Post on 22-Apr-2023
Promoting Private Sector Investments in Sustainable
Forestry
Expert Workshop on Financial and
Institutional Innovation for Reducing
the Risks of Private Sector Investments
in Sustainable Forestry
Workshop Report
Solsona, 21‐22 April 2016
1
Content:ExpertWorkshoponFinancialandInstitutionalInnovationforReducingtheRisksofPrivateSectorInvestmentsinSustainableForestry
Glossary ......................................................................................................................................... 2
Introduction .................................................................................................................................. 3
Background ................................................................................................................................... 4
Report on the first day of the workshop ....................................................................................... 5
Session I: Inauguration .............................................................................................................. 5
Session II: Sharing good practices and case studies .................................................................. 8
Investor level perspectives ........................................................................................................ 8
Project level perspectives ........................................................................................................ 12
Session III: Group Work on identifying gaps and defining innovation needs .......................... 17
Summary of discussions Group 1: Investors and Bankers ................................................... 18
Summary of discussions Group 2: Project Developers and Forest Communities ................ 19
Working Groups Reports and plenary discussion: ............................................................... 20
Report on the second day of the workshop ................................................................................ 21
Session IV: Institutional mechanisms including partnerships and alliances ............................ 21
Session IV (2nd part): Enabling environment for risk mitigation and management ................ 27
Session V: Way Forward – Roadmap for an effective community of practice ........................ 29
Final considerations ............................................................................................................. 32
Annexes ....................................................................................................................................... 33
Annex I. Detailed program ....................................................................................................... 33
Annex II. List of Participants .................................................................................................... 35
2
Glossary
AFD/FFEM Agence Française de Développement ‐ Fonds Français pour l’Environnement Mondial
AfDB African Development Bank
AGF Advisory Group on Finance
AsDB Asian Development Bank
CAF Latin American Development Bank
CBA Cost‐Benefit Analysis
CFS Committee on World Food Security
CFS‐RAI CFS Principles for Responsible Investment in Agriculture and Food Systems
CIFOR Centre for International Forest Research
CPF Collaborative Partnership for Forests
CSR Corporate Social Responsibility
EFI European Forest Institute
ESG Environmental, social, and governance
FAO Food and Agriculture Organization of the United Nations
FAST Finance Alliance for Sustainable Trade
FDI Foreign direct investment
FFFs FAST Financial Affairs
FLR Forest and Landscape Restoration
FSC Forest Stewardship Council
FSPs Financial Service Providers
GEF Global Environment Facility
GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH
GM‐UNCCD Global Mechanism ‐ United Nations Convention to Combat Desertification
HNWI High Net Worth Individuals
IWC International Woodland Company
LDN Land Degradation Neutrality
MIGA Multilateral Investment Guarantee Agency
MRV Monitoring, reporting and verification
NGO Non‐Governmental Organisation
ODA Oversees Development Assistance
PPP Public Private Partnership
PROFOR Program on Forests
PwC PricewaterhouseCoopers
REDD+ Reducing Emissions from Deforestation and Forest Degradation
SFM Sustainable Forest Management
SIAs Sustainable Investors Associations
SMEs Small and medium‐sized enterprise
TIMO Timberland investment management organization
UNCCD United Nation Convention to Combat Desertification
UNCTAD United Nations Conference on Trade and Development
USAID United States Agency for International Development
WBCSD World Business Council for Sustainable Development
WWF World Wildlife Fund
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Introduction
This report contains the proceedings of the Expert Workshop on
Financial and Institutional Innovation for Reducing the Risks of
Private Sector Investments in Sustainable Forestry, held during
21‐22 of April 2016 in Solsona, Spain. The two‐day Expert
Workshop was organized by FAO in collaboration with the Forest
Sciences Centre of Catalonia (CTFC) and other development
partners.
Key stakeholders from various fields including impact finance,
private banks, insurance, development banks, forest and
landscape enterprises, etc. had the opportunity to share
knowledge and experiences on existing and future potential
financial and institutional approaches to mitigate and manage
risks to promote investments in the forest sector. The gathering
of experts also provided an opportunity to establish a community
of practice for long‐term knowledge and experience sharing on
this topic, and to promote synergies for collaboration.
For the detailed list of participants of the workshop, please see
annex II.
The workshop brought together 26 participants from 14 different
countries. The first day of the workshop focused mainly on
presentations about good practices and lessons learned, ending
with a working‐group session where gaps and innovation needs
were discussed. The second day was dedicated to institutional
mechanisms including partnerships and alliances. A final session
took place on future proceedings, resulting in first elements of a
roadmap for an effective community of practice.
For the detailed program of the workshop, please see annex I.
The main objectives of the
workshop were:
i. Presenting,
benchmarking and
analysing the existing
financial and institutional
risk mitigation and
management strategies.
ii. Specifying (or stating,
clarifying) risk categories
and analysing potential
gaps with the above risk
mitigation and
management strategies.
iii. Defining
recommendations based
on lessons learned on how
to innovate for financial
and institutional risk
mitigation and
management strategies.
iv. Launching the process of
designing policy and
technical guidance on how
to effectively establish risk
mitigation and
management strategies‐
including developing an
outline of the publication
on this subject.
4
Background
This workshop was organized in the framework of the Food and
Agriculture Organization of the United Nations (FAO) led initiative
on “Financial and institutional risk mitigation and management
strategies”. This initiative stems from the lack of significant funding
for the forest sector in key areas of intervention such as forest
plantations, natural forest management, small and medium forest
enterprises, local and community forestry, and large‐scale forest
investment projects including REDD+, while private capital is
available for investments. Underlying efficient business models can
bring substantial financial returns to investors in all these activities,
but many traditional investors are still reluctant to invest.
One of the barriers to more private investments is the wide range of
(real and perceived) risks associated with forestry. Political, socio‐
economic, market, weather and climate risks are some of the reasons
why investors hesitate to invest in the sector. According to FAO and
GM‐UNCCD (2015) more than USD 300 billion are needed per year by
2030 to achieve the land degradation neutrality target (SDG 15.3) for
which the forestry sector will be a major contributor. However, in the
absence of suitable risk mitigation and management strategies, it will
be difficult to mobilize the scale of resources required.
While some risk mitigation and management strategies exist at the organizational level and at the
biophysical level (e.g. resistant and resilient tree species, mixed cropping systems, climate change
adaptation strategies), at the financial and institutional levels they are still underdeveloped. Much
less attention has been paid to the identification, development and application of these strategies.
Potential financial losses at stake in the forest sector are manifold: loss of capital (trees, soil, etc.,),
loss of revenues from wood and non‐wood forest product value chains, default payments, and
market and price fluctuations are some examples of risks that require mitigation. In this context,
some of the existing key risk mitigation approaches worth exploring include: credit guarantees and
credit enhancement, due diligence and assurance, portfolio diversification, private sector insurance
(political and commercial risks), public sector insurance (political risks), securitization as well as the
development of buy‐back agreements. Other important approaches for reducing financial risks
include related government policies (backed‐up by laws) and investment support services to private
stakeholders and partnerships or platforms for standardization of investment proposals. Further,
relevant examples from agriculture and other sectors could also serve as good entry points for
exploration and adaptation.
