amazon fund 2010.09.14 - united · pdf fileassets equity disbursement world bank ... flow...
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Key instrument for industrial policy and infrastructure financing in Brazil
100% state-owned
under private law
operationally independent
Instruments:
Direct operations
Indirect operations
Project finance
Equity investments
Non-refundable credit lines
Guarantee Fund for MSME
Non performing loans 2009: 0,20 (%)
DEVELOPMENT BANKS
US$ Billion
ASSETS EQUITY DISBURSEMENT
WORLD BANK 275.4 40.0 18.6
BNDES 222.0 15.9 72.2
IDB 72.5 19.4 7.1
CAF 14.3 4.6 5.8Source: BNDES (Dec/09), World Bankl (Jun/09), IADB y CAF (Dec/08).
(*) World Bank as of June 30th.
SCALE AND SCOPEMATTERS
Drafting of environmental policies
and provision of technical support during
all phases of project analysis
Development and execution of financial
instruments and strategies to encourage
sustainable environmental initiatives
Verification of adherence to environmental
legislation and analysis of the legal aspects of
operations
Management of
the Amazon Fund
DEPUTYMANAGEMENT
Advisors Advisors
Department ofEnvironmental
Policies and StudiesDEMAM
Green Financing Department
DEOPE
Amazon FundDepartment
DEFAM
Legal Department
JUAMA
STRUCTURE OF THEENVIRONMENTAL DIVISION
total world’s forest area4 billion hectares,
nearly 30 % of the
earth’s landmass.
Approximately 56 % of these
forests are located in tropicaland subtropical areas;
seven countries possess about
60% of it,25 countries around 82%
170 countries share 18%.
The highest amounts of deforestation: in South America:
4.3 million hectares per year, followed by Africa with 4 million hectares per year.
FORESTS –FACTS ANDFIGURES
20 % of current global CO2 emissions,more than the total emitted by the
global transport sectorwith its intensive use of fossil fuels.
More than
one billion people rely heavily on forests for their
livelihoods.
More than two billion people,1/3 of the world’s population, use biomass
fuels, mainly firewood, to cook and toheat their homes.
1.7 billion tonnesof CO2 are released annually due to land use change. The major portion is from
tropical deforestation.
FORESTS –FACTS ANDFIGURES
THE AMAZONFOREST
The largest tropical rainforest on the planet.
Some 7 million km2 stretched across nine countries in South America:
BoliviaEcuadorVenezuelaColombiaPeruSurinameGuianaFrench GuianaBrazil
THE AMAZONFOREST
AL AlbaniaAT AustriaBA Bosnia-HerzegovinaBE BelgiumCH SwitzerlandCZ Czech RepublicDE GermanyES SpainFR FranceIT ItalyNL NetherlandsPT PortugalSK SlovakiaUK United Kingdom
TOTAL AREA
14 countriesconsidered
2,456,565
European Union 4,422,773
Amazon states 5,217,423
BRAZILIANAMAZON:TERRITORIALCOVERAGE
Some 60% of the
Amazon forest is in
Brazilian territory.
82% still
forested
BRAZILIANAMAZON
in about 30 years18% of
deforestation
BRAZILIANAMAZON
The Brazilian government’s original proposal presented in
Bali, Indonesia, in
Dec/2007, to create
a mechanism to support efforts in reducing deforestation in the Amazon.
THE AMAZON FUND CONTEXT AND HISTORY
Jan. Feb. Mar. Abr. May. June. July. Aug. Sept. Oct. Nov. Dec.Dec.
CREATION OF THE AMAZONFUND BY DECREE
Aug. Sept. Oct. Nov.
CREATION OF THEENVIRONMENTALDIVISION OF THE BNDES
2008 2009FIRST PROPOSALSSUBMISSION
FIRT FIVEAPPROVEDPROJECTS
COP 15
COFA meetings
2009’S MAIN ACTIVITIES:team structuringdevelopment of processes and proceduresdetailing of operations criterianegotiation of tax exemptions on donationscontract external auditsconstruction of a Logical Framework development of a websitetechnical visits to projects seminars, forums and workshops.
