The Voluntary Stage

The submission procedure of CDM project documentation will include two stages: the voluntary stage and the mandatory stage.

The voluntary stage includes development and submission of a Project Idea Note (PIN) for the DNA's consideration and endorsement.

Project participants may develop a Project Idea Note for initial review of the proposed project activity and obtaining the Letter of Endorsement from the DNA based on evaluation results.

There are several purposes of the project initial screening process and the issuance of the Letter of Endorsement such as evaluation of project eligibility under CDM and the national legislation at the earlier stage, improvement of project quality based on the received comments and recommendations, facilitation of contact between potential partners, investors and carbon funds, lowering risks and financial losses for project participants in case of major unacceptability of the proposed project activity, etc.

A Project Idea Note is to be prepared in accordance with the format developed by the Armenian DNA and filled in to the best of the participants' knowledge. Given that many carbon funds have their own mandatory formats for PINs, the Armenian DNA may consider PINs in those formats as well. However, in that case the project participants are to submit also all the specific information requested by the DNA but missing in those formats as a separate file (e.g. availability of water and land use permissions, pre-feasibility, etc.)

Availability of the mentioned supplementary information on the project is preferable but not mandatory for PIN consideration and approval.

A PIN shall be officially introduced to the DNA together with an application letter in which the project participant informs the DNA on its willingness to realise the project under the CDM and requests the DNA to issue the Letter of Endorsement. If the project participant had already identified a potential CER recipient/buyer at the moment the PIN has been submitted to the DNA, this fact should be reflected in the application letter.

However, this latter circumstance does not mean that the availability of a CERs recipient or buyer is a necessary prerequisite for endorsement of a proposed project activity, since the Armenian DNA also supports unilateral CDM projects. Nevertheless, once the project participant has made a decision on CER transfer, its decision should be submitted to the DNA in writing.

Together with the PIN, a project participant may also submit other supporting documents to justify the project and prove the proposal's conformity with the country's sustainable development goals. In particular, these may be supported by recommendation letters obtained from various state and private organisations. During the official evaluation of a PIN, the DNA considers such supporting documentation. Nevertheless, the DNA reserves the right to address to the referee once again in order to obtain a more thorough estimation of the project activity and ensure unbiased references.

Upon the reception of the documents, the DNA Secretariat will check the accuracy of both the PIN and the application letter along with the presence of additional documentation on the proposed project. After that, a relevant summary report will be submitted to the DNA.

Having received the report, the DNA directs the copies of the PIN along with supporting documentation to the two key-ministries, namely, the Ministry of Labour and Social Security and the Ministry of Economiy of RA. Both Ministries will check compatibility of the PIN with the respective social and economic contribution to sustainable development and get back to the DNA with a written assessment of whether they would support the endorsement of the project.

Depending on a project scale and complexity, the DNA may assign experts from the Expert group to perform an additional review of the project. The DNA may also send the document to various sectoral ministries, and agencies, responsible of the specific sector of the project activity, and request their opinion of the project's compliance with the national sectoral strategy.

All comments received from respondents should be collected and analysed by the Secretariat and relevant summary reports should be submitted to the DNA. The final decision on a PIN endorsement is taken by the DNA with consideration of all received feedback.

In case of a positive decision on a PIN, the DNA will issue the Letter of Endorsement to the project participant. The project participant can then continue with further project development and start developing the Project Design Document (PDD). The letter itself is an official document from the DNA stating that, on the basis of the information contained in the PIN and comments received, the further development of the proposed project is supported by the DNA.

At the same time, the DNA endorses the possible CER transfer to the mentioned CER recipient (if the given circumstance has been mentioned in the application letter) as well as further participation of the Host Party's representatives in the mentioned project.

If the submitted project idea receives a negative opinion, the DNA returns the document to the project participant indicating the rationale for rejection and/or necessary improvements required according to the received comments.
PIN endorsement does not guarantee, secure or imply the automatic approval of the proposed project in the future. During the approval stage the PDD will be checked by the DNA regardless of any positive comments or conclusions received during the endorsement stage. This means a project may be rejected in case of not-meeting approval requirements despite having received endorsement.

A sample Letter of Endorsement to be issued by the Armenian DNA for a CDM project is shown below.

LETTER OF ENDORSEMENT

To project participants,

Referring to the request of [company/organization] as a CDM Project Host from the [date and reference number of the letter] with respect to the submitted Clean Development Mechanism (CDM) Project Idea Note on [CDM project title], I inform you of the following.

As Minister of Nature Protection of the Republic of Armenia and appointed Designated National Authority for the CDM under the Kyoto Protocol of the United Nations Framework Convention on Climate Change I declare that:

1 The Republic of Armenia ratified the Kyoto Protocol on 26 December, 2002.

2 Designated National Authority has taken notice of the submitted CDM Project and is aware that the [company/organization] as a Project Host intends to transfer ensuing Certified Emission Reductions (CERs) to [CER recipient company/organization] for the account of [Annex I country].

3 Designated National Authority will assess the CDM Project according to the criteria implying sustainable development and attraction of investments for the Clean Development Mechanism project realization in Armenia.

4 Designated National Authority endorses further development of the CDM Project and is committing itself to render such assistance as may be necessary in the future validation, verification and transfer of the CERs.

5 In case the results from the assessment mentioned above are positive, Designated National Authority will start discussions with the Project Host on distribution of ensuing CERs and will consider to grant a formal approval of the CDM Project that brings about transfer of CERs to the account of [Annex I country], according to the conditions stipulated by the Agreement or Protocol between Project Participants.

Yours Sincerely,
Minister of Nature Protection of the Republic of Armenia and Designated National Authority for the Clean Development Mechanism
under the Kyoto Protocol