Sustainable Financing for Forest & Landscape Restoration
17th February 2016
Deforestation and land degradation threatens the livelihoods, wellbeing, food, water, energy security and resilience of millions of people around the world. Over two billion hectares of land – an area the size of South America – are currently degraded, with a resulting loss of fertile soils, biodiversity and carbon stock. The Forest and Landscape Restoration Mechanism (FLRM) is working to help countries restore degraded landscapes by identifying and implementing practices that restore a balance of the ecological, social and economic benefits of forests and trees within a broader pattern of land uses.
The Forest and Landscape Restoration Mechanism (FLRM), FAO and the Global Mechanism of the UNCCD (http://www.global- mechanism.org/content/forest-and-landscape-restoration) have joined efforts to facilitate dialogue and improve the investment scenario for Forest & Landscape Restoration, as well as publish a discussion paper on sustainable financing for FLR, which features EcoPlanet Bamboo.
Investment into Forest & Landscape Restoration remains a critical barrier to the scaling up of current efforts at all levels, regional, national and international. Mobilizing the private sector in restoration activities needs to be stressed as fundamental for success - this has been an underlying theme of the developments in Forest Landscape Restoration. EcoPlanet Bamboo has been repeatedly highlighted as a private sector example of how multiple environmental and social goals can be integrated, while still achieving financial returns and timeframes required by traditional investors.
Throughout workshops, roundtables and within a document recently published by the UNCCD, EcoPlanet Bamboo has been highlighted as a private sector example of how business can achieve these targets. During a series of roundtables EcoPlanet Bamboo has stressed the need for increased collaboration between the public and private sector to faciliate a scaling up of investment into Forest & Landscape Restoration.
“Restoration projects often have high up-front costs and long timelines to reach profitability. Using public and/or non-profit finance for the first few years can help them obtain traditional private-sector investment and become competitive on the financial marketplace.” −EcoPlanet Bamboo
Furthermore EcoPlanet Bamboo's acquisition of political risk insurance on the company's investment in Nicaragua and South Africa has been highlighted by the UNCCD as one mechanism by which the private sector can be encouraged to invest in higher risk Forest & Landscape Restoration projects.
Example of a guarantee mechanism: the Multilateral Investment Guarantee Agency and EcoPlanet Bamboo
in Central America and Southern and West Africa:
EcoPlanet Bamboo has undertaken the restoration of degraded land into commercial bamboo plantations using a landscape-scale approach. The projects undergo rigorous certification (Forest Stewardship Council [FSC], Verified Carbon Standard [VCS], Climate Community and Biodiversity Alliance [CCBA]). Projects occur in countries with a high perceived risk from an investment perspective. The Multilateral Investment Guarantee Agency (MIGA):
• provides a USD 48.8 million guarantee against EcoPlanet Bamboo’s current investment inNicaragua;
• provides a USD 8.6 million guarantee against one of EcoPlanet Bamboo’s current investments in South Africa.
The 15-year policy covers the project against political risk including expropriation, war and civil disturbance. MIGA has showcased EcoPlanet Bamboo’s Nicaraguan restoration projects through a series of articles and documentaries, showcasing the company as an example of the private sector having positive impact on the environment every year since 2013.
Despite these developments and the increasing focus on the need for scaling up Forest & Landscape Restoration, investment barriers remain.< Back to news < Download article