However, current information on existing as well as potential financial and institutional risk
mitigation and management strategies in forestry is limited. Lack of opportunities for sharing of
knowledge related to successful examples within and across nations is further constraining effective
expansion and adaptation of suitable strategies elsewhere. The goal of the proposed initiative, being
led by FAO and other development partners, is to specifically address this policy and knowledge
gap.
Objectives of the
initiative
i. Review, analyse and
identify potential
financial and institutional
risk mitigation and
management strategies
to scale up sustainable
private sector forestry
investments.
ii. Promote global,
regional and national
understanding/mainstre
aming of identified
innovative strategies.
iii. Drawing on the above
inputs, develop policy
and technical guidance
on financial and
institutional risk
mitigation and
management.
5
Reportonthefirstdayoftheworkshop
The first day of the workshop took place at CTFC’s headquarters and consisted of 4 inaugural
speeches, 9 expert presentations from 9 different organizations, and a work group discussion
among all participants. Expert presentations referred to good practices and lessons learned in
existing financial and institutional risk mitigation and management strategies, from investor
level and project level perspectives. The goal of the work group was to identify and analyse
potential gaps and define innovation needs.
The presentations were grouped in three sessions (I, II, and III) with lively interactions of the participants (questions, answers, and comments between the audience and the speakers). The list of countries, organizations, and contact information of the speakers can be found in Annex II.
SessionI:Inauguration
The session was opened by Mr. Denis Boglio,
Executive Director of CTFC, and Mrs. Thais
Juvenal, the Team Leader of Forest Economics
and Governance of FAO. Both welcomed the
participants and underlined the importance of
the subject for the future of sustainable
forestry.
What do we mean by sustainability? What
different activities are involved? With these
two open question, Mrs. Juvenal put emphasis
on the need to support countries and forest
industries with the overall goal of promoting
private sector forestry investments.
She also explained that FAO is engaged in supporting countries in order to help them achieve
their sustainable development goals and build forestry capacities. She also remarked that we
need to work while keeping development green and
sustainable.
From FAO, there were two presentations in the inaugural
session. First, by Mr. Rao Matta, Forest Financing Officer,
and the second by Mr. Ludwig Liagre, Forest and
Landscape Finance Specialist.
1. Mr. Denis Boglio and Mrs. Thais Juvenal in the Inauguration Session
“We need to be able to
support the dialogue
with the private sector”,
Mrs. Thais Juvenal
6
Objectivesandrationale,byMr.RaoMatta,FAO “Mobilizing Private Sector Forestry
Investments: Innovative Strategies for Risk
Reduction and Risk Management”, Mr.
Matta’s presentation started with putting
on the table the great paradox that
currently entails investing in forestry:
there is immense potential for investment
yet on the ground investments are scarce.
He talked about the growing importance
of investing in forest products and
services, in the context of climate change
and green development policies. “How can
we face these challenges and promote
better and bigger forestry investments? There are however new developments and new
possibilities. The political significance of forests also has increased. Mr. Matta also provided
examples of a FAO study demonstrating significant regional variation in forestry investments,
like Latin America where there is substantial investment, contrasting it with that of Africa, where
there has been less investment so far.
He then presented some of the major barriers to investments which include high risk and
uncertainty. One of the objective of this meeting ‐ he said ‐ is to bring out successful cases of
private sector investment and share this knowledge and continue to fill the information gap
among countries and key stakeholders. Presenting and analysing the existing risk mitigation and
management strategies is an initial step in that direction to promote a better understanding on
the major risk categories areas, including the gaps in the current strategies.
Expectedresultsandshortintroductiontothebackgroundpaper,byMr.LudwigLiagre,FAO Based on the “contribution forms” filled out by participants before the workshop, Mr. Ludwig
Liagre pointed out to the main work lines for the future, to be discussed:
Table 1 Work Lines to be discussed. By Mr. Liagre
Knowledge development and sharing capitalization
Products development Community of practice / Expertise hub
Acquire wide view of the different investments possible, address the emergency needs in the developing countries
Need to develop new products from the forest side. Elaborate
a good framework for the forest start‐ups and engage
private investors
Build a global roadmap or community of practice to exchange knowledge and increase communication
between involved stakeholders. Also at small scale, support
communication between forest exploitations/stakeholders in
the same region
2. Mr. Rao Matta and Mr. Ludwig Liagre during the Inaugural Session
7
Mr. Liagre also introduced the background document and ideas for a future technical paper (see
Annex III). He highlighted the need to develop a technical paper with a highly critical and analytic
point of view. “This document will be created through collaborative work, engaging also the
private sector and global institutions.”
Relating to emerging issues, Mr. Liagre encouraged the participants to think about how to
involve all stakeholders and increase the communication between them. The same way, he
explained the necessity of a common roadmap, and to build a community of practice for sharing
lessons learned, needs and challenges.
Comments:
“There are hundreds of pages
in Google talking about this
topic. It will be helpful to be as
open minded as possible to
select all the information
available. Years ago it was
easier to get in detail but now
it’s really difficult. How can we
address these problems? What
should be the communication
tools?”
“The aim of this Workshop
should be about financial
instruments and better
institutions practices to
minimize the investment risk
in the forestry sector. This is
really a big subject.”
“Which is the strategy? The
most important thing is to
have sustainable financial
tools to keep evolving. The
most important thing is to
brainstorm and look ahead.”
“We would like simplify the
complexity. We need to find
this communicative language
to help us work easily. This
should be a key focus of this
workshop. “
“We should mix the investors
and the project managers.”
“Publications are really
important, we’ll do our best
and try to help and address
communication mechanisms
to make our work available to
a wide public and keep
evolving. “
“Let’s suggest another kind of
communication initiatives”
“This technical paper will
attract investors (that’s why
we are here)”
“FAO is a traditional and
technical agency… Our
traditional products are
papers to motivate
discussions and to generate
dialogues and meetings and
communicate these
conclusions to governments.”
“The world is changing and
FAO is changing as well.
Nowadays, a technical paper
is not the aim, it is just to
support the development of
tools that could show the
feasibility of investments.”
“Let’s begin to design concrete
activities related to market
gaps.”
“I’m very keen to have simple
instructions to point people in
the right direction. “
“Give me a good reason to
invest! We have to talk about
important things. This is what
investors must know.”
“Investors want to meet
people, and later meet the
forest. This is the correct order
and the correct way of doing
the things.”
“Who are the real target
groups? Who must we
address these sessions to?
Investors are really investors
because they like taking
risks. We have the
communication challenge of
presenting forest‐related
risks to investors.”
8
SessionII:Sharinggoodpracticesandcasestudies
The aim of the Session II was to share good practices and case studies, either from investors’
or from projects’ level perspectives.
Investorlevelperspectives
Buildingpartialriskmechanisminsupportofthe20X20InitiativeandpartnerimpactfundsbyMr.OctavioCarrasquilla,LatinAmericanDevelopmentBank(CAF)
Mr. Carrasquilla started his speech by explaining the Forest Program, of the CAF? which main
objective is to strengthen the development of Forestry and Forest Conservation through the
implementation of green economy, so as to allow member countries to migrate to low‐carbon
and climate resilient economies with social inclusion. The program has CAF financing and the
support of other strategic partners, private enterprises, and governments. It is structured in five
components, one of which is Restoration and Recovery of Degraded Lands and Forests.
