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REDD FinancingREDD FinancingExperience in Experience in

PT Rimba Raya ConservationPT Rimba Raya ConservationINDONESIA INDONESIA

Eka GintingEka Ginting

REDD after Copenhagen REDD after Copenhagen ––The Way ForwardThe Way Forward

88--10 March 201010 March 2010Hue City, VietnamHue City, Vietnam

About Rimba Raya ConservationAbout Rimba Raya ConservationView on Financing REDDView on Financing REDD

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About Rimba Raya About Rimba Raya ConservationConservation

Established in 2008Established in 2008Hold Restoration Concession in Central Hold Restoration Concession in Central Kalimantan Province, IndonesiaKalimantan Province, IndonesiaAdjacent to Tanjung Puting National ParkAdjacent to Tanjung Puting National ParkTo be used as orangutan repatriation areaTo be used as orangutan repatriation areaTo derive Commercial revenues from To derive Commercial revenues from carbon creditscarbon creditsFinanced by Private investorsFinanced by Private investors

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44

55

ClimateClimate

BiodiversityBiodiversity

CommunityCommunity

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In Partnership with Orangutan In Partnership with Orangutan Foundation InternationalFoundation International

OFI/Dr Birute Galdikas has OFI/Dr Birute Galdikas has been operating in Central been operating in Central Kalimantan for almost 40 yearsKalimantan for almost 40 yearsCurrently over 350 orangutan Currently over 350 orangutan in Care Center, in need of new in Care Center, in need of new homehomeConversation with Department Conversation with Department of Forestry recommends of Forestry recommends structuring as a restoration structuring as a restoration concession to secure concession to secure ownership of the forest area, ownership of the forest area, preventing from conversion preventing from conversion into other uses.into other uses.

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Local Community & Govt SupportLocal Community & Govt Support

88

Social Program MatrixSocial Program Matrix

In accordance and even exceeding Millennium In accordance and even exceeding Millennium Development Goal for Indonesia in 2015Development Goal for Indonesia in 2015

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Example Activity: Rimba Raya Example Activity: Rimba Raya Fire Prevention PlanFire Prevention Plan

REDD FinancingREDD Financing

Potential sources of REDD financing:Potential sources of REDD financing:Donor / governmentDonor / governmentCommercial / private investorsCommercial / private investorsBlendBlend

1010

Private FinancingPrivate Financing

LoanLoanWill there be streams of revenues to pay back Will there be streams of revenues to pay back the loan?the loan?If needed, what can serve as collateral?If needed, what can serve as collateral?

EquityEquityFully participate in the upside and risk of the Fully participate in the upside and risk of the enterpriseenterprise

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Equity FinancingEquity Financing

Investors inject fundsInvestors inject fundsIn exchange for ownership of the In exchange for ownership of the enterpriseenterprise

Investors: venture capitals/private Investors: venture capitals/private equity/high net worth individuals equity/high net worth individuals

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““WeWe’’ve seen this beforeve seen this before””

Strong parallel with the Internet/dotStrong parallel with the Internet/dot--com com venture capital investmentsventure capital investmentsHigh expected returnsHigh expected returns

(Low) millions USD investment with 100+x (Low) millions USD investment with 100+x returnsreturns

High risks and uncertainties:High risks and uncertainties:Will there be markets?Will there be markets?Will regulation be conducive?Will regulation be conducive?Where will prices be?Where will prices be?

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Key: Business FeasibilityKey: Business Feasibility

Does it have a real business case?Does it have a real business case?For For ‘‘diedie--hardhard’’ investors investors –– it doesnit doesn’’t have to bet have to be

How do you minimize uncertainties and/or How do you minimize uncertainties and/or risks?risks?

Do we have the rights to trade the carbon Do we have the rights to trade the carbon credits generated?credits generated?Do we have secure land ownership?Do we have secure land ownership?Do we have a guaranteed buyer?Do we have a guaranteed buyer?

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Potential Key Roles for Potential Key Roles for Governments and/or Donors Governments and/or Donors

Minimize uncertainties:Minimize uncertainties:Clear rights assignmentClear rights assignmentClear land tenure / adaptation into existing Clear land tenure / adaptation into existing land tenure schemesland tenure schemesCreate local marketsCreate local markets

Minimize risksMinimize risksSimplifying processSimplifying processTax incentivesTax incentives

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More Govt & Donor RolesMore Govt & Donor Roles

Broaden availability of fundsBroaden availability of fundsFor Loan based financing:For Loan based financing:

Some form of loan guaranteeSome form of loan guaranteeSubsidized interestsSubsidized interestsCapitalization/collateralization/coCapitalization/collateralization/co--signingsigning““GuaranteeGuarantee”” buyer buyer –– the government itselfthe government itself

For Blend:For Blend:Matching funds Matching funds –– successfully done for successfully done for Internet by some countriesInternet by some countriesPreferential exit treatmentPreferential exit treatment 1616

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1818

1919

PetaPeta

Sweet Potato&

Taro, etc.

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3

4

5

6

7

Coffee

Macadamia

Ramin

Cocoa

Karet Hutan

Meranti

Mango Papaya

Vine Spices

Vanilla Beans & Orchids

Irrigation & Aquacultur

e Canals

Low Impact –

High Yield Livestock

8

Honey

Eco- Resort

2020