Solutions to improve cdm projects development consulting activities’ efficiency at pvfc

NATIONAL ECONOMICS UNIVERSITY ADVANCED EDUCATIONAL PROGRAM BACHELOR THESIS SOLUTIONS TO IMPROVE CDM PROJECTS DEVELOPMENT CONSULTING ACTIVITIES’ EFFICIENCY AT PVFC Student: Pham Hong Tien Class: Advanced Educational Program Intake: 50 Supervisor: Vu Dinh Hien, Ph.D Hanoi, 2012 ACKNOWLEDGEMENT First of all, I would like to give a warm thanking to all the lecturers of Advance program of National Economics University in accordance with all the staff of PetroVietnam Financial Corporation - PVFC - for providing me with favorable conditions and enthusiastic supports to complete my thesis Especially, I would also want to express a sincere gratitude to my supervisor Dr Vu Dinh Hien, who directly guided me in the process of writing my thesis Moreover, I also want to give special thanks to Mr Bui Cong Huy, Deputy Manager of CDM Department, for enthusiastically providing me with valuable instruction and explanations about the CDM Projects Development Consulting Activities at PVFC During month of internship at PetroVietnam Financial Corporation - PVFC, I have tried my best to collect necessary information and proposed some recommendations to improve the efficiency of CDM Project Development Consulting Activities at PVFC However, there are certain limitations and possible misconceptions due to the lack of time and information Therefore, I am willing to receive any comments and suggestions on my thesis Supervisor: Vu Dinh Hien, Ph.D Pham Hong Tien CQ502663 Table of Contents LIST OF TABLES LIST OF FIGURES ABBREVIATION INTRODUCTION CHAPTER 1: PROJECTS DEVELOPMENT CONSULTING SERVICE 1.1 Overview of Projects Development Consulting Service 1.1.1 Consulting Service 1.1.2 Projects Development Consulting Service 1.2 Consulting Activities’ Efficiency 10 1.2.1 Evaluation Criteria 11 1.2.2 Influencing factors CHAPTER 2: CDM PROJECTS DEVELOPMENT CONSULTING SERVICE OF PVFC 16 2.1 General Introduction of PVFC 16 2.1.1 Foundation & Development History 2.1.2 Vision & Mission 2.1.3 Organizational Structure 19 2.1.4 Business Activities 2.1.5 Business Results from 2008 to 2011 2.2 Current Situation of CDM Projects Development Consulting Service at PVFC 26 2.2.1 Introduction of Clean Development Mechanism (CDM) 26 2.2.2 CDM Projects Development Consulting Activities at PVFC 33 2.3 Evaluation of Consulting Activities’ Efficiency 40 2.3.1 Current Situation & Limitations of CDM Projects Development Consulting Activities at PVFC… 2.3.2 Reasons for Consulting Activities’ Inefficiency .4 CHAPTER 3: SOLUTIONS FOR IMPROVING CDM PROJECTS DEVELOPMENT CONSULTING ACTIVITIES’ EFFICIENCY .5 3.1 Review of current situation 51 3.2 Solutions to improve efficiency of CDM Projects Development Consulting Activities 53 3.2.1 Short-term Recommendations .5 3.2.2 Long-term Recommendations 58 REFERENCES .61 COMMENTS Supervisor: Vu Dinh Hien, Ph.D Pham Hong Tien CQ502663 LIST OF TABLES Table 1: Qualitative Criteria 11 Table 2: PVFC's Mobilization Results 23 Table 3: PVFC's Loan Structure 24 Table 4: PVFC's Business Results (2008-2011) Table 5: 25 CDM Projects Development Consulting Process Table 6: .3 List of CDM Projects 41 Table 7: Priority Order 54 LIST OF FIGURES Figure 1: Project Development Consulting Process .9 Figure 2: Organizational Structure 19 Figure 3: The Kyoto Flexibility Mechanisms Figure 4: CDM Project's Life Cycle 32 Supervisor: Vu Dinh Hien, Ph.D Pham Hong Tien CQ502663 ABBREVIATION CDM : Clean Development Mechanism UNFCCC : United Nation Framework Convention on Climate Change PVFC : PetroVietnam Financial Corporation UNCED : United Nations Conference on Environment and Development GHG : Greenhouse Gases IET : International Emissions Trading JI : Joint Implementation AAUs : Assigned Amount Units CERs : Certified Emission Reductions ERUs : Emission Reduction Units EB : Executive Board COP : Conference of the Parties PDD : Project Design Document DNA : Designated National Authority DOE : Designated Operational Entity Supervisor: Vu Dinh Hien, Ph.D Pham Hong Tien CQ502663 INTRODUCTION The essential of the research In recent years, the phrase “climate change” has received special concerns from all human beings as a hot issue We have been gradually aware of the severe impacts of climate change on our daily life as well as the serious threats on our future The weather phenomena such as droughts, floods, especially the global warming are the most visible evidences of climate change In a near future, poor people in developing countries are subjected to the most severe impacts of climate change It can be said that climate change has been ruining the international efforts on fighting against poverty in developing countries In 1992, the leaders of 154 countries signed the “United Nations Framework Convention on Climate Change”, in which these countries commit to reduce their emission of greenhouse gases To enforce the implementation of these commitments, the United Nations created the Kyoto Protocol in 1997regulating on flexible mechanisms One of such flexible mechanisms is the “Clean Development Mechanism” (CDM) This mechanism allows developing countries receive financial aids and technologies from developed