Verde Ventures 2012 Overview
-
Upload
neel-inamdar -
Category
Economy & Finance
-
view
177 -
download
0
description
Transcript of Verde Ventures 2012 Overview
Neel Inamdar Fund Manager
Cheung 2009
Verde Ventures: Building Healthy Sustainable Economies by Investing in Small and Medium Enterprises
• Fund Overview
• VV Monitoring &
Evaluation
• VV Coffee Portfolio
Impacts
VV
Fund Overview
Verde Ventures invests in small businesses that contribute to green economies in Conservation International's global priority areas
Our Mission
VV Results
• 3 main investors • $19.2 million invested • 48 entities supported, 104
loans, 13 countries • 91% of repayment rate • 55,544 direct beneficiaries • 464,144 hectares directly
impacted • 16.4 million hectares indirectly
impacted • 482 Red-listed species • $134 million in sales generated
by clients
2012 vs. 2011- TBL comparison
Investment by sectors
3%
79%
12% 0% 5%
Investment by Sector
Cocoa
Coffee
Ecotourism
Natural Products NTFP
Our Tools
• SME Loans: US$30,000 to $500,000 for infrastructure, working capital, trade finance for business development in rural communities.
• Technical Assistance: Accounting, marketing, business plan development
• Monitoring: Triple-bottom line
monitoring (Environmental, Social and Financial)
Type of Financing
• Long Term: infrastructure, equipment and crop maintenance
• Short Term/Trade Finance: working capital, harvest finance.
Key Partners
���
• International Finance Corporation (IFC) • l’Agence française de développement (AFD) • Fonds français pour l'environnement mondial (FFEM) • United Nations Foundation (UNF) • Daiwa Securities • Global Environment Facility (GEF) • KfW Entwicklungsbank (KfW) • Gordon and Betty Moore Foundation (GBMF) • Overseas Private Investment Corporation (OPIC) • Starbucks Coffee Company
Why Verde Ventures? • Conservation-based employment is essential to provide economic incentives for conservation
• The small business sector is a key partner in the intersection between human welfare and conservation
• Lack of available, affordable capital is a major constraint to building green economies
Facts
Hotspots + wilderness areas populated
VV Project Map
Further behind today than microfinance was in 1999, and is perhaps 10 years behind
Uncoordinated ���Innovation
Marketplace ���Building
Capturing the Value ���of the ���
Marketplace
Maturity
Microfinance(today)
SME Conservation
Finance
“Marketplace Building” involves: • Building efficient intermediation to
unlock latent supply of capital • Building enabling infrastructure for the
industry • Developing absorptive capacity for
investment capital
Sectors
Sustainable Agriculture– VV has continued to invest in sustainable and responsibly grown coffee cooperatives and estates as well as in other agricultural products in Central, South America, and Africa. Investments in this sector are typically designed to enhance habitat conservation, and provide water and food security benefits.
Name of Investment Central Agropecuaria Perla del Mayo (CAPEMA)
Sector/Country Coffee / Peru – Alto Mayo Region
Amount 150,000 USD
Conservation/Social Impact
CAPEMA represents 150 coffee producers from 6 communities in the Alto Mayo Protection Forest’ buffer zone. After cattle, coffee production is one of the main agricultural activities that represent a risk for conservation in the Alto Mayo watershed. Certification programs demand an improvement on agricultural practices such as soil erosion prevention, prohibition on agrochemicals use, agroforestry systems establishment and waste water management. Fair Trade certification also assures a minimum price and demands that the organization maintain an annual premium (US$10/coffee bag) for AGM agreed social investments. Associates’ families depend on coffee production and commercialization through CAPEMA as one of the bigger incomes during the year. They also produce some other crops for their own food security.
VV Deals – CAPEMA / Alto Mayo
Alto Mayo, Peru
Alto Mayo, Peru
Name of Investment Technoserve Ethiopia Coffee Cooperatives
Sector/ Country Coffee / Ethiopia
Amount 400,000 USD – Loan Guarantee
Conservation/ Social Impact
Three major impacts are envisaged: • Protection of natural forests through the development of sustainable small
businesses that enable coffee farmers to earn more income and keep growing coffee
• Adoption of good practices for sustainable, certified, or conservation friendly coffee
• Reduction in freshwater consumption by coffee cooperatives With only 3% of the surface area of the country covered by natural forests, the conservation of these areas and the reduction of the demands made on these ecosystems are a conservation priority. As in many developing countries, there are very few economic options available to local populations who rely, along with a number of important species, on the ecosystem services provided by these forest areas. In Ethiopia, no less than 80 percent of the rural community and a significant proportion of the urban dwellers depend on herbal medicines for their primary health care delivery system. In addition to foods, medicine, fuel wood, and construction materials, forests provide wildlife habitat and recreational opportunities, prevent soil erosion and flooding, and help provide clean air.
