verde ventures overview

Verde VenturesTriple Bottom Line

Investing

Fund Overview

Mission of Conservation International

Conservation International’s mission is to conserve the Earth’s living natural heritage, our global biodiversity, and to

demonstrate that human societies are able to live harmoniously with nature

Conservation International’s mission is to conserve the Earth’s living natural heritage, our global biodiversity, and to

demonstrate that human societies are able to live harmoniously with nature

Conservation International’s mission is to conserve the

Earth’s living natural heritage—our global biodiversity—and to

demonstrate that human societies are able to live harmoniously with nature

Conservation Funding Division

� Critical Ecosystem Partnership Fund� Provides grants to civil society to enhance their capacity to conserve

biodiversity� Global Conservation Fund

� Provides grants for the establishment and long-term financing of protected areas

� Verde Ventures � Provides loans for small and medium enterprises which contribute to

conservation of biodiversity� Global Marine Partnership Fund

� Fund in development to provide grants for marine protected areas� Climate Community and Conservation Fund

� Fund in development to provide grants for carbon projects

Our Purpose

Verde Ventures invests in small businesses that contribute to conservation

and communities in Conservation International's global priority areas

Why Verde Ventures?

• Conservation-based employment is essential to provide economic incentives for conservation• The small business sector is a key partner in the intersection between human welfare and conservation• Lack of available, affordable capital to ensure the sustainability of the sector

Core Products

� Loans: US$30,000 to $500,000 (average: $125,000)� Use of Loan funds: Infrastructure, working capital, trade

finance� Typical Deal Structure: Senior or subordinated secured

debt for 3-5 years. Increasingly debt + quasi-equity.� Strategic grants for technical assistance and

environmental and socio-economic monitoring

Fund Overview

Sectors Invested Regions Invested

Mexico

El Salvador

Guatemala

Peru

Bolivia

Costa Rica

Chile

Belize

Ghana

Ecuador

Indonesia

Kenya

Mozambique

Investment Map

Triple Bottom Line Results

Environmental

Direct Hectares Impacted (within project area) 308,009

Indirect Hectares Impacted* 3,031,587

IUCN Red-listed Species Impacted 191

Financial

Fund Costs Covered with Non Grant Revenue for FY08 85%

Sales Generated by Businesses Supported $31,786,841

Leveraged Funding $3 million

Social

Total Direct Beneficiaries 15,125

Total Indirect Beneficiaries** 42,467

Percentage of Female Direct Beneficiaries (of total) 30%*Indirect includes area under the project’s influence, but not direct ownership control

**Immediate family members of direct beneficiaries (direct beneficiaries are project employees)

Governance

• Biodiversity Committee– Internal committee to CI– 3 permanent members and 1 regional staff– Meets about 3-6 times per year

• Investment Committee– External committee – 7 permanent members – Meets quarterly

Invested Project Summaries

Rainforest Expeditions, Peru

• Amount: $360,556 (2 loans)• Sector: Ecotourism• Use of funds: Lodge upgrade• Deal Structure: 2 loans secured

against local collateral. Co-invested with 2 other lenders.

• Impacts: 2 lodges directly protecting 2,500 hectares and providing direct income to 316 local, indigenous people

Ibo Island Mozambique

� Amount: $495,000

� Sector: Tourism

� Use of funds: To renovate and expand its existing lodge in northern Mozambique

� Deal Structure: Invested and secured with collateral for 5 years.

� Impacts: Improved management of National Park (750,000 hectares) through ecotourism led job creation for 40 community members

Rolf Wittmer Turismo, Galapagos

� Amount: $250,000� Sector: Tourism� Use of funds: To finance new certified

boat and hire local fisherman as tour guides

� Deal Structure: Loans secured against local collateral

� Impacts: Benefit the local community by providing an employment alternative to unsustainable fishing in the Galapagos Islands

Coffee Investments

� $10.5 invested in 23 sustainable coffee suppliers (5 countries in Latin America and Asia)

� 100% trade finance secured on contracts (Starbucks etc.)� 95% on-time repayment� Directly benefiting 7,500 small farmers and more than

440,000 hectares of biodiversity-rich forest.

Monitoring

• Financial: Business Performance Measurements• Environmental: Baseline survey + annual site-

relevant indicators for measuring environmental change during the investment period

• Social/Economic: Baseline household/community survey + annual indicators measuring change in socio-economic conditions of project beneficiaries

WH-LEEP

World Heritage Local Ecological Entrepreneurship Program

• New partnership with the United Nations Foundation, the United Nations Development Programme’s Small Grants Programme (SGP)

• Blended capital approach to finance projects located in World Heritage Sites in 7 countries (Belize, Dominica, Kenya, Mexico, Philippines, Tanzania and Madagascar)

• Focus on capacity building for community based enterprises

• UNF financing the grant mechanism for capacity building and a 75% guarantee of VV invested loan capital

Risk Management

• Thorough due diligence and oversight• Use of CI local networks in 40 countries• Invest with other lenders (also reduces costs)• Invest only in US$ and work with companies receiving hard

currency revenues • Repayment terms of not more than 5 years.• At least 1:1 collateral secured under local law• Loan Loss Reserve Requirement averaging 10% of

outstanding capital

Mainstreaming Biodiversity Financing

• Recognition that scalability must occur with commercial banking and private equity sectors.

• Supply: Financing incentives needed to encourage banks to lend to sustainable SMEs.

• Demand: Maturation of specific sectors to become bankable- partially through help of boutique, blended (loan/grant) capital and technical assistance.

Key Lessons

• Investment capital in the US$30,000 to $500,000 range can be effectively used to achieve conservation, social and financial returns.

• Strategic use of grant funds with investment capital can greatly enhance project’s success.

• Direct financial incentives (eg. interest rate reductions) should be used to further improve conservation returns on investment.

• Triple-bottom line (environmental, social and financial) monitoring is crucial, yet expensive.

• Guarantee funding is crucial for early stage SMEs in developing markets

The Road Ahead

• Raise at least $10 million in loan capital within the next 5 years.

• Raise at least $1.2 million in additional grant funding for capacity building and monitoring program.

• Directly impacting 6 million hectares of key biodiversity landscape on 3 continents

• Supporting business which employ 30,000 local people with few other opportunities

• Demonstrating and replicating triple-bottom line success model (self-sufficient in 3 yrs)

• Replicate Monitoring program

Thank You!

For more information, please visit:

www.conservation.org/verdeventures