The
investment in the Tambopata REDD+ Project in Madre de Dios is part of
the Althelia Climate Fund, a highly innovative
fund focusing mainly on projects in Latin America and Africa. The
European Investment Bank (EIB) is a cornerstone investor in the Fund and
has supported it with expertise and finance of more than EUR 15m since
the Fund was
launched in 2013. The
EIB is the world’s biggest provider of climate finance and a pioneer in
the field of innovative approaches to climate investment.
The Fund’s sustainable cocoa project is one of 16 winners
of the UN's
2015 Momentum for Change Lighthouse Activities
Awards. It
is helping more than
1000 farmers to produce sustainable cocoa while protecting the
biologically diverse Tambopata National Reserve and Bahuaha-Sonene
National Park.
The awards are part of a wider effort by the UN as national governments work toward adopting a new universal climate agreement
in Paris this year
Althelia
Climate Fund and the project were singled out for the innovative and
inclusive approach to financing, via a 'payment
for performance’ model: farmers receive financing on the condition that
they will not deforest further, will restore 4,000 hectares of
degraded land with cocoa-based agroforestry systems, and that a share of
the proceeds from cocoa sales will go to investors.
The project will also work with farmers to gain Fairtrade and Organic
certification, which ensures fair labour and environmentally friendly
farming practices.
In
the last 5 years, the European Investment Bank has provided finance of
around EUR 100 billion for climate action both in Europe
and outside it. Last month, the EIB
set a new 35% target for climate financing in developing countries.
The EIB’s new
EIB Climate Strategy
also
committed a greater focus on the impact of projects as well as more
support for adaptation measures in countries particularly vulnerable to
the effects of
climate change.
Key facts on
Tambopata REDD+ Project:
- The project protects 570,000 hectares of rainforest, ensuring that emissions of 4.5 million tonnes of CO2 equivalent are avoided by 2020
- Althelia Climate Fund’s carbon asset-backed loan of USD 7 million is fully collateralized by the project’s emission reduction units (carbon credits). This means additional carbon finance is leveraged to support the protection of standing forest and the restoration of degraded lands, benefitting small farmers who otherwise lack finance
- The Peru-U.S. debt swap fund, FONDAM, provides USD 2 million grant co-financing towards this project
- The investment aims to produce at least 3,200 tonnes per year of certified deforestation-free organic and Fairtrade cocoa. This cocoa will be sold through a farmer’s cooperative, which will secure higher prices for members and full traceability of the product
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