London-based investment bank, ARC Associates acted as advisor to Fauna & Flora International (“FFI”) in structuring its involvement in BioCarbon Group Pte. Limited (“BioCarbon”) a forest carbon investment vehicle funded by Global Forestry Partners LP, the International Finance Corporation and Macquarie Global Investments with initial commitments of $25 million.
Macquarie Global Investments (Macquarie) have announced that BioCarbon Group Pte Limited (BioCarbon) has agreed to terms with investors for a combined investment of $US25 million to target global forest carbon projects known as Reducing Emissions from Deforestation and Degradation (REDD).
The investments, provided by a timber investment fund managed by US based Global Forest Partners LP (GFP), IFC, a member of the World Bank Group, and Macquarie, which also established the company, will enable BioCarbon to identify and invest in large scale REDD projects. The first project is expected to be in Indonesia, one of the first countries to establish a legal framework for REDD.
Macquarie Global Investments Associate Director, Brer Adams, said bringing together global leaders in sustainable forestry investment and investment in developing countries means BioCarbon is very well placed to create and sustain significant REDD investments.
“BioCarbon is a pioneering company that is demonstrating the ability to link carbon finance to forest conservation, aiming to reduce carbon emissions, protect biodiversity and provide returns for its investors,” Mr Adams said.
“This investment will enable BioCarbon to develop large scale REDD projects and meet demand for forest carbon credits, which we believe will be an increasingly important part of global carbon markets.”
Peter C. Mertz, Chief Executive Officer of GFP noted that, “GFP’s investment in BioCarbon continues our 25 year commitment to investing in sustainable forestry projects that meet the highest environmental standards and support local economies. We look forward to our collaboration with Macquarie and IFC in this important and developing sector within our industry.”
BioCarbon will also benefit from collaboration with Fauna & Flora International (FFI), a relationship established by Macquarie Group in 2008. FFI CEO Mark Rose said that this unique partnership is central to the organisation’s REDD programme.
“Fauna & Flora International is delighted to be a part of this groundbreaking initiative, which demonstrates how FFI and Macquarie Group have been at the forefront of commercial investment in REDD. Together we will be demonstrating the potential to reduce deforestation, conserve biodiversity and combat climate change, while providing significant benefits to communities living in or near forests,” Mr Rose said.
John Allen, Executive Chairman of ARC Associates said, the FFI appointment to Biocarbon has been critical to the formation of the SPV which is the largest placement in an independent SPV of its kind to date. ARC is delighted to have assisted FFI in its initiative to move into this important new area which carries its core charitable objectives forward through utilizing the international market interest in carbon credits.
BioCarbon will be seeking to accredit its forest carbon projects with leading international standards including the Verified Carbon Standard and the Climate, Community and Biodiversity Standard.
FFI manages projects under the Reduce Emissions from Deforestation and forest Degradation (“REDD”) mechanism with the aim of creating tradable carbon credits that also have social and environmental benefits to areas that FFI works. The REDD carbon credits are created, after independent auditing, by conserving forests at risk from destruct ion through projects that assist local community development and maintain the underlying forest resource intact. The most advance project is working to conserve an area of Indonesian Borneo that is globally important for a number of species including the Orangutan.
The carbon credits will be marketed by BioCarbon on the voluntary carbon market, the resulting proceeds covering costs of conserving the area (including appropriate benefit sharing with local communities and governments), return to investors and support to FFI's work globally.
ARC Associates is a specialist investment bank and advisory firm serving the Telecommunications, Alternative Energy Technologies, Property, Information Technology, Media, Financial Services and other selected sectors.
Contacts:
John Allen
ARC Associates
+44 (0) 207 614 4000
johna@arcassociates.com
Mark Rose
FFI
+44 (0) 122 357 9462
mark.rose@fauna-flora.org