Initiative 20x20 is a country‐led effort to bring 20 million hectares of land in Latin America and
the Caribbean into restoration by 2020. This initiative is a good regional example of how to
enable a positive environment for private sector investments.
CAF is setting up a partial risk guarantee mechanism offering coverage of risks taken by private
equity impact funds engaged in the Regional Initiative 20x20. This is based on certifications
adopted for the projects, the Initiative 20x20 and the due diligence of CAF.
3Projects’ scheme of the partial risk guarantee mechanism. Source: Mr. Octavio Carrasquilla
9
FinancingmechanismforsmallscalecooperativesandCSRstrategyinforestinvestmentsinMorocco,byMariemDkhil,CreditAgricoleduMaroc(CAM)
Mrs. Dkhil talked about 2 different financing mechanisms:
‐ Financing through "Tamwil El Fellah", a finance company created by Crédit Agricole du
Maroc (CAM) in partnership with the Moroccan state. Tamwil El Fellah was created in
order to give access to finance for farmers who are excluded from traditional bank
financing because of collateral insufficiency. Thanks to a guarantee fund that partly
covers the risk, Tamwil El Fellah provides financing to small scale forestry cooperatives
that produce NTFP.
‐ Financing through CAM for forest cooperatives that have a contract with the Moroccan
High Commission for Waters and Forests to sustainably exploit forest resources. This
partnership between the bank and the public sector ensures:
o a sustainable use of the resource: extracted resource is controlled by the
Commission,
o and risk mitigation: mainly because the exploitation contract between the High
Commission and the cooperative is renewed only when overdue credits are
paid.
This partnership works as follows:
Table 2 Financial mechanism for forest cooperatives, by Mrs. Dkhil
Risk mitigation Resource sustainability Economic sustainability • Hypothecation of goods • Direct payment to the beneficiary (NFF, township, etc.) • Contract renewal is subject to the payment of overdue credits
• Endorsed by the HC through the tender / contract system
• Increased profitability: lower transaction costs (no intermediary), better control over sale prices • Improved governance for the cooperative
Portugalvs.Australia:thedifferenceinforestryriskmitigationstrategiesandkeytakeawaysfrominvestors’perspective,byCarlaWadewitz,BANIFInvestmentBank
Mrs. Wadewitz, from the BANIF Investment Bank, covered in her presentation different
approaches between Portugal and Australia in terms of forestry risk management practices and
key takeaways. She also talked about the key issues that private investors like to know before
taking any forestry or agro‐forestry investment decisions and also exposed the differences
between Portugal and Australia regarding this aspect.
10
4 Australia and Portugal have one thing in common: wildfires
The starting point was wildfires: one thing Portugal and Australia have in common. With regard
to the Investment Bank of Portugal, Mrs. Wadewitz explained that they tend to keep bridges
between Portugal and Australia in the forestry investments risk. They are trying to fight forest
fires, working hand in hand with forest communities, and associations. They have reduced the
number of fires significantly and keep analysing the potential risk of forestry fires.
Concerning the private investors’ rationale, Mrs. Wadewitz also raised the question if it was just
about fire protection, or if the numbers were the most important variable. She linked this idea
with an extensive list of at least 20 criteria (exs: landownership distribution, certification, agro‐
forestry diversity, financing conditions, existence of forestry communities & associations, etc.)
to be used as an integrated assessment methodology for the investment and sustainable
management of long term assets such as forestry or agro‐forestry.
As a final conclusion, Mrs. Wadewitz encouraged players like FAO and CTFC to help
national/local/regional private investors in some of the investment criteria, like:
‐ Web based database for private investors;
‐ Interaction with national governments on key issues (ex: land ownership) for worldwide
harmonization;
‐ Interaction with Project developers for sourcing pipeline;
‐ Interaction with Google/ESA for integration of satellite tools into the platform to help
investors minimize costs and have a clear idea of the investment.
Takethemoneyandrun;whentohandthemoneytoavoidtherun,byFrancescaNugnes,FinanceAllianceforSustainableTrade(FAST)
Mrs. Nugnes’ speech was divided in three arguments: (1) Increasing chances for investors to be reimbursed (2) A triangular financial product (3) The role of public money.
Reminding the importance of waiting for market prices to get better, and to provide a loan long
enough to enable the enterprise to freely negotiate the next harvest prices, Mrs. Nugnes also
reminded key questions:
‐ Investing own money, not borrowed down‐payment
‐ Being flexible
‐ Incorporating all dimensions of risk (social, environmental and financial)
‐ Diversifying the source of information
‐ Collecting, storing and analysing the Impact Investment data over time
‐ Attracting new investors
11
To reach the objective of mitigating risk, Mrs. Nugnes proposed a 3‐actor group: investor,
enterprise, certification agency / investor, enterprise, technician / investor, enterprise, buyer,
etc. Also the number 3 appeared on the recommendations: on the one‐hand, co‐invest: finding
partners and join forces will establish and increase dialogue between policymakers and private
investors. On the other hand, the presence of public money in the financial product facilitate
start‐up projects. And finally, she recommended face‐to‐face meetings by going on the field.
Finally, Mrs. Nugnes encouraged investors to assume all dimensions of risk to have also the
complete dimension of revenues.
Forestinvestmentrisks–perspectivesfromrecentprojects,byChrisKnight(PWC)
Mr. Knight, representing PwC as Assistant Director, Sustainability and Climate Change, talked
about how to reduce risks through the following points: 1) regional economic development
(RED); 2) better research; 3) focusing on revenues, returns and reduced costs of capital; 4)
retrospective processes; 5) resilient financial systems.
Mr. Knight explained that PwC and its clients are helping local communities to develop their
business models with small loans, and is also contributing to connect rural developers with
experts in order to make the projects work.
Furthermore, Mr. Knight highlighted the necessity to promote
realism: “We need to promote realism, to donors and investors,
and not expect to have big results after two years of funding. What
we can expect is to have cooperation and partnerships and
mobilisation in a certain local or regional area.” Another
important request was the need to educate investors and bring
them closer to technicians with knowledge as well as the actual
field reality.
The audience wondered how to connect these actors with business, and remarked that we must
focus on the foresters rather than on forest communities because business is not made for forest
communities but for foresters. Also the lack of communication between forest communities and
banks was highlighted: “Forest communities do not typically have the means to come to banks
asking for loans”. This lack of communication affects the public authorities: “The public authority
has no real idea of how investors are needed”, was also noted from the audience.
“There is some ignorance
in the finance sector on
forestry opportunities”,
Chris Knight
12
Projectlevelperspectives
Lessonslearntfromprojects’duediligenceandvaluation,byChristianHeld,UNIQUEForestInvestmentDivision
Mr. Held, from the international consulting firm UNIQUE – Forestry and land use, addressed
these questions in his contribution:
1. How to avoid / mitigate financial risks in forest investment projects?
2. How to balance quality of plantation management vs needs to expand planted areas in
the face of limited financial resources (site‐species‐market approach)?
3. How to create benefits from a management team combining forestry and financial
expertise?
He also brought good practices and case studies from the project level perspective, and talked
about the financial risks:
Related to technical and operational
management
Inherent to project design, frequently resulting
in downward spirals and "stranded" projects
External financial risks
Relating to technical and operational management risks, Mr. Held explained that these risks can
be addressed by smart approaches. On one hand, mitigating them through project design and
operation. On the other, through due diligence. The main factors affecting the internal rate of
return are timber and biological growth. Thus, "performance comes first" when designing and
implementing investment projects.