PROPOSALS REACH“ELIGIBLE” LEVELCOFA FIRST MEETINGS:
guidelines for theresources’ application
DONATIONAGREEMENTWITHNORWAY
AMAZON FUNDTIMELINE
promoting a consistent and continuous reduction in the rate of deforestation in Brazil;
transforming the reduction of emissions from deforestationinto a system that finances the conservation andsustainable use of forests;
demonstrating the feasibility of the incentive mechanisms to reduce emissions from deforestation;
and making the forest more valuable than the alternative use of the land.
AMAZON FUND GOALS
Funds raised are earmarked for non-reimbursable funding for projects aimed at:
PAS Sustainable Amazon Plan
PPCDAM Action Plan for Prevention and Control of Deforestation in the Legal Amazon
STATE PLANS State Plans to Combat Deforestation
COFA GUIDELINESAND CRITERIA
Guidelines and criteria established by theGuidance Committee of the Amazon Fund
THE BNDES’OPERATIONALPOLICIES
BNDES’ Operational Policies for the Amazon Fund
GUIDELINES AND CRITERIA / DETERMINING FACTORS Projects must be coherent with:
direct public administration agencies / indirect federal, state
and municipal agencies / research foundations / NGO’s / civil
society organizations of public interest / private companies /
cooperatives / governmental and university research centers
/ scientific & technological institutes / environmental land-
use planning and support entities (federal, state and
municipal) / research foundations / environmental control
entities
BENEFICIARIES
To achieve its objectives,
the Amazon Fund
supports projects
in the following areas,
specified in Decree nº.
6527/08:
management of public forestsand protected areas;
I
II
III
IV
V
VI
VII recovery of deforested areas.
conservation and the sustainableuse of biodiversity; and
ecological and economic zoning,land-use planning and land title regulation;
economic activities developedfrom sustainable use of the forest;
sustainable forest management;
environmental control, monitoring and surveillance;
SUPPORTEDCATEGORIES
1. Modernization andinstitutional development of agencies working in theAmazon Region;
2. Promotion of sustainableproduction activities;
3. Scientific and technologicaldevelopment;
4. Conservation and protectionof protected areas.
The BNDES, to maximize
operational efficiency
classified the seven Decree
areas into the four main
categories:
OPERATIONAL MODALITIES
GOAL• To support environmental management, land
tenure regularization, licensing, inspection and monitoring.
WHAT CAN BE FINANCED
• Ecological-Economic Zoning;• Monitoring systems;• Capacity building;• Property management systems;• Infrastructure equipment;• Information and communication systems.
POSSIBLE BENEFICIARIES
• Environmental, property and support organs (federal, state and municipal);
• Environmental law control entities.• NGOs
INSTITUTIONAL MODERNIZATIONAND DEVELOPMENT
GOAL • To support processes for sustainable production, commercialization and use of natural resources.
WHAT CAN BE FINANCED
• Timber & non-timber products’ chain;• Integration of forestry, agriculture and cattle-raising;• Forest Certification;• Renewable energies;• Ecotourism;• Other sustainable production activities.
POSSIBLE BENEFICIARIES
• Co-operatives;• Settlements;• Micro, small, and medium-sized companies; • Small rural producers;• Indigenous communities;• Anchor companies, and NGOs.
SUSTAINABLEPRODUCTIONACTIVITIES
GOAL• To support innovation and scientific and technological
research associated to sustainable production practices.
WHAT CAN BE FINANCED
• Infrastructure - ST&I programs and projects;• Development of monitoring systems and
methodology;• Information systems.
POSSIBLE BENEFICIARIES
• Governmental and university research centers;• Public companies;• Scientific-technological institutes;• NGOs.
SCIENTIFIC AND TECHNOLOGICAL DEVELOPMENT
GOAL • To support protected forest areas.
