCCC secretariat in writing of the commencement of the project activity and of

their intention to seek CDM status. Such notification must be made within six months of the project activity start

date and shall contain the precise geographical location and a brief description of the proposed project activity.The project participant has sent notifications to DNA and UNFCCC and the validation team confirmed that it isvalid and acceptable. Based on the documented evidence as described above, it is clearly demonstrated that theCDM was seriously considered by the project owners prior to starting dates of the project activity.

3.5.2 Alternatives:The methodologies AMS-I.D, version 17 /B17/ does not require the analysis of baseline alternatives. Further, asper paragraph 28 of the simplified modalities and procedures for small-scale CDM project activities /B15/, asimplified baseline and monitoring methodology listed in appendix B may be used for a small-scale CDMproject activity if project participants are able to demonstrate to the validation team that the project activitywould otherwise not be implemented due to the existence of one or more barrier(s) listed in Attachment A ofAppendix B /B5/.TV Rheinland validation team considers the selected baseline is credible and complete.

3.5.3 Investment analysis:The Investment Analysis has been assessed for compliance with the latest version (05) of the Guidance on the

Assessment of Investment Analysis. /B12/According to Attachment A to Appendix B of the Indicative simplified baseline and monitoring methodologiesfor selected small-scale CDM project activity categories /B5/, the project participants have chosen investmentbarrier in order to demonstrate the additionality of the project.At the time of decision making, the Internal Rate of Return (IRR) analysis was conducted based on inputsvalues taken from approved FSR /11/ with the Debt / Equity ratio of 70/30. This can be demonstrated that theloan has also been considered at the time of the investment decision, considering the fact that the financial planincluded bank loan.It is appropriate and in accordance with the Guidelines on the assessment of investment analysis (Version 05)/B12/, paragraph 6, Input values used in all investment analysis should be valid and applicable at the time ofthe investment decision taken by the PP.A complete account of how the parameters used in Investment Analysis are validated and cross-checked inaccordance to VVM articles 110 - 111 have been conducted with traceable information from registered CDMprojects and other independent sources.

3.5.3.1 Choice of approach:

According to the Attachment A to Appendix B of the simplified modalities and procedures for small-scaleCDM project activities /B5/ as referred to the General Guidelines to SSC CDM methodologies version 17/B7/ and the Guidelines on the Assessment of Investment Analysis (Version 5, EB62 Annex 5) /B12/, thebenchmark analysis was selected by the project participant when conducting the projects financial assessment.The selection of benchmark analysis is justified in considering that, other than the CDM revenue, the projectactivity would generate revenue through the sale of electricity to the national grid company. The benchmark

approach is considered appropriate, since the baseline scenario does not require investment or is out of the directcontrol of the project developer. This is also complied with the requirement in the article 19 of the Guidelineson the assessment of investment analysis. The project participant has selected project IRR as the financialindicator. The validation team considers this financial indicator selected to be appropriate for the project, since


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the project will be financed 70% loan & 30% equity capital. In addition to this, the baseline scenario alsoreveals that the continuation of the current situation - electricity will continue to be imported from the grid,which is outside the direct control of the project participant. Hence, the choice for the project participant isrestricted to invest or not to invest. The validation team concludes that the benchmark approach is the mostsuited as defined in the Guidelines on the A

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Final Validation Report_8MW Cirompang Mini Hydro Power Plant

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