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Enabling private sector engagement for business-based peatlands restoration & REDD+

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Presented by Marcel J Silvius of the Global Green Growth Institute at the 3rd Asia-Pacific Rainforest Summit, on 23–25 April 2018 in Yogyakarta, Indonesia

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Enabling private sector engagement for business-based peatlands restoration & REDD+

  1. 1. Enabling Private Sector Engagement for Business-based Peatlands Restoration & REDD+ Marcel J. Silvius Country Representive 3rd Asia Pacific Rainforest Summit 23-25 April 2018, Yogyakarta, Indonesia
  2. 2. Global Green Growth Institute at a Glance 27 member countries www.gggi.org Water and Sanitation Energy Sustainable Landscape s Green Cities Designing replicable & scalable projects and programs across Four Thematic Priorities Mission: GGGI Partner countries are supported in their transition towards a green growth model that simultaneously achieve poverty reduction, social inclusion, environmental sustainability, and economic growth
  3. 3. Zone 2: Shallow peatlands zone  Gelam wood, honey, oil, agroforestry business  Aquaculture business  Carbon credits business Zone 3: Mineral soils around peatlands  Sengon-wood business  Rubber plantation business  Agri-business Zone 1: Deep peatlands forest zone  Tengkawang (Illipe nut) business  Carbon credits business  Eco-tourism Government support (Budgetary and policy support) Grants (Donor assistance, technical assistance, etc.) Equity investors (impact investors, developers, corporates, etc.) Concessional debt (international climate funds, etc.) Commercial debt (Banks, commercial funds etc.) Specialized funding; Carbon finance, etc. Business-based peatlands restoration requires multiple business models and multiple financiers
  4. 4. Unproven Business Models  Innovative commodities  Feasibility assessment and Cost-benefit analysis Absence of relevant Financial mechanisms  Access to finance for smallholder farmers  Micro-credits  Fiscal incentives for new business models  Finance mechanisms (e.g. insurance, guarantees) Operational Challenges  Governance over multi-jurisdictional landscapes  Transparency  Undeveloped trade chains  Need for specialized equipment and capacity for rewetted peatlands Challenging Policy Environment  Lack of national & international carbon market & trade  Improved license processes  Simplified license change process  Lower upfront costs for restoration licenses  Lack of synchronized spatial and land use plans  Clarity on land tenure and land-use rights Legal challenges and Lack of Institutional Capacity  Institutional capacity & legality to manage funds  Sub-national institutional capacity BUMDES, KPH, KUD, etc.  Local banks, microfinance companies Barriers for Business models & Private sector engagement
  5. 5. Establish new Business Models  Develop PPP pilot programs for new business models  Incentivize investment in RnD  Streamline corporate CSR initiatives Create New Financial Mechanisms  Fiscal incentives for private investment in paludiculture  Guaranteed minimum price for innovative commodities  Mechanisms increasing creditworthiness of smallholders  micro-insurance  risk sharing mechanisms like credit default guarantees Streamline Operations  Land use/Resource data development & harmonization  Invest in smallholder commodity processing facilities  Invest in supply chain infrastructure  like cold-chain, logistics, etc. Enabling Policies  Harmonize policies in and between sectors  Establish a national carbon market  Allow a capped international carbon trade  Incentivize inclusive - community led - restoration Enhance Legal Structures and Institutional Capacity  Transparent institutional governance  Enable flow of funds to smallholders  Farmer and fishermen cooperatives Potential solutions: financial mechanisms and investments
  6. 6. Contact Us Marcel Silvius Country Representative marcel.silvius@gggi.org Benjamin Tular Forest and Land Use Lead benjamin.tular@gggi.org

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