Mr. Held finally provided a table about rules for project level financial risk management:
“Risk mitigation involves
costs”, Christian Held
5 Lessons‐learned table, by Mr. Held
13
TheNicaforestReforestationPilotPrograminNicaragua(NRPP),byØyvindBerg,AcrossForest
Mr. Øyvind Berg brought the example of the Nicaforest Reforestation Pilot programme (NRPP)
in Nicaragua. This programme is managed by Across Forest AS, Nica Forestal S.A with the
assistance of the international forestry management group Brinkman & Associates. This project
will show investors the possibility of creating value by planting trees in deforested lands in
Nicaragua.
So, as Mr. Berg said, this is a reforestation programme but
also a long‐term investment. Nicaragua is the second
poorest nation in the region after Haiti. After decades of
political instability, the country has achieved a remarkable
economic turnaround and is now focusing on innovative
ways of reducing poverty. The objective of this programme
is directly related to the idea of creating value for rural
communities and helping these poor areas.
The Nicaforest Reforestation programme started as a pilot
activity, with a small plantation. Nowadays there are 9
clusters reforesting land at municipal level, overlapping 20 different forestry initiatives. The
project is FSC‐certified, has a Gold Standard in pipeline, a clear strategy to support planting up
to 20.000 ha. and has become a bankable project with an excellent Rol opportunity.
Mr. Berg showed the GPS techniques to identify the most valued areas combining reforestation
areas and good growth conditions. This, as Mr. Berg remarked, is an important issue to take into
account before starting a plantation activity.
Another highlighted point was the leasing of the lands. Mr. Berg told to the audience the
advantages of sharing benefits by using Benefit Agreements with landowners. This will make the
project achieve a higher impact. This way, landowners become investors too.
The main challenge for a reforestation program like this is that it represents a very long term
investment (20 years). Investors are not offered an exit at an earlier stage. For most investors
this is beyond their investment horizon. Therefore, in order to attract investors to forestry
investments, which always will be long term, one should develop a set of mechanism that early
investors are offered an exit after year 5‐7 when commercial thinning start generating cash, and
maybe another liquidity event and/or resale at year 12‐14 when the plantations are reaching
their break‐even. This again indicates that a plantation may be sold and resold many times over
its life span.
6 Key success factors for growth in plantation. Source: Ø. Berg
14
PlantationInvestmentsinAfrica:drivers,obstacles,gaps,casestudy,byPetriLehtonen(Indufor)
Mr. Lehtonen, from Indufor, showed the African panorama in terms of forestry investments. He
began the speech asking the following questions: “Why there are no investments in Africa
despite really good opportunities there? Anyway, the industrial wood has kept growing. Where
do these investments and funds in Africa come from?” He displayed detailed data to show the
problems related to forestry investments on this continent. He brought answers to the following
questions:
Why investors are not investing and financiers not funding plantation development (in Africa)?
‐ Local investors and financers are opportunistic
‐ Strategic investors are facing barriers to entry
‐ Financial investors have demanding investment criteria
‐ Development financing required to create enabling conditions
Major obstacles:
‐ Land tenure and Land use
‐ Industrial Infrastructure – Integration to value chain and markets
‐ Technology and Productivity
‐ Financing Gaps
Mr. Lehtonen provided two Take‐home Messages packages:
Take home message (1)
‐ Global megatrends, regional demand and diminishing natural forests call for
investments in forest plantations and wood processing industries in Africa.
‐ Forest plantations are an important vehicle to improve living standards create
employment and reduce poverty.
‐ Operating environments are rapidly improving in many African countries
‐ Stakeholders in forest investments have many reasons to follow Africa closely and take
actions.
Take‐home Messages (2)
The key question is to manage and mitigate the unique risks
‐ Commitment required on national and local level.
‐ Appropriate technology, scale and logistics in place.
‐ Develop secure market channels.
‐ Proof of good performance in Africa.
15
Innovationstocreditforlong‐terminvestment:theCIDREcaseinBolivia,byMr.NiclasBenni(FAO)
Mr. Benni talked about the CIDRE (Development Finance Institution) and its important role as a
risk mitigation tool across the forestry harvesting value chain. The CIDRE study is part of a
compilation of case studies on “Innovative Risk Management Strategies in Rural and Agricultural
Financial Markets” in Latin America.
CIDRE offers a wide range of lending services (credits and loans). He presented the “Credit for
forest plantations” which is a credit committed to finance the establishment, management and
use of a planted forest on the part of the smallholder. It is really important to evaluate,
certificate and acknowledge the ownership of the forest plantations and the continuous
evaluation of the entire project.
This is directly related to the technical assistance provided by CIDRE, which is one of the key
expertise of this entity. Mr. Benni remarked that CIDRE is the 3rd largest loan provider for rural
underdeveloped areas and they are still growing while trying new systems, for example in
Bolivia.
He also provided some key considerations to take into account:
‐ CIDRE’s expertise and international advantages in the forestry sector made it possible
for them to develop an effective alternative form of guarantee for smallholders, which
allowed it to mitigate the risks associated to lending higher amounts for longer terms in
rural context.
‐ The combined contribution of various elements (valuation and certification, technical
assistance, specific profile of credit officers...) made it possible to develop a highly
effective product that was adapted to smallholders’ requirements.
‐ The regulatory framework of the Bolivian financial sector was determinant for CIDRE’s
success in implementing its credit model, since it gave legal validity to alternative
options for guarantees.
Although nowadays CIDRE’s provision of credit to forest plantation is currently frozen due to
modifications in the overall financial regulatory framework, the hope is that its experience could
lead the way for similar innovations in other parts of the world.
Insuranceandothereconomicinstruments,byPhilCottle(PardusUnderwriting)
Mr. Cottle brought the insurance companies’ vision, representing PARDUS, a global forestry
insurance provider. Mr. Cottle made a point differentiating risks according to the perception.
For investors, he said, risk is high, but for forest managers risk seem to be lower. He highlighted
the need to bring over this different perspective to directly deal with the real risks. “All is about
perception”, he said.
16
His speech was also focused on the nature of timberland investment risk and he provided
relevant information related to the climate change and wildfire risks and trends: from
Dlugolecki, A. et al. (2009), the results of a 2009 study of unusual temperature events showed
that what was a historically 10‐year event, now occurs every 2,7 years; a 20‐year event occurs
every 4,3 years, and the return period for a 100‐year event has become of just 12,5 years.
Mr. Cottle finally provided some insurance observations to take in consideration:
‐ Little understood therefore ignored as a tool for investors.
‐ Risk is more about perception often than actual exposure.
‐ Perceived risk is high for investors and low for forest managers.
‐ Simple mechanism. Protects returns to the enterprise.
‐ Corporations may insure for share price.
‐ Investors may insure for market place advantage in addition to increasing risk being
experienced.
‐ Insurers have greater knowledge about risk severity and frequency than investors or
forest managers (consider natural hazard discount rates).
‐ When fires start (authorities protect life and property first before forests (Canberra Fire
2003).
‐ Tight budgets mean fire protection often limited.
He also presented the different types of risk coverage related to the forestry sector, and the
recent changes in the forestry insurance products. Among them, Mr. Cottle presented new
products developed by Pardus in 2015, Value@Risk.
