Innovative Business Models for Forest Restoration

Post authored by Luciana Gallardo Lomeli, Initiative 20x20

How do you finance restoration of deforested and degraded lands? Two new Initiative 20x20 partners are exploring how the private sector can unlock the money needed to achieve restoration at scale. In Guatemala, OroVerde is joining is set to promote socially beneficial restoration of near-natural forests and establish value chains of local products that contribute to restoration. In Patagonian Chile, SLM Partners also plans to restore degraded grasslands through a holistic grazing system funded by private sector approaches.

The Tropical Forest Foundation OroVerde was founded in Germany by renowned individuals from business and natural sciences in 1989. The non-profit foundation actively initiates, closely follows, and promotes projects directed at conserving tropical forests. These international conservation projects are run by carefully selected, reliable local partners.

Based on experiences from previous projects in Guatemala, OroVerde implements a joint project with the Guatemalan foundation Defensores de la Naturaleza and Heifer International Guatemala, financed by the International Climate Initiative of the German Environmental Ministry. It aims to promote socially acceptable restoration of near-natural forests in the Sierra del Lacandón National Park, the Wildlife Refuge Bocas del Polochic and the Biospherereserve Sierra de las Minas. In cooperation with the private sector business and CSR models as well as marketing strategies will be developed in order to finance the conservation and restoration of forests in the long run.

Pilot projects will be implemented together with 30 communities in order to establish value chains of local products such as honey, cocao and breadnut. This contributes to the restoration, conservation and sustainable use of up to 180,000 ha of forests and provides a more diversified income to the local population.

Through collaboration with the private sector and other relevant Guatemalan and German institutions, possible forms of cooperation within the pilot projects will be designed (i.a. investments, sponsorships, crowd funding).

The systematized experiences from the pilot projects will help to define specific criteria for improving national as well as international initiatives and strategies for socially acceptable restoration of near-natural forests.

Within the 20x20 initiative the project seeks to contribute its lessons learned and defined criteria, to exchange experiences with similar projects and establish cooperations for the restoration and conservation of the forests in Guatemala.

Grazing in La Montañona, El Salvador. Photo by Stéfanie Neno y Adriana Varón /CIAT (License information here)

Further south, SLM Partners, a private sector member of Initiative 20x20, have put the finishing touches to their investment strategy for grasslands in Patagonian Chile. This will involve acquiring commercial livestock properties that are subject to degradation, introducing a planned rotational grazing system to regenerate land, and improving sheep productivity through better breeds. Financial returns will come from increased production of sheepmeat and wool.

SLM Partners has identified a number of properties suitable for this strategy, including a 95,000 hectare property that has recently come on the market. The firm has partnered with a local team led by an expert in sustainable sheep production in Chile. SLM Partners is seeking to raise capital from institutional investors and family offices with an interest in sustainable real assets. Conversations are ongoing with investors from North America, Europe and Chile.

SLM Partners is an established asset manager that focuses on sustainable, regenerative agriculture and forestry. It manages an Australian beef cattle fund that controls 480,000 hectares of land in Australia.