Sicirec Group Making profit with nature conservation

Profitability

Poverty alleviation Biodiversity preservation

1991: Sicirec founded

Consumers organisation

Investment Management

Trading platform

2007: Company reorganisation

Own plantation forestry projects

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Land use: Spatial mix:

Economic land use & Nature conservation

(maintaining / restoring coherent ecological networks)

Production areas: 100% financial profitability

Conservation areas: 100% maximum values for nature

Deal: Cheap financing, profit and livelihood improvement

in exchange for

Setting aside % of land property for nature conservation

The Sicirec Formula Si

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Restoring, sparing and protecting ecological network structures

Ecological zones and corridors with a target of

100% climax vegetation

No focus on multiple land use

Ecological structures on every level: • stepping stones • ecological connections • regional and national ecological

corridors

The Sicirec Formula

Financing profitable productive areas in exchange for

permanent protection of interwoven ecological zones

Population explosion

Ubiquitous colonisation

Cash is king

Unstoppable economic forces

Difficult to prevent larger virgin areas from being exploited

Why ?

Clear spatial distinction between protected ecological zones and productive areas

Finance profitable projects in productive areas

Create legal permanency of preservation of coherent ecological network structures

How ?

• Spatial integration of productive and protected areas

• Creating opportunities for investors to make a profit from the preservation of nature by means of conditional funding

Result:

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The Sicirec Formula in practice: ArBolivia

Sicirec:

Financing, technical support, organisation

Payment for labour and fair trade timber prices

Create enduring livelihood improvement

Smallholders:

Land & labour

Permanent conservation - 20% - 30% of the project area

Net timber revenues split 50% - 50%

Equity investments

Carbon credit sales

Tree planting subsidy certificates

Other environmental services, such as REDD

Low interest Green Loans from Dutch Green Funds

Financing method Si

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Financing ingredients create very good IRR upside

High IRR for investors for 40 years

Land use plan for whole of Smallholders’ property

Smallholders paid from the start

Access to microcredit facilities

Investors and smallholders each 50% of net timber revenues

Livelihood improvement

Restoration and conservation of ecological networks

Profitability for all parties Si

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Lasting preservation of biodiversity

Securing permanency of ecological network structures

Method of financing is structural and lasting

Anchored in land use planning

Permanent legal protection for ecological infrastructure

Involvement of

• Local people • Local authorities • (regional) Government

Education

Ecological awakening on all levels

7,200 hectare plantation forestry project

Start of the project in September 2007

Predominantly indigenous tree species (18+ species)

5,000 hectares forest plantations

1,000 hectares agroforestry

1,200 hectares permanent nature conservation

The ArBolivia project Si

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Cooperation with smallholders and farmers federations

Smallholders’ commitments legally secured

Payment for labour

Fair trade mechanism:

50% of net timber price secured by project >> 100% local timber market price

Micro credit facility – trees as collateral

10% bonus payment through cooperatives

Long term commitment Si

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20% of net revenues for management

1,000 smallholders contracted

Project officially certified as “Green Project”

First PDD registered with UNFCCC January 2009

Total of $ 3.0 million invested to date

1,600 hectares forest plantations planted

140 hectares agroforestry

290 hectares of nature conservation

Current status ArBolivia project Si

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Total project costs $ 17.2 million

$ 3.0 million covered

$ 7.0 million to be financed with green loans

> $ 3.4 million CO2 credit sales & tree planting certificates

< $ 3.8 million needed from equity investors

Current status Financials Si

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Financing ingredients create very good IRR upside

Extension of ArBolivia project

Smallholder projects, but also projects covering larger expanses

Opportunities for similar projects

Also in other countries and continents

Additional income from REDD

Liquidity for equity investors

First additional project in Ghana, west Africa

Future Si

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www.arbolivia.org www.sicirec.org