ArBolivia

ArBolivia is a plantation forestry project in Bolivia set up according to a completely novel concept.

Investors in ArBolivia can make an attractive profit while realizing the lasting protection of native forests and while supporting the local small farmers.

Ethical versus profitable

In general these ethical goals can only be achieved at the expense of financial sacrifice. This is a general rule of thumb. The higher the ethical values, the lower the profit. Worldwide, this is the first project we know of that clearly and convincingly breaks this rule of thumb. Protection of the local ecosystem and helping the local population are made profitable in the ArBolivia project with help of the so called Sicirec formula.

Project summary

Local farmers get support from ArBolivia with cheap financing and with know how to dedicate part of their land to the planting of precious indigenous tree species. That way they add a long cycle, but very profitable, crop to their agricultural business model. In exchange for this support they set apart a percentage of the land involved for permanent ecological protection. In financial terms they sacrifice the utilization of part of their land in exchange for a structural raise in income for the short and for the long term. The timber revenues are split 50%/50% between smallholders and investors. For reasons of "economy of scale" fair trade effects are realized and the 50% of the revenues for the smallholders can easily compete with local prices of timber traders. The smallholders get access to microcredits on the basis of the trees that are growing in value. The project started operations some 4 years ago and in practice, the smallholders / farmers appear to like the concept and many contracted smallholders already opt for an extension of their participation or bring in family or neighbors.

Expected compensation for higher overhead

Working with large numbers of small farmers over large areas, makes the overhead costs per planted hectare higher than normal. This is compensated by generating income from the sales of carbon credits and other environmental services (PES) like REDD and tree planting subsidy certificates (TPSC's). These recently developed financial tools make this novel approach viable and profitable.

ArBolivia in numbers

• Project size: 7200 hectareswarning.png"hectares" is not declared as a valid unit of measurement for this property..
• 1000 hectares are set up and managed with Agroforestry methods.
• 1200 hectares are set aside for permanent protection of nature, forming ecological pockets and corridors.
• 5000 hectares are planted with precious and mostly local tree species.
• Tree planting cycles run from 15 years to over 40 years, depending on the species.
• 1600 of these 5000 commercial hectares have been planted already.
• 1000 out of some 2000 farmers / smallholders have already been contracted.
• US$ 3 million out of US$ 17.4 million of the costs until break even have already been invested.
• US$ 7 million to be covered by (Green) bank loans (Dutch government Green Project Qualification available).
• US$ 3 million to US$ 7 million to be covered by sales of carbon credits and other PES.
• The remainder is to be covered by investors.
• Gross timber revenues expected: US$ 325 million.
• Net timber revenues for smallholders and for investors alike: US$ 100 million each.
• IRR to be expected, ranging from 10% to over 30% for some 40 years, depending on sales of carbon credits and other PES.

Investing in ArBolivia

ArBolivia is looking for additional providers of risk capital for around US$ 4 to US$ 5, and preferably for a guarantor for US$ 10 million, of which only part will have to be provided in cash during the next 5 years. The share in the net profits is proportional to the guaranteed sum, not only to the actually invested money.

For further information see the brochures below.

Brochures and presentation materials

• Short Power Point presentation on the Sicirec Formula as applied to the ArBolivia project.pdf
• Short executive summary of the ArBolivia project for investors.pdf
• The "Sicirec Formula": Making Money through Nature Conservation, comprehensive goal and project description for investors, 8 pages.pdf
• 11 page description of the ArBolivia project.pdf
• Brochure: The Arbolivia Climate Action Plan, a 10 page brochure.pdf

See also

• Sicirec Group
• Ethical Investment (company)
• 3D Investing

External links

• www.arbolivia.org
• www.sicirec.org/investments/sustainable-forestry-cochabamba
• www.3dinvesting.com/ms/cochabamba.coop