With Value@Risk, forest is re‐evaluated based on: gross values
less expected salvage. Mr. Cottle defended the importance of
discussing and developing the Value at Risk table for the
timberland, as it may be modified for fire or wind effects.
“Which losses can you
afford?”, Phil Cottle
17
SessionIII:GroupWorkonidentifyinggapsanddefininginnovationneeds
Session III opened the stage for enhanced investments in forest and landscape restoration. Two
groups were formed in order to discuss guidelines for reaching future goals commonly. The aim
was to take into account different points of view and perspectives: (1) Investors/Bankers
(stakeholders with large financing capacities), and (2) Project developer/Forest communities
(stakeholders who need financing)
They were asked to review the following issues:
- Risks and challenges: Barriers, constraints, costs.
- Gaps: Understanding/knowledge, data, tools, communications, governance, policies.
- Priorities for change: Actions, solutions, innovations, reforms, etc.
7 Participants were invited to form two groups for the discussion. Source: Ludwig Liagre
Group 1
Group 2
18
8 During the Work Group
SummaryofdiscussionsGroup1:InvestorsandBankers
“There is a lack of quality
projects, certified projects
and also more types of
certification”
“How can we find business
cases? There aren’t”
“We need a whole
extensive service, facility
“Is forestry too much
fragmented? Processes
can help to aggregate”
“We need to find a way to
go over the gap between
formal and informal
governance”
“What’s happening inside
and outside projects?
Take care on ethical
issues”
“Financers don’t know
about forestry (or maybe
they’re not willing to)”
“There’s a need to
improve the
understanding of
business plan and models
of forestry”
“There’s the need to
increase competiveness of
forestry projects”
“We should improve
communication between
forest owners, project
managers, financers and
authorities”
“Could be good
improving technical
capacity on the ground,
skills, and operational
know‐how”
“There is a gap of
knowledge in relation to
better engage in
discussions”
“We need a source of
project developers, and to
educate them" “There is a lack of
institutions that give you
everything you need”
“Could be good
disseminating good
practices”
“There’s a lot to learn
from agricultural finance
models”
“We need to exploit the
informal expertise,
learning from them”
“Could be good using
opportunities created by
climate change”
“There is a legal
framework, but
institutions don’t
implement it”
“We need an integrated
value chain”
19
SummaryofdiscussionsGroup2:ProjectDevelopersandForestCommunities
“There are difficulties to
find financial assistance
to agroforestry, not
related to direct food
plantations”
“If you’re an individual
you’re not eligible” “A project developer has
to be sure about the
market possibilities”
“It is not good finding
investors or pushing a
project without knowing
what would happen”
“If there’s a production
ongoing, it’s easier to
have support. But if you
want to start from the
beginning… There are no
real professionals to do
business with”
“There’s something more
than establishing the
production. You have to
ensure the entire supply
chain”
“A product must have a
value chain” “What we can do is to
continue supporting the
process if there’s only
one gap in the value
chain (even if it’s a good
or bad chain) and try to
solve it and wait for the
next generation to solve
the further one”
“A good point to start is
finding old capital, local
business leaders who
have forests and are
investing by itself. We
need to push them” “It’s impossible to export
high productive
methodologies from one
region to another unless
you’ll be able to export
all the actors”
“Probably we’re in a good
moment because
investors have gained
experience by passed bad
experiences”
“Information is crucial and
must be totally publicly
opened”
“More open access to
data will help create
approximations between
actors”
“There are areas where
there are products
ongoing on the agro
sector, but not in the
forestry sector”
“The forests are public,
and there is really market
and commercial options
but nobody does
anything”
“Sectors which are
developing are the ones
politically driven”
“There are no barriers to
keep growing”
20
WorkingGroupsReportsandplenarydiscussion:
Many issues emerged from the discussion of the participants during this last session.
Summarizing, main important were:
Building integrated value chains
Addressing knowledge and communication gap
Building a good pipeline of bankable projects
Creating an enabling environment
Establishing a community of practice
Concerning the lack of quality projects, according to participants, this could be solved by creating
more types of certifications. A better training of projects managers is also important, along with
the dissemination of good practices, even if it is complicated to export them to other countries.
All these issues included financial capability and a good governance which could overcome
ethical issues such as bribery, corruption and lack of transparency.
To solve the problem of fragmentation (many and small projects), participants proposed to take
into account lessons learned from agriculture extensions. Connecting buyers with sellers, an
integrated value chain through a holistic approach, and bridging the gaps between informal and
formal sectors, are the main priorities highlighted.
Relating to the knowledge gaps, all agree it is very connected with the communication gap
between forest owners, projects managers, financers, and authorities. It is necessary to
share/have information, such as data, tools, and contextualization, available between all
involved actors. Also, it is clear there should be an institutional development: infrastructure,
partnerships, public policy support, policies and legal frameworks, and enforcement. Industrial
organizations have also been named as part of this knowledge gaps.
Among others, the need to increase competiveness of forestry projects has been highlighted, to
solve the lack of awareness, and improve the operational “know how”, that is to say, the
technical capacity on the ground.
9 Participants wrote down their comments on a flipchart paper
21
Reportontheseconddayoftheworkshop
The second day of the workshop also took place at CTFC’s headquarters and involved two
sessions. Session IV consisted of 6 expert presentations from 5 different organizations, and
session V was dedicated to identify the way forward. Finally, there were the closing remarks,
facilitated by Mr. Denis Boglio, General Director of CTFC, and Mrs. Meritxell Serret, Regional
Minister of Agriculture of Catalonia.
Expert presentations referred to institutional mechanisms including partnerships and alliances,
and how to enable environment for risk mitigation and management. The session dedicated to
the way forward aimed at drawing a roadmap for an effective community of practice.
SessionIV:Institutionalmechanismsincludingpartnershipsandalliances
PublicPrivatePartnership(PPP)projectsasariskmitigationtoolforprivateinvestmentsinforests:ExperiencesandlessonsfromtheGermanDevelopmentCooperation,byMr.JanBock(GIZ)
Mr. Jan Bock, from the International Forest Policy Programme of GIZ, talked about PPP projects
as a risk mitigation tool for private investments in forests. Using the Sleeping Beauty as a
metaphor for sustainable forestry, Mr. Bock raised the issue of whether it could be also a long‐
term strategy.
Mr. Bock explained the basic idea of PPP, as the joint of development‐policy goals with the one’s
of private industry, in order to achieve greater development‐policy impacts through
cooperation. He remarked that PPP projects involve multiple stakeholders, and they are
interesting for their connection with the markets.
As an example, Mr. Bock presented the GIZ develoPPP.de
programme, through which GIZ has worked with over 1,000
companies during the past 20 years, from large corporations to
small enterprises. From 1999 to 2015, the programme has
developed more than 1.500 projects; 37,2% of those public and
62,8% private.
“It is not only timber production, there are a lot of other things too”, he said. Some examples
were reforestation, afforestation, agroforestry, non‐timber forest products (NTFP), and
forest/wood based industries, some of them based on certifications, yet in order to export a
product to Europe, protocols are needed. In addition, he defined PPP as success stories involving
capacity building. NTFP, seemed to be easier than timber since it doesn’t need processing nor
cutting trees.