WHAT CAN BE FINANCED
• Creations and implementation of new Conservation Units;
• Consolidation of existing ones;• Monitoring of its biodiversity;• Preservation of its genetic resources;• Payment for environmental services.
POSSIBLE BENEFICIARIES
• Federal, state and municipal programs and projects;
• Public-private programs and projects;• NGOs.
PROTECTED AREAS
FUNDRAISINGFLOW CHART
The Forestry Service prepares a report defining reduction of emissions from data produced by Inpe. The report is assessed by the Technical Committee.
The Forestry Service sends the report to the BNDES and assigns the
amount to be reduced and the amount per ton of CO2.
The BNDES starts raising funds in accordance with the defined windows.
1
2
3
Fundraising
• Based on reduced emission from deforestation
• New resources are only raised when emissions in the Amazon have in fact been reduced.
• Emissions avoided are based on the deforestation reduction compared to the 10-year average deforestation rate, revised every five years
• If deforestation rate is higher than the average rate, the Fund will not be able to raise funds in that year
• Emissions are calculated as of the deforestation rate per hectare in the year.
Monitoring system for the Brazilian Amazon: INPE (since 1988)
Prodes Methodology (Deforestation Monitoring Project in the Legal Amazon)
Equivalence of Carbon per Hectare of Forest
• The Amazon Fund uses the value of 100 tC/ha (tons of carbon per hectare) of biomass corresponding to 367 tCO2e/ha (tons of carbon dioxide per hectare);
• An extremely conservative value when compared with literature data (from 130 to 320 tC/ha), but adequate to the simplicity intended for the computation method and helpful to its understanding.
T
DR
1996 2005 2006 2011 2016
REPRESENTATION OF THE CALCULATION MODEL TO CALCULATE THE REDUCTION OF EMISSIONS
26
Fundraising
Fundraising Kickoff
The Norwegian Government announced that it will provide the Amazon Fund with US$ 1 billion over the next four to seven years.
2009: US$ 110MM2010: US$ 110MM2011: at least US$ 110MM
First donation: Norway
RECOGNITION
Donors contribute to the Amazon Fund
and receive a non-transferable
diploma, declaring the corresponding
amount of emissions that were
prevented.
*donations do not generate any credit
• Manager (BNDES)
• Technical Committee (CTFA)
• Steering Committee (COFA)
Governance
• Composed of six notables in S&T, appointed by the Ministry of the Environment, based on a list submitted by the Brazilian Climate Change Forum
• The committee validates:Annual deforestation rate (measured by the National Institute for Space Research - INPE)Average historical deforestation rateEstimates of the forest carbon stock (determined by the Brazilian Forest Service)
• CTFA´s report shall determine the quantity of reduced emissions and authorize BNDES to raise the corresponding funds and issue diplomas
Technical Committee (CTFA)
• Responsible for the definition of strategic guidelines and criteria for the funds application
• The committee is constituted by representatives of governments and society
Nine agencies of the federal governmentNine states of the Brazilian Legal AmazonSix representatives of civil society
Guidance Committee (COFA)
• Ministry of the Environment• Ministry of Development, Industry and Foreign Trade• Ministry of Foreign Affairs• Ministry of Agriculture, Farming and Supply• Ministry of Agrarian Development• Ministry of Science and Technology• Presidential Staff Office• Strategic Affairs Secretariat of the President’s Office• Brazilian Development Bank - BNDES
Federal Members of COFA
One representative of each Legal Amazon state with an official plan for forest preservation and deforestation-fighting:
State Members of COFA
• Brazilian Forum of NGOs and Social Movements for the Environment and Development (FBOMS)