countries for implementing national policies on the environment while still ensuring sustainable development Realizing the benefits from this mechanism, Vietnam has actively participated in the Kyoto Protocol and facilitated the development of CDM projects Currently, there are many domestic and foreign organizations providing CDM projects development consulting service in Vietnam The PetroVietnam Finance Corporation is among organizations providing this type of service In addition to the main task of arranging capital for PetroVietnam’s projects, PVFC has been supporting the CDM projects development of companies within the petroleum industry with Supervisor: Vu Dinh Hien, Ph.D Pham Hong Tien CQ502663 consulting service However, due to various objective and subjective reasons, PVFC’s consulting activities have not met the efficiency as expected Having recognized PVFC’s role in popularizing CDM in Vietnam as well as issues existing in PVFC’s consulting activities, I have decided to conduct a research on “Solutions for improving the efficiency of CDM projects development consulting activities at PVFC” Research Methodology In the process of researching, the method of qualitative and quantitative analysis is used as bases for all evaluations and implication:  Qualitative analysis: based on the collection of primary data through interviews with the CDM department’s staff about CDM consulting activities’ current performance in comparison with specific standards of evaluating the consulting activities’ efficiency, I have made identifications, interpretation and commentaries on the issues  Quantitative analysis: Given the limitations in term of time and the availability of information needed, this research is just able to conduct brief analysis on some key indicators of consulting activities’ performance Research Scope My research focuses on evaluating the efficiency of CDM projects development consulting activities at PVFC based on specific evaluation criteria As issues are identified, some feasible solutions and recommendations are proposed Research Structure The research consists of three chapters: Supervisor: Vu Dinh Hien, Ph.D Pham Hong Tien CQ502663  Chapter 1: Project Development Consulting Service The aim of this chapter is giving brief introduction of the Project Development Consulting Service as well as general knowledge of Consulting Activities’ Efficiency including evaluation criteria and influencing factors  Chapter 2: CDM Projects Development Consulting Activities of PVFC This chapter provides general information about the PetroVietnam Financial Corporation and further details about CDM Projects Development Consulting Activities at PVFC In this chapter, the Consulting Activities’ current performance will be described and analyzed in order to identify shortcomings or issues existed and possible reasons behind  Chapter 3: Solutions for improving CDM Projects Development Consulting Activities’ Efficiency In this chapter, some feasible solutions and recommendations are proposed in the effort of improving CDM Projects Development Consulting Activities’ Efficiency at PVFC Supervisor: Vu Dinh Hien, Ph.D Pham Hong Tien CQ502663 CHAPTER 1: PROJECTS DEVELOPMENT CONSULTING SERVICE 1.1 Overview of Projects Development Consulting Service 1.1.1 Consulting Service Consulting service is the practice of providing advice to clients for a fee in order to help them solve a particular problem or range of problems within a certain area of business For financial companies, consulting service includes the following forms:  Capital Arrangement Consultancy Financial companies provide the most suitable and effective capital solutions for clients based on their capacity, available resources and their business plans’ feasibility Also, financial companies offer clients the most updated information on capital market’s condition as well as financial tools appropriate to their capital needs  Business Transformation Consultancy Financial companies conduct roadmap for clients’ business transformation (including construction of transformation scheme, new business model, transformation plan, regulations, etc.); assist clients in preparing and completing profiles and documents Besides, financial companies provide consultancy on business valuation in case of equitization  Stock Issuance Consultancy Financial companies provide consultancy on the decision of issuing stocks based on analysis of clients’ business performance as well as capital needs Financial companies can advise or represent clients to deal with relevant organizations and Supervisor: Vu Dinh Hien, Ph.D Pham Hong Tien CQ502663 ... Development Consulting Activities at PVFC 33 2.3 Evaluation of Consulting Activities’ Efficiency 40 2.3.1 Current Situation & Limitations of CDM Projects Development Consulting Activities at PVFC? ??... 2008 to 2011 2.2 Current Situation of CDM Projects Development Consulting Service at PVFC 26 2.2.1 Introduction of Clean Development Mechanism (CDM) 26 2.2.2 CDM Projects Development. .. indicators of consulting activities’ performance Research Scope My research focuses on evaluating the efficiency of CDM projects development consulting activities at PVFC based on specific evaluation