“If we are not
connected to the
markets, there is a
problem”, Jan Bock
22
Therefore, Mr. Bock presented PPP as a mitigation tool for commercial and production risks,
market risks and for political and reputational risks, and as an adequate instrument to develop
business models and value chains.
For the way forward, he presented the following recommendations:
- Strengthen the involvement of the domestic private sector.
- Develop long term partnership in order to influence framework
conditions.
- Systematic integration into bilateral (forest sector) programmes:
governance reform and private sector cooperation.
Buildingallianceswiththeprivatesector:experienceofWBCSDbyMr.MikeMayfromWBCS,ForestSolutionsGroup
The WBCSD Forest Solutions Group (FSG) was presented by Mr. Mike May, who talked about
business solutions for a sustainable world. The FSG presents a global platform for strategic
collaboration across the forest products value chain. FSG aims to bring most of the world’s
forests under sustainable management, to expand markets for responsible forest products and
to ensure growth and vitality of forest resources today and for future generations.
As Mr. May explained, FSG publically reports progress about their sustainability performance in
accordance with internationally recognized practices and standards. “The objective is to be
involved in dialogues about the forestry environment and development. We need availability of
results to support financial activity”, he said.
10 Map of the value chain members of the WBCSD Forest Solutions Group. Source: Mike May
23
Mr. May also provided a structured overview of the flagship initiatives, which include:
1) Best practices for Sustainable Forest Management focused on the work with the forest
certification systems.
2) FSG actively collaborates with The Forest Dialogue, an independent platform and
process for multi‐stakeholder engagement.
3) Sustainable Value Chains & Procurement works with WRI on the Sustainable
Procurement Guide for wood and paper‐based products.
4) Values and Benefits of Forest Products demonstrate the wide range of solutions that
forests and forest products provide in particular in relation to climate change.
5) Key Performance Indicator Project hosts the annual reporting work of the FSG to the
membership principles.
6) Targeted communications and outreach is key to inform and connect with critical
audiences and influence policy frameworks through targeted communication and
outreach.
Their Key Performance Indicators are:
- Best practices for Sustainable Forest Management
- Collaboration with The Forest Dialogue
- Sustainable Value Chains & Procurement
- Values and Benefits of Forest Products
He also noted targeted communications and outreach as a key to inform and connect with
critical audiences and influence policy frameworks.
Thepartnershipbetweenforestryandagriculture:theprogressofPortugalintermsofforestryproductsdiversificationandriskmanagement,(Casestudy:FlorestaAtlânticaFund)byMrs.CarlaWadewitzfromBANIF
Mrs. Carla Wadewitz dwelled upon the progress in Portugal in terms of diversifying forestry
products (combining timber production with other products) and risk management (maximizing
the output of land opportunities for revenues, for example with NWFP).
24
Mrs. Wadewitz started her presentation with the major conclusions: Providing direction to
market conditions, country conditions, partnerships and risk management will allow a successful
investment.
Floresta Atlântica Fund was presented as a case study:
- Floresta Atlântica Fund (€20 Million) was launched in October 2007 and its main purpose
is to promote sustainable forestry development through the commitment of public‐
private initiative.
- Investment policy is based on product diversification. She emphasized the idea of being
smart in combining forestry and agro products (exs: nuts, berries, mushrooms, etc.) to
maximise IRR.
- It took into account sharing steps between the
forest management value chain and the
agricultural exploitation value chain.
- It includes multiple partnerships, among local
agents, local communities, local authorities,
certification entities and scientific community.
- It counts with Int’Graal‐WinForest, a modular
information management system that allows for an
efficient management of agricultural and forestry assets, optimizing operations and
maximizing the return from this sustainable investment.
- Regarding to the systemic risks analysis, the final evaluation of forest fire hazard is
through the integration of two key elements: fire history and potential propagation.
11 Major conclusions according to Ms. Wadewitz
“In the value chain,
agriculture and forestry
share steps. Collaboration
contributes to reducing
costs”, Ms. Wadewitz
25
LandDegradationNeutrality(LDN)FundProject,byMrs.CarolineBouquet(Mirova)
Mrs. Caroline Bouquet presented the Land
Degradation Neutrality (LDN) Fund Project, the 1st
large‐scale initiative dedicated to reaching LDN,
imagined by the United Nation Convention to
Combat Desertification (UNCCD). To achieve LDN,
large amounts of financial resources need to be mobilized, so it is crucial to attract private
investors in addition to public money.
The LDN fund was defined as different. On the one hand, this project intends to be a pilot of this
new investment territory, promoting land rehabilitation and sustainable land management. Still,
they want to promote what already exists and train to upscale these initiatives. On the other
hand, a partnership has been established with Mirova, the responsible investment management
company dedicated to structure the Fund.
Mirova is needed to assist and provide support to widely
diverse investors and institutions. They are currently
creating an investment framework and analysing a first
batch of potentially good projects.
Without geographical restrictions, they are currently looking for projects on the basis of the
following criteria:
1. Significant contribution to land restoration.
2. Project size with scalability/replicability potential
3. Financial profitability/ bankability
4. Project readiness (pilot‐project implemented, feasibility study already carried out)
DevelopmentBanksCoalitionforForests,byOctavioCarrasquilla(CAF)
Mr. Octavio Carrasquilla, representing CAF, talked about a potential future Forest Working
Group within the International Development Finance Club (IDFC). The speech was focused on
the description, internal organization and functions of this potential group. Mr. Carrasquilla
highlighted that its mission, in a long‐term perspective, is to address the challenges for
sustainability by investing in forestry. He also presented the 6 different IDFC working groups:
1) Climate change.
2) Sustainable Infrastructure.
3) Sustainable Urban Development,
4) Efficiency Energy.
5) Triangular cooperation.
6) Health.
7) Forests (not yet created / proposal from CAF)
LDN is a state where the amount
of healthy and productive land
resources remains at least stable
More than $300 billion per year
are needed to achieve land
degradation neutrality by 2030
26
The main objective of the Development Banks Forest Working Group would be the revitalisation
of the forest sector through strategic development banks partnerships and the exchange of
experiences, generation of synergies, economies of scale and efficiency of management in order
to better support forestry development.
The Specific Objectives for the Working Group that Mr. Carrasquilla shared were:
1) Exchange knowledge, experiences and lessons learned in financing forestry and forest
conservation.
2) Construction of joint mechanisms and market‐based instruments to change consumer
preferences and encourage green innovation financing and the forestry sector.
3) Generating a pattern of proposed schemes for forestry projects that integrate different
forest products and services to facilitate their financing.
4) Evaluation and systemization of good practices for environmental and social assessment
and monitoring of forest financial operations, including investment in skills
development and training.
5) Development of new financial products and mechanisms for reducing the financial risk
of developing the forestry sector, including support for the establishment of sound
regulatory frameworks and local economies with social inclusion.
27
SessionIV(2ndpart):Enablingenvironmentforriskmitigationandmanagement
Principlesforresponsibleinvestmentinagricultureandfoodsystems.CFS‐RAIandForestry–Introductiontoatoolforinvestment,byMr.MichaelRiggs(FAO)
Mr. Riggs talked about the CFS‐RAI principles
as an investment tool, since they could
enable a positive environment for risk
mitigation and management. He started his
presentation by emphasizing the importance
of attracting not just more investment, but
better investment.
