althelia ecosphere

Althelia Ecosphere Sustainable land use as an asset class

REDD+, financiamiento e incentivos para negocios productivos

sostenibles en tierras degradadas

Mato Grosso, 21 de Octubre

CONFIDENTIAL - FOR DISCUSSION

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Disclaimer This document is CONFIDENTIAL AND FOR DISCUSSION PURPOSES ONLY and has been prepared for professional

investors by a Sales and Marketing function within Althelia Climate Fund (“Althelia”). This document does not constitute

an offer or a solicitation to engage in any trading strategy or the purchase or sale of any financial instruments. Given its

general nature, the information included in this document does not contain all the elements that may be relevant for a

recipient to make an informed decision in relation to any strategies or financial products discussed herein.

The information and opinions contained in this document have been obtained from sources believed to be reliable, but

Althelia makes no representation, express or implied that that such information is accurate or complete. Other financial

institutions or persons may have different views or draw different conclusions from the same facts or ideas analysed in

this document. Any scenarios, assumptions, historical performances, indicative prices or examples of potential

transactions or returns are included for illustrative purposes only, and we can give no assurance that any favourable

scenarios are likely to happen, that it is possible to trade on those terms or that any potential returns can be achieved.

Althelia is not providing recipients of this document with financial legal, tax or any other type of advice. Certain

strategies or potential transactions discussed in this document involve the use of derivatives, which are complex in

nature and give rise to substantial risk, including the risk of total loss of any investment. Addressees of this document

must understand and agree that Althelia is not in a position to assess whether any of the strategies discussed herein

may be suitable for their financial needs, circumstances or requirements. Addressees must independently make such

suitability assessment, using such professional advisors as they make require. Althelia can therefore not accept any

liability for any direct or consequential losses arising from any action taken in connection with the information contained

in this document.

By accepting this document you agree to be bound by the foregoing limitations.

This document is prepared for eligible counterparties and professional clients only, it is not intended for retail clients (as

such terms are defined in the Markets in Financial Instruments Directive 2004/39/EC (“MiFID”)), and should not be

circulated to any such retail clients.

© Althelia. All rights reserved.


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Indice

Introduccion: algunas informaciones sobre Althelia

I. El Contexto en el campo

II. El Contexto en los directorios de las empresas

III. La Respuesta de Althelia


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Introduction: some Key features of the Fund


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• Luxembourg-approved

• First Closing: June 2013 US$100 million

• Target size: Second closing Dec 2014, US$200 million

• Target portfolio: 20 to 25 investments within 3 years

• Investors: Public and Private organisations

• Very experienced team, with complementary skills

• Demonstrated risk management capability

• Strong ESG model


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The Church of Sweden

Success relying on strong investors and

partnerships with key organisations

I. The context in the field:

• Slush and burn agriculture (subsistence)

• Large commercial conversion (Brazil, Indonesia)

• Inefficient livestock production

• Low-yield crop production

• Lack of incentives for effective regulation

• Lack of access to adapted financial services

• Collateral is a great problem

• Micro-finance is too small

• Mainstream banking is not adapted

. CONFIDENTIAL - FOR DISCUSSION

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The Context in Images


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II. Context in the board rooms: this is now a balance sheet

issues in terms of both risks and opportunities

• Consumers Goods Forum’s members have pledged

zero-deforestation in supply chains by 2020

$2.5 trillion cumulative sales

• 100% of Unilever’s supply chain certified by 2020

• Nearly 15% of global palm oil crop is certified to RSPO

Existing pilots demonstrate that sustainable land

use, improvements in forest management and

forest conservation initiatives can be

economically competitive with unsustainable

‘business-as-usual’ practices

.


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III. Althelia’s enterprise-based response: efficient capital

deployment unlocking multiple value streams


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Purchase of

environmentally

certified

commodities

(FSC, RSPO, etc.)

Supply chain

purchaser

Certified

commodities

(FSC,

RSPO...)

Revenues

Revenues

from ERs

Illustrative example of an Investment

Implementation

Before

(high impact)

After

(low impact)

Env

Impacts

Althelia

Climate Fund

Emission

Reductions

Social

development,

jobs creation

• Investments take the form of loans agaisnt

future flow of carbon credits

• Structured with upfront disbursement

(capex) and commitment to pay-upon-

performance of ERs to meet opex/running

costs (payment for performance)

• Revenues generated from environmental

assets (e.g. emission reductions) and real

assets (e.g. certified commodities)

• Inclusion of strong environmental and

social governance (ESG) covenants

Access to Private Financing for Creating Economic Basis for

Sustainable Development

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ALTHELIA

REDD+ PROJECT

(Communities

Supported by Project

Developer)

Market

Project Activities

LOAN AGREEMENT

Pays Capex

and Opex

Receives

ERs

AGENCY AGREEMENT

% Certified

Commodities

Control & Surveillance

Coffee & Cocoa under

shade (Associativity,

Culture,

Infrastructures, Route-

to Market)

Research

Carbon

Market Access, Profit Sharing and Social Investment

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ALTHELIA

PROJECT

(Community

Supported by

Project

Developer)

Market

Activities

COCOA

Vanilla

Profit Sharing

(CASH FOR

PROJECT)

Carbon Credits

BANANA

CARBON

Timber

MARKET

CARBON CREDITS

CASH

EDUCATION

HEALTH

ENERGY

INVERSION

SOCIAL

WATER

INFRA…

INVESTMENT

RESERVA NACIONAL TAMBOPATA Y EL PARQUE NACIONAL BAHUAJA SONENE EN MADRE DE DIOS


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13

REDD+ project Tambopata Bahuaja

AIDER-SERNANP-ALTHELIA

Sustainable productive activities: Agroforestry

Installation of 4000 ha of cocoa-based

agroforestry

Associativity and route to markets

Reinforcing producers-based

organisations

Creation of social enterprise for cocoa

collection and trading (Coop) and

infraestructures for collection,

fermentation and drying

Complementary actions for REDD +

Scientific Research

Control and survelliance

Biological Monitoring

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Villages in the Buffer Zone

15

0

Guaba 18x18 39

Capirona 18x18 39

Tornillo 27x9 32

Caoba o Cedro 27x27 12

Cacao 3x3 1000

1122

Cocoa-based Agroforestry Business

Installation of 4000 ha of cocoa-agroforestry

plots

1300 Families

3200tm/year certified fine and aromatic

cocoa

US$9.27m revenues/year

Farmers revenues double at Year-5

ACF receives 12% of sales


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Bosque abierto listo para la quema

Sistema Agroforestal – Cacao fino y de aroma


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Barrera de Proteccion del Area Protegida

As a conclusion: Althelia delivers on 4Ps

Policy • Althelia develops news models that can help shaping national and

international policies on climate change and natural capital

Profit • Althelia returns fair profit to its investors, making sure that interest of

all stakeholders are aligned


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People • Althelia invests to provide food security, local development and

poverty alleviation

Planet • Althelia invests to mitigate and adapt to Climate change impacts,

preserve ecosystems and biodiversity

Juan Carlos Gonzalez Aybar

Partner

Director, Latin America

[email protected]

Althelia Climate Fund is a Luxembourg SICAV-SIF (Specialised Investment Fund), regulated by CSSF

(Commission de Surveillance du Secteur Financier) under the SIF Law of 13 December 2007 and

registered in Luxembourg under R.C.S. Luxembourg 166.125


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