• Coordination of the Brazilian Amazon Indigenous Organizations (COIAB)
• National Industry Confederation (CNI)
• National Forum of Forest Activities (FNABF)
• National Confederation of Workers in Agriculture (CONTAG)
• Brazilian Society for Science Progress (SBPC)
Civil Society Members of COFA
• Priorities CriteriaGeographic
Projects carried out in the Environment Ministry’s assigned priority municipalitiesProjects in the areas of influence of PAC (Infrastructure Development Project)Projects carried out in municipalities / regions with higher conservation of forest cover
ThematicAdd value to the standing forestImprove regional development and land regularizationOrganize and integrate the systems of environmental control, monitoring, and enforcement
Criteria and Priorities
• Priorities Criteria
Diversity of Stakeholders Projects that involve cooperation among the public and private sectors, NGOs/social movements and local communities
Target PublicProjects with direct benefits to traditional communities, agrarian reform settlements and small-scale farmers
RelevanceProjects with high replication potential Projects with high impact (ex. R$/ hectare of protected forest or sustainably managed)
Criteria and Priorities
• Equity Criteria of Resource Application
Avoid concentration of project resources in specific States
Avoid concentration of resources among categories of
proponents
Avoid concentration of resources among specific
areas of concentration
Criteria and Priorities for 2009/2010
Guidelines and Investment Criteria
Guidance Committee of the Amazon Fund
Guidelines and Investment Criteria
Guidance Committee of the Amazon Fund
Project Implementation
Local Government, NGOs
Project Implementation
Local Government, NGOs
Approval and monitoring of projects BNDES
Approval and monitoring of projects BNDES
Calculation of deforestation ratesNational Institute of Space Research – INPE/MCT
Calculation of deforestation ratesNational Institute of Space Research – INPE/MCT
Calculation of prevented emissions
Brazilian Forestry Service –SFB/MMA
Calculation of prevented emissions
Brazilian Forestry Service –SFB/MMA
Certification of prevented emissionsTechnical Committee of the Amazon FundCertification of prevented emissionsTechnical Committee of the Amazon Fund
FundraisingBNDESFundraisingBNDES
Donors
Governments, Companies, NGOs, Individuals
Donors
Governments, Companies, NGOs, Individuals
Independent audit Independent AuditorsIndependent audit Independent Auditors
Governance
Contribution to monitoring & consolidating itsresults, through the analysis of the projectssupported and their impact indicators.
LOGICAL FRAMEWORK FOR THE AMAZON FUND
STRATEGICTARGET
REDUCTION OF DEFORESTATION WITH SUSTAINABLE DEVELOPMENT IN THE AMAZON REGION
PURPOSE
COMPONENT1Activities that maintain the standing forest are economically attractive in the Amazon Biome
COMPONENT 2 Government efforts assure the adequacy of anthropicactivities to the environmental legislation
COMPONENT3Area of the Amazon Biome has undergone land-use planning
COMPONENT 4Science, technologyand innovation activities contribute to the recovery, conservation and sustainable use of the Amazon Biome
OPERATIONAL FLOW OF PROJECTS
6. UNDERPERSPECTIVE Reception of a Previous Consultation.
5. CONSULTATIONLETTER
Reception of the documents listed in Previous Consultation.
4. ELIGIBLEThe project complies with the operational policies of the BNDES and the guidelines and criteria of the Amazon Fund.
3. UNDERANALYSIS
At this stage, the is the Amazon Fund team, begin a detailed review of the project.Matrix of Results/Logical Framework
2. APPROVED BNDES’ Board of Directors. Once approved, the applicant is requested to send the documentation required for contracting.