These principles were developed and
endorsed by the United Nation’s Committee
on World Food Security (CFS) that uses a
multi‐stakeholder, inclusive approach to
develop and endorse policy
recommendations and guidance on a wide
range of food security and nutrition topics.
The objective of the CFS‐RAI principles is to
promote responsible investment in
agriculture and food systems, thus
contributing to food security and nutrition,
and also supporting the progressive
realization of the right to adequate food in
the context of national food security.
How do we make these principles useful? As
Mr. Riggs explained, “A key problem is finding
adequate assessment of investments in rural areas. We must address government, non‐
government and private sector actors, create partnerships and strengthen the enabling
environment for investment, share knowledge and build the capacity of institutions and
individuals so that effective processes are in place.”
For that reason, FAO is developing an Umbrella
Programme for CFS‐RAI, an overarching concept to
support all stakeholders in translating the CFS‐RAI
principles in concrete actions.
Several ongoing activities are being carried out,
including advocacy at international events, information
material, initial capacity assessments with key
stakeholders and the establishment of partnerships.
Principles for Responsible Investment
in Agriculture and Food Systems
1. Food Security and Nutrition
2. Economic development
3. Gender Equality
4. Engage and empower youth
5. Tenure of land, fisheries, forests,
water
6. Natural resources and climate
change
7. Cultural Heritage and Traditional
Knowledge
8. Safety and Health
9. Governance and Grievance
Mechanisms
10. Impacts and Accountability
“Investing in forests is an insurance policy for the
planet” 21 March2016 – the International Day of
Forests, UN Secretary‐General Ban
Ki‐moon
28
Greeninvestmentpromotion,byMrs.LuisaNenci(SustainValues)
Mrs. Luisa Nenci talked about the financial sector contribution to sustainability, as green finance
aims to address the financial challenges faced by sustainable development. Achieving profitability and sustainable development is possible through efficient markets, risk management and ethical
standards implementation. While an efficient market should guarantee the maximum comfort to the community through the fair allocation of resources, risk management refers to addressing adequately the consequences of human actions and ethics is concerned with ensuring fair treatment to all parties including future generations.
Mrs. Nenci drew‐up the state‐of‐the‐art on the issue by explaining the lack of common
definitions and data that is making difficult to provide a robust estimate of the current level of
climate‐friendly investments from institutional investors.
Furthermore, Nenci explained that there is a lot of untapped potential in terms of capital,
because the actual investments are well below the level of required climate‐friendly
investments. Investors are finding it difficult to find investments that are climate friendly and
also comply with their financial investment criteria, across all asset classes. Mostly is public
finance (central, state or local governments and their agencies) that continues to drive private
investment and grew steadily. Mainly came from development finance institutions which
provided 33% of total climate finance flows. Although, private investment remained the largest
source of global climate finance. While Institutional investors are generally increasingly investing
more in fixed income and alternatives, and less in equities.
Analysis find that the share of climate‐friendly investment in the portfolios of pension funds and
insurance companies is around 1‐2% for green, between 5‐10% for brown, and for high‐carbon
sectors around 20‐25%. However, as explained, there is a significant level of uncertainty tied to
these estimates.
Between the financial mechanisms presented, there are:
- Alternative finance (funds of funds)
- Forest bonds
- Network finance (the landscape fund)
- Demand Dividend Investment (Eleos Fundation)
- Supporting green securitisation
- Pooling of climate‐friendly assets (Kommunal invest)
- Small‐hold aggregation mechanism
- Community investments
- Venture Capital/Business Angels
- Crowdfunding
- Social and Environmental Credit Rating (SECR) system
29
SessionV:WayForward–Roadmapforaneffectivecommunityofpractice
On the basis of the areas of work that emerged during the Working Group sessions and with the
lively interaction of the participants, a roadmap began to take shape:
1‐ Build integrated value chains / Address fragmentation
Compiling and analysing success stories and good practices of value chain integration,
including aggregation, extension systems, out grower schemes, public private
partnerships, certification schemes, examples form the agriculture sector, etc. (target
group: project developers and forest communities/smallholders)
Product: Study on success stories and good practices for forest value chain
integration as a risk mitigation strategy
Developing a capacity development offer and trainings on value chain integration to
empower smallholders and project developers.
Product: A capacity development concept on value chain integration to empower
project developers and smallholders
In selected countries/value chains, supporting existing local and domestic
structures/organizations/institutions to foster value chain integration and reach scale.
Product: Tailor made advisory services to foster value chain integration and
scalability
Supporting strategic alliances for upscaling value chain integration good practices.
Product: Tailor made advisory services to support strategic alliances and partnerships
for value chain integration
30
2‐ Address knowledge and communication gaps
Developing knowledge on the forest sector’s specific risks and risks mitigation
mechanisms, especially on financial and institutional approaches.
Product: Database of financial and institutional innovation practices for risk
mitigation and management
Ensuring improved communication between value chain stakeholders to bridge
information gaps
Product: Communication channels enabling systemic information exchange
between VC stakeholders, for selected VC and countries
3‐ Build a good pipeline of bankable projects
Developing capacities of smallholders and project developers in designing bankable
projects (attractive to impact and institutional investors).
Product: Capacity development concept + Test Training
Supporting the design of bankable projects in selected countries and value chains.
Product: Bankable projects concepts to be made available in selected countries and
value chains
Compiling business cases and models (database of landscape‐based business
opportunities)
Product: Database of landscape business cases, detailing country and value chain
specific opportunities and responsible person for the project
4‐ Strengthen the enabling environment
Specifying the key success factors (KSF) for enhanced private investments in selected
countries and value chains (including on ESG, tenure, public policy and incentives issues,
etc.).
Product: Benchmark study of KSF for selected countries and value chains (including
on ESG, tenure, public policy and incentives issues, etc.) + Related policy briefs
Developing capacities on KSF for enhanced private sector investments
Product: A capacity development concept is available, targeting policy makers and
government officials + Test training
31
5‐ Establish a community of practice
Designing a community of practice for enhanced private sector engagement in
sustainable forestry
Product: A platform concept is available, specifying target groups, governance,
communication channels, expected outputs and products, etc.
Facilitating the community of practice (CoP)
Product: The CoP/platform is launched and facilitators have been identified in
order to ensure sustainability of the CoP, efficient and regular communication with
involved stakeholders
12 All the group outside of CTFC
32
Finalconsiderations
This report reflects several outcomes that emerged during the Expert Workshop on Reducing
Risks of Private Sector Investments in Sustainable Forestry. It became clear that discussions
focused primarily on promoting forestry investments, and especially on how to mitigate risks,
and what kind of financial and institutional measures are needed to mitigate them. There are
still more questions than answers to what can be done to reduce risks.
The Next Steps were drafted as a roadmap on the basis of the discussions during the Working
Groups: building integrated value chains, addressing knowledge and communication gaps,
building a good pipeline of bankable projects, creating an enabling environment and establishing
a community of practice.
The importance of collecting the results of previous projects was stressed, using the existing
experience to create in‐depth analysis, in an attractive way for future investors. There is also a
need to establish clear information sharing opportunities and guidance on useful financing tools
in order to reduce risks as much as possible.
Participants also concurred on the need to enable dynamic environments and to adopt
mechanisms to help fragmented businesses access better finance and market services in order
to reduce costs, and likewise, to build integrated value chains making use of existing local and
domestic structures.