VV Deals – Ethiopia Coffee Cooperatives
Ethiopia Cooperatives, Ethiopia
Ethiopia Cooperatives, Ethiopia
Name of Investment Ten Senses Africa
Sector/Country Macadamia Nuts / Kenya - Africa
Amount 75,000 USD
Conservation/Social Impact
The investment in Ten Senses Africa represents an opportunity to support a socially responsible enterprise currently enhancing the life of approximately 1,800 farmers in key areas for biodiversity by providing an economic justification to maintain tree cover in an important water tower and a region where most trees are threatened by charcoal burning. The upper Tana region is a critical fresh water resources in Kenya, important for the ivelihood of local farmers. The rivers are indispensable source of water for crops, livestock, wildlife, and human use, not only within the mountain vicinity, but also for farther arid and semi‐arid lands. The upper Tana region also hosts several reserves and parks. They contribute to Kenya’s economy in the ecotourism industry and also provide direct or indirect stream of revenues to the surrounding communities. Strategies to protect this rich region include alleviation of poverty. In fact, over the years, it has been proven that poverty is as a key driver in over‐ exploitation of the ecosystem. TSA’s activities in the region and its commitment toward certification (fair trade and organic) enable the rural communities to improve upon their living standards and conserve their natural habitat.
VV Deals – Ten Senses Africa
Ten Senses Africa, Kenya
Ten Senses Africa, Kenya
Sectors
Sustainable Tourism – VV has continued to invest in priority ecotourism enterprises in Africa and in Central and South America. Sustainable, responsible tourism continues to be an important component of many sustainable economies and is an effective mechanism to secure both critical habitats and provide alternative economic opportunities to local communities in many parts of the world.
VV Deals – Playa Viva
Name of Investment Playa Viva LLC
Sector/Country Tourism / Mexico
Amount 200,000 USD
Conservation/ Social Impact
Playa Viva is within CI’s Mesoamerican Hotspot and directly involved in supporting a turtle sanctuary with high egg counts of 5-10 nests of leatherback turtles (Red List CR), about the same number of green turtle nests (RL EN), and >2,000 nests of Olive Ridley turtles (RL VU) and low hatch rates. In addition, the developer has demonstrated a commitment to tackle habitat restoration and ecosystem function. As the only formal employer on the beach, they play an important part in providing alternative incomes and capacity building to the rural community. This presents a unique opportunity to maintain a conservation presence on an otherwise unmonitored stretch of tens of kilometers of beach. The initiative has been reviewed by the Conservation Committee, and approved on Dec 2, 2009.
Playa Viva, Mexico
Playa Viva, Mexico
Sectors
Clean Energy – Addressing energy cleanliness is a key component of developing a sustainable green economy. Verde Ventures is committed to tackling the challenges of energy poverty and the related health, climate and deforestation impacts prevalent in many hotspots.
VV Monitoring and Evaluation
VV M+E Framework
• Outlines, demonstrates and tests key
hypotheses: that VV investments support improved TBL impacts
• Estimates substantive impacts
• Embedded within management structure
• Delivers accurate and timely reporting
• Transparency measures built in for accountability
VV’s M+E Framework: 2 Levels
• Portfolio-wide monitoring o All deals o Basic TBL information that
aggregates across o Yearly snapshot of TBL progress
• Project specific monitoring o Subset of portfolio o Specific TBL conceptual models and
indicators o Demonstrates key links between
nature and people o Tailored indicators
VV Portfolio Monitoring
70 Indicators (13 Social, 20 financial, 37 environmental)39 compliant with IRIS 2.2 taxonomy
1. Organiza=on's members
13. Indirect Beneficiaries 24. Addi=onal finance mobilized
36. Number of farms 48. Total Conserva=on Area
61. CI/CELB par=cipant
2. Organiza=on's members: Female
14. Total Revenue 25. Wages paid 37. Ecotourism Area 49. Area Sustainably Managed
62. Water use
3. Full-‐=me Employees 15. Earned revenue 26. Direct customers 38. Ecotourism Clients 50. Area Directly Impacted