1. CONTRACTED
Contract signaturedisbursements - in installments, in accordance with the progress of the project.follow-up by the Fund’s operational team & by independent auditors. Disbursements are made
APPROVED PROJECTS - 2009
BENEFICIARY AMOUNTOF SUPPORT
AMAZON SUSTAINABLE FOUNDATION(FAS)
R$ 19.2 million(US$ 11 million)
AMAZON INSTITUTE OF PEOPLE AND THE ENVIRONMENT (IMAZON)
R$ 9.7 million(US$ 5.6 million)
INSTITUTE OF ENVIRONMENTALCONSERVATION – THE NATURECONSERVANCY DO BRASIL TNC BRASIL
R$ 16 million(US$ 9.2 million)
OURO VERDE INSTITUTE R$ 5.4 million(US$ 3.1 million)
BRAZILIAN BIODIVERSITYFUND (FUNBIO)
R$ 20 million(US$ 11.5 million)
Approved Projects in 2009
Total of BRL 70,3 million = USD 40,4 million
Projects deal with:
protected areas, enviromental’s servicespayments to communities, enviromental rural producers registrations, monitoring, stimulation to sustainable activities, recover of degraded areas, familar rural production
Time to implementation varies 3-5 years
Total project’s areas equivalents to Portugal, Denmark, Austria
APPROVEDPROJECTS –TERRITORIALCOVERAGE
STATE CAPITALS
RIVERS
ARCO VERDE CITIES
FAS
TNC, OURO VERDE INSTITUTE AND IMAZON
ARPA PROGRAM
LEGAL AMAZON
SELECTEDEUROPEANCOUNTRIES
AREAIN KM2
PORTUGAL 88,800
UNITEDKINGDOM 244,800
ITALY 302,000
GERMANY 357,000
SPAIN 507,000
FRANCE 552,000
APPROVEDPROJECTS –DETAILS
TNC – THE NATURE CONSERVANCY (BRAZIL)AMAZON FUND US$ 9.1 millionTOTAL AREA 120,000 km2 - Larger than AustriaPROJECT The TNC project will encourage environmental
registration of rural producers in 12 municipalities, 7 located in the state of Mato Grosso and 5 located in thestate of Pará. The main productive activities in the areainvolve wood production, cattle-raising and soybeanharvesting.
APPROVEDPROJECTS –DETAILS
IOV – OURO VERDE INSTITUTEAMAZON FUND US$ 3.1 million
PROJECT Stimulate the environmental recovery of degraded areas and help family farms in 6 municipalities located in the extreme North of the state of Mato Grosso, by introducing combined agricultural and forests systems. Such systems allow forest management, agricultural production and animal-raising in the same area in a sustainable way.
APPROVEDPROJECTS –DETAILS
ARPA – PROTECTED AMAZON AREASAMAZON FUND US$ 11.4 millionTOTAL AREA 320,000 km2 - Equivalent to NorwayPROJECT The FUNBIO-ARPA Program halts deforestation by
creating and consolidating new Conservation Units. In its first phase, the project created 62 Conservation Units. The goal now is to support the creation of new Units and consolidate existing ones.
FAS – AMAZONAS SUSTAINABLE FOUNDATIONAMAZON FUND US$ 11 millionTOTAL AREA 100,000 km2 - Equivalent to PortugalPROJECT Expand the Forest Allowance Program (Income and
Association) in Conservation Units of Sustainable Use, in which traditional populations are permitted to remain. The Program’s purpose is to prevent and control deforestation, by providing payment for environmental services, stimulating sustainable productive activities and improving the living standards of the forest population.
APPROVED PROJECTS –DETAILS
IMAZON – AMAZON INSTITUTE OF PEOPLE AND THE ENVIRONMENTAMAZON FUND US$ 5.5 millionTOTAL AREA 66,640 km2 - Equivalent to PortugalPROJECT Mobilization of local society, state and federal
governments in 11 municipalities in the state of Pará. The goal is to collect environmental and land-related data from rural properties and to accelerate the registration of land owners at the Environmental Rural Registry.