Still, they all agree, on an optimistic note that the convergence of scenarios during the last two
years has gone in a good direction for enhanced investments in the forest sector.
During the Workshop, it also became very clear that the FAO plays a key role globally in
supporting the process and acting as an umbrella organization for the main initiatives. Potential
FAO role could involve particularly the following activities:
Work with interested partners on selected case studies to extract lessons learned;
Support community of practice on effective forest finance instruments and risk
mitigation approaches…;
Work with interested partners on finance for sustainable supply chains in countries
with potential demonstrative impact.
FAO and CTFC would like to thank once again all the participants for their excellent contributions
and continued support to this activity.
33
AnnexesAnnexI.Detailedprogram
Thursday, 21 April 2016
(Good practices, lessons learned, gaps and innovation needs)
08.30‐09.00 REGISTRATION
09.00‐10.30 SESSION I : Inauguration
09.00‐09.30 Welcome and opening statements by dignitaries FAO (Thais Juvenal), CTFC (Denis Boglio)
09.30‐10.15
Objectives and rationale
Expected results and short introduction to the background paper
Getting to know each other
Rao Matta, FAO
Ludwig Liagre, FAO
All participants
10.15‐10.45 COFFEE BREAK
10.45‐12.00 SESSION II: Sharing good practices and case studies (Investor level perspectives)
Facilitator: Thais Juvenal
10.45‐12.00
Building partial risk mechanism in support of the 20 X 20 Initiative and partner impact funds.
Financing mechanism for small scale cooperatives and CSR strategy in forest investments in Morocco
Portugal vs Australia: The difference in forestry risk mitigation strategies and key takeaways
Take the money and run; when to hand the money to avoid the run.
PWC (tbd)
Octavio Carrasquilla, Latin American Development Bank (CAF) Mariem Dkhil, Credit Agricole du Maroc (CAM) Carla Wadewitz, BANIF Investment Bank Francesca Nugnes, Finance Alliance for Sustainable Trade (FAST) Chris Knight
12.00‐13.00 LUNCH
13.00‐14.15 SESSION II (Contd.): Sharing good practices and case studies (Project level perspectives)
Chair: Rao Matta
13.00‐14.15
Lessons learnt form project due diligence and project valuation
The Nicaforest Reforestation Pilot Program in. Nicaragua (NRPP).
Plantation Investments in Africa: drivers, obstacles, gaps, case studies
Key barriers for investments in Forest and Landscape Restoration
Christian Held, Unique Forestry Oyvind Berg, Across Forest Petri Lehtonen, Indufor Ludwig Liagre, FAO
34
Insurance and other economic instruments Phil Cottle, Pardus Underwriting
14.15‐14.30 COFFEE BREAK
14.30‐17.30 SESSION III: Group Work on Identifying gaps and defining innovation needs
Facilitators: From among the participants
14.30‐17.00 Group – I (Investors, bankers)
Group – II (Project developers, managers and technical service providers)
Facilitated GROUP exercise
17:00‐17:30 Working Group reports and plenary discussion
Friday, 22 April January 2016
(Institutional mechanisms including partnerships, alliances and roadmap for action)
09.15‐10.15 SESSION IV: Institutional mechanisms including partnerships and alliances
Facilitator: Ludwig Liagre
09.15‐10.15
Public Private Partnership Projects as risk mitigation tool for
private investments in forests: Experiences and lessons from the
German Development Cooperation
Building alliances with the private sector: experience of
WBCSDwith example of “the Forest Finance Toolkit”
The partnership between forestry and agriculture: the progress of
Portugal in terms of forestry products diversification and risk
management
Development Banks Coalition for Forests
Jan Bock, German Development
Cooperation (GIZ)
Mike May, WBCSD, Forest
Solutions Group
Carla Wadewitz, BANIF
Investment Bank
Octavio Carrasquilla, CAF
10.15‐10.30 COFFEE BREAK
10.30‐11.30 SESSION IV: (Cond) Enabling environment for risk mitigation and management
10.30‐11.30
RAI Principles as an investment promotion tool
Green investment promotion
Michael Riggs
Luisa Nenci
11.30‐12.30 SESSION V: Way Forward‐ Roadmap for an effective community of practice
FAO, CTFC, WB and other Development Partners
11.30‐12.30
Next steps, roles and responsibilities
Development and dissemination of information including the forthcoming publication
Closing remarks
Plenary
Regional Ministry of agriculture of
Catalonia
12.30‐13.30 LUNCH BREAK AND DEPARTURES
35
AnnexII.ListofParticipants
Experts
Country Name Organization Position Contact details
Portugal Carla Wadewitz
Banif Investment Bank & Catolica Lisbon School of Business & Economics
Investment Manager & Professor
cwadewitz@bbi.pt
France Caroline Bouquet
LDN Fund Mirova Analyst caroline.bouquet‐ext@mirova.com
United Kingdom
Chris Knight PwC Forestry and Ecosystems Leader
chris.knight@uk.pwc.com
Deutschland Christian Held
UNIQUE forestry and land use GmbH
Head Timber Economics
christian.held@unique‐landuse.de
Canada Francesca Nugnes
FAST Financial markets and Information Manager
francesca.nugnes@fastinternational.org
Spain Inazio Martinez
EFI ‐ EFIMED Head of Office inazio.martinez@efi.int
Deutschland Jan Bock GIZ International Forest Policy Program (IWP)
jan.bock@giz.de
Italy Ludwig Liagre
FAO FLR Mechanism
Forest & Landscape Finance Specialist
Ludwig.Liagre@fao.org
Italy Luisa Nenci Sustain Values CEO & founder lnenci@sustainvalues.net
Morocco Mariem Dkhil
Crédit Agricole du Maroc
Expert Financing Sustainable Development
dkhil@creditagricole.ma
Italy Michael Riggs
FAO Capacity Development Officer
Michael.Riggs@fao.org
Spain Mike May FuturaGene Vice President Public Affairs
mike@futuragene.com
Spain Narcís Ribes CTFC Forestry Policy narcis.ribes@ctfc.cat
Italy Niclas Benni FAO Rural Finance Consultant
Niclas.Benni@fao.org
Venezuela Octavio Carrasquilla
Latin American development bank (CAF)
Chief Executive ocarrasquilla@caf.com
Norway Øyvind Berg Across Forest CEO oyvind.berg@across.no
Lebanon Patricia SFEIR
SEEDS‐Int Rural Development Expert
patricia.sfeir@seeds‐int.org
Finland Petri Lehtonen
Indufor Deputy Managing Director
petri.lehtonen@indufor.fi
36
United Kingdom
Phil Cottle Pardus Underwriting
Head of Agriculture
phil.cottle@pardusunderwriting.com
Italy Rao Matta FAO‐FoA Forestry Officer rao.matta@fao.org
Italy Thais Juvenal FAO‐ FoA Team Leader Forest Governance and Economics
Thais.Juvenal@fao.org
Other participants
Country Name Organization Position Contact details
Spain Arnau Picó CTFC Projects Group arnau.pico@ctfc.es
Spain Carla Bellera CTFC Science Communication
carla.bellera@ctfc.es
Spain David Solano CTFC International Affairs Director
david.solano@ctfc.es
Spain Denis Boglio CTFC General Director denis.boglio@ctfc.es
Spain Meritxell Serret
Ministry of agriculture of Catalonia
Minister for agriculture of Catalonia