63. Water conserva=on
4. Full-‐=me Employees: Female
16. Cost of goods sold 27. Buyer contracts 39. Produc=on: Honey 51. Area Indirectly Impacted
64. Water treatment
5. Part-‐=me Employees 17. Gross profit 28. Average price 40. Produc=on: Wax 52. Distance of water bodies permanently protected
65. Solids treated
6. Part-‐=me Employees: Female
18. Net income 29. Local market price 41. Beehives Managed 53. Number of cer=fica=ons
66. Energy produc=on
7. Temporary employees 19. Net worth 30. Producer Price Premium
42. Produc=vity: Honey 54. Area cer=fied 67. Energy consump=on
8. Temporary employees: Female
20. Fixed assets 31. Total interest repaid 43. Lobster Traps Managed
55. Area cer=fied: Fair Trade
68. Renewable/Non-‐Renewable energy sources
9. Permanent employees 21. Value of collateral 32. Amount of principal repaid
44. Produc=on: Lobster 56. Area cer=fied: Utz 69. Names of Important Adjacent Conserva=on Areas
10. Permanent employees: Female
22. Return on equity 33. Net cash flow 45. Scale of Lobster Produc=on
57. Area cer=fied: Organic
70. Number of IUCN Red List Threatened Species Impacted
11. Direct Beneficiaries 23. Interest Expense 34. Produc=on: focal crop
46. Area dedicated to focal crop
58. Area Cer=fied: Rainforest Alliance
71. CO2-‐equivalent Emissions Avoided
12. Direct Beneficiaries: Female
35. Produc=vity: Focal crop
47. Total Produc=on Area
60. Area cer=fied: Bird Friendly
Impacts
§ US $19.2 M invested in 13 Countries § 464,144 ha protected in 9 hotspots § 55,544 jobs supported, 29% women
VV’s Management Tools
• Feasibility • VV client screening/environmental
indicators • VV due diligence checklist • Value Chain Ranking Matrix • Conservation Memo • Investment Memo
• Implementation • VV Annual Impact Survey • Assessment Tool • Certification Audit Review
• Analysis • Cost effectiveness • Frequency distribution • Performance Indices
• Other initiatives • GIIRS • IRIS
VV Reporting
• Quarterly Triple Bottom Line Report
• Annual Impact Report • M & E Update • Pipeline Report • Dashboard Report
Impact investing linkages
• GIIRS Pioneer Fund
• Aligned with IRIS, FAST, ANDE
• Active at SOCAP, SVN, Investors Circle, etc
VV Coffee Portfolio Impacts
Indicator 2011
Total Area Cer6fied (ha) 13,408
Area Cer6fied Fair Trade 10,132
Area Cer6fied Organic (ha) 7,741
Area Cer6fied Rainforest Alliance (ha) 4,139
Area Cer6fied C.A.F.E. Prac6ces (ha) 1,397
Area Cer6fied Bird Friendly (ha) 854
Total Water Conserva6on (L) 154,716,796
Total Water Treated (L) 29,549,064
Total Solids Treated (T) 39,175
Energy Produced (KwH) 1,205,010
Energy Consumed(KwH) 613,607
Average Producer Price Premium 18.3%
Summary of VV Coffee Portfolio Impact
• There is little scientific consensus on whether these agro-ecological systems provide tangible benefits to maintaining ecosystem services/biodiversity and should be considered areas of conservation significance
• Although shade grown coffee cultivation is no
substitute for natural forest in terms of biodiversity conservation and ecosystem service production, this form of land use provides a viable compromise between the economic needs of local communities and global conservation priorities.
Rationale for Coffee Investment
Coffee Portfolio Indicators
Coffee portfolio status in FY10 & FY11
Indicator Life of Fund 2010 2011
Total Coopera=ve Members
Average Per Client: 1,243 3,351 2,546
Average Price ($/kg) $4.53 $3.98 $5.22
Average Price Premium (for Cer=fied)
18.3%
Total Produc=on (kg) Unknown 8,252,716 6,879,494
Avg. Produc=vity (kg/ha) 667 871 537
# of Farms Contribu=ng to Produc=on
Unknown 880 1,308
Emissions Avoided 15,510,578.08 Mg CO2 3,305,026.9 Mg CO2 5,010,522.08 Mg CO2
Certification Programs
The majority of investments in the Verde Ventures coffee portfolio fall into two broad categories: 1. private landholders 2. organized groups of
small holders (cooperatives or associations).
VV Coffee Investments
In addition to the reliance on certification programs, VV has integrated the following criteria into our process of investment selection: § Location § Alternative Land use § Historical land use § Cluster
Strategy for Investment
Certification Programs
Proportion of clients under each certification in
2012 and 2011
Thank you!
Please visit www.conservation.org/verdeventures