APPROVED PROJECTS –DETAILS
In August 2010, the Amazon Fund portfolio contained a total of 78 projects, categorized according to the following criteria:
• distribution of the requested value;
• BNDES’ operational level;
• territorial scope;
• area of activity; and
• operational category
CURRENT PORTFOLIO
Portfolio in 08/31/2010
AC: Acre
AM: Amazonas
MA: Maranhão
MT: Mato Grosso
PA: Pará
TO: Tocantins
RO: Rondônia
RR: Roraima
RJ: Rio de Janeiro
SP: São Paulo
MG: Minas Gerais
BA: Bahia
ES: Espírito Santo
CURRENTPORTFOLIO
CURRENTPORTFOLIO
AC: Acre
AM: Amazonas
MA: Maranhão
MT: Mato Grosso
PA: Pará
TO: Tocantins
RO: Rondônia
RR: Roraima
RJ: Rio de Janeiro
SP: São Paulo
MG: Minas Gerais
BA: Bahia
ES: Espírito Santo
Portfolio in 08/31/2010
CURRENTPORTFOLIO
Portfolio in 08/31/2010
CURRENTPORTFOLIO
Portfolio in 08/31/2010
I management of public forests and
protected areas;
II environmental control, monitoring and
inspection;
III sustainable forestry management;
IV economic activities developed through
the sustainable use of the forest;
V ecological and economic zoning, land-
use planning and land title regularization
VI conservation and sustainable use of
biodiversity; and
VII Recovery of deforested areas.
CURRENTPORTFOLIO
Portfolio in 08/31/2010
AP: Forests and Protected Areas
(Environmental Management and
Services).
APS: Sustainable Production Activities.
S&T: Scientific and Technological
Development applied to the sustainable
use of the biodiversity.
ID: Institutional Development and
enhancing of control mechanisms.
CURRENTPORTFOLIO
Portfolio in 08/31/2010
• Monitoring framework, including project level • Annual Reports• Independent and external financial and compliance
auditing• Diploma issuance to donors.
Transparency and Accountability
• Public information: guidelines’s framework, elegible areas, COFA’s guidelines and priorities, fundamental criterias and general BNDES’s
procedurescurrent portfolio
• Contracts are public
Transparency
Accountability
Dialog and Communication
• Specific Website• Advertising campaign• “Amazon Fund” trademark• Publicity Film• Bulletin Amazon Fund• FAQ• Mail Box (Contact us section)• Amazon under debate
• Donors• Multistakeholders:
Civil society, Brazilian and international NGOsFederal, State and Municipal OrgansAcademia and Specialized InstitutionsPress
Communication
Dialog
TRANSPARENCYAND COMMUNICATION
www.fundoamazonia.gov.br
www.amazonfund.gov.br
Powerpoint
Slide show
Pen drive
Banner
Folder
Releases
Annual report
Advertising Campaign:
COMMUNICATIONPRODUCTS
Land property conflicts and other irregularities
Non-conforming or non-focused proposals
Source of indicators to logical framework
Small-sized projects
International operations
Managing expectations
Multistakeholders dialog
Chalenges
11) Reverse the loss of forest cover through SFM
22) Enhance forest-based economic, social and environmental benefits including improving the livelihoods of forest dependent people
33) Increase the area of protected forests and increase the proportion of forest products from SFM
44) Reverse the decline of ODA for SFM and mobilize new financial resources from all sources for the implementation of SFM
Global Objectives (of SFM)
E Effective implementation of SFM is critically dependent upon adequate resources, capacity development and the transfer of environmentally sound technologies
EEnvironmentally sound technologies are not just individual technologies, but total systems which include know-how, procedures, goods and services, and equipment as well as organizational and managerial procedures
LLikewise, a fund like the Amazon Fund is not just a distribution mechanism . It must comprise a total system’s approach and must deal with the innumerable dimensions of development
SFM contributes to . . . . . . . development goals
● The role of national policies and development strategies cannot be overemphasized
● To maintain and enhance support to analytical work and knowledge generation
● Creating an effective enabling environment for investment in SFM
● Creating an enabling environment for the involvement of and investment by local communities and other forest users
● Encouraging the development of mechanisms, including systems for attributing proper value, to the benefits derived from goods and services provided by forests
● Supporting livelihoods and income diversification from forest products and services for small-scale forest owners
Recognizing, emphasizing, recalling
● The implementation of SFM is critically dependent upon good governance at all levels
Stressing
Noting
● Grants ≠ non-reimbursing loans
● A good idea does not necessarily mean a good project
At its outset, the Amazon Fund must have contributed to bequest to future Amazon generations a whole new array of regionally involved, capable, financially sound, transparent and accountable players able to support a new sustainable development dynamics for the region