Investments of NOK 300 million were unlocked in Brazil

Through the preparation of a national restoration plan in Brazil, investments of NOK 300 million were unlocked for restoring 3 million ha of forest by private sector. Tangible results were also achieved in the other project countries; Ghana, Guatemala and Mexico.

Why did Norway decide to support this project?

The thematic category sustainable landscape was a priority for NICFI. REDD+ forest landscape restoration and private sector engagement combined focus on a gap and a niche that was not at the time of application systematically addressed. The project would draw on established partnerships at the local and global level and build on activities that are already in place. 

Results

Norad finds that most planned results have been achieved. Below follows a description of IUCN’s reported achievements:

Overall, the project wanted to demonstrate how sustainable forest landscapes can enhance carbon stocks and improve social and economic returns to farmers, communities and investors, facilitated by private sector investments

This was done through three outcomes:

1. Local, national and international partners mobilized with capacities to identify, negotiate and agree the terms of forest landscape investment opportunities
2. Investments in carbon intensive sustainable landscape restoration aimed at delivering a suite of co‐benefits piloted and scaled up
3. Real‐time feedback loops demonstrate and communicate successful investment strategies to national, regional and international policy makers and international investors

 Outcome 1 

• The knowledge generated and tools used unlocked commitments to finance restoration from the private sector, at higher levels than had been expected at the outset of the project. This is particularly notable in Brazil and Guatemala.
  
  
• In Brazil, the national restoration strategy (PLANAVEG) integrated private sector investment into strategic plans. PLANAVEG helped to unlock investments of nearly NOK 300 million, and engaged the private sector in a broad debate on financial mechanisms to leverage restoration in Brazil. 
  
  
• In Guatemala, three business models were developed for landscape restoration through cocoa agroforestry systems, Guatemalan fir, and riverbank forest restoration. These models  served as inputs for the PROBOSQUE Act and will guide future investment by both the public and private sectors. 
  
  
• In Ghana, new maps on the condition of forest reserves helped the Forestry Commission to delineate the areas suitable and available for restoration activities where Public Private Partnerships could be established. 
  
  
• In Guatemala, project supported outputs such as the Guatemalan Potential FLR Map, an analysis of the legislative and regulatory framework, three restoration business models, resulted in the development of the National Restoration Strategy. 
  
  
• In Mexico, a geospatial model was defined which identified priority areas for the implementation of pilot actions for restoration and investments.

Outcome 2 

• In general, the project’s engagement with private sector, communities and civil society stakeholders strengthened their capacities to negotiate and agree to the terms of investment opportunities. The project also helped develop a market for restoration.
  
  
• For example, in Brazil, the project supported the structuring of seedling  production (part of the restoration productive chain); it also formalised trade agreements for restoration between the private sector and seedlings producers. Elsewhere, the project helped establish agreements between landowners and investors, based on analysis of investment cases. Investments unlocked in part by the project are expected to lead to the restoration of nearly eight million hectares in the Amazon and two to four million hectares of the Atlantic rainforest. These restoration efforts will ensure community access to capital and a suite of landscape management options to improve carbon storage and farmland productivity. 
  
  
• By contrast, in Ghana, piloting and scaling up restoration investment opportunities proved to be difficult. Based on project-supported studies, a number of barriers to the development of restoration-related value chains were identified including: 1) inadequate policy support ii) lack of competition in some value chains iii) inadequate hard and soft infrastructure, iv) institutional gaps; v) low production yields and vi) inadequate business and technical management skills among actors. Investment opportunities were identified to exist in the production and processing parts of the value chains as the profitability tests carried out returned positive net worth by almost all identified crops. Ghana’s continued stable political environment is a favourable condition for attracting long term funding required for restoration-related investments. However, improvement in the current macroeconomic environment in terms of high budget deficit, unstable exchange rates and high interest rates as well as the readiness of restoration environment were identified as necessary conditions for attracting investments. In response to these challenges, a ‘roadmap’ for investments in restoration in Ghana was  produced, led by a private sector project collaborator, and collaboratively developed by private sector companies and forest stakeholders.  

 Outcome 3

• In general, at the national and international levels, information was communicated in time to influence changes in policies, laws, and debates:
  
  
• In terms of changing the content of national discussions on investing in Forest Landscape Restoration (FLR), in Brazil, IUCN  co-organised a high-level dialogue on restoration in Brazil which had a strong presence of the private sector. More than 600 people, including notable representatives from different sectors (e.g. politics, business, commercial forestry) gathered to exchange ideas on finance mechanisms, governance and engagement of the private sector. 
  
  
• In Guatemala, IUCN supported the development of the National Restoration Strategy. This process was spearheaded by the development of the National Forest Landscape Restoration Table (MNRPF) which joined more than 40 actors from governmental institutions, decentralized governmental entities, academia, civil society, private sector, and finance sector. Political, technical and strategic level decisions related to building and implementing the National Restoration Strategy are taken by this body. The project-funded reports and knowledge shared during the MNRPF directly contributed to discussions which helped  develop the strategy.
  
  
• In terms of contributing to national REDD+ strategies, in both Mexico and Ghana, project findings and lessons were integrated into the National or subnational REDD+ Strategies. Furthermore in Mexico, during the launch of the Regional Climate Change Committee of the Yucatán  peninsula (CRCCPY) by the three states together, it was agreed, following IUCN’s request, to establish a restoration Regional Committee within the CRCCPY for validation of the regional restoration strategy. As a result of this process, official pledges to the Bonn Challenge by the states of Campeche, Yucatán and Quintana Roo were launched at the COP21 in Paris.
  
  
• A strategic partnership was promoted with the Governors’ Climate and Forests Task Force (GCF), which, in Mexico, includes five states. The alliance will promote the uptake of the restoration strategy and the Bonn Challenge within the GCF and other South-South cooperation networks linked to the GCF platform, allowing for broader learning exchanges. In partnership with IUCN’s Global Gender Office, an Action Plan on gender and REDD+ for the Yucatán Peninsula was developed and guidelines were produced for mainstreaming gender into mitigation and adaptation efforts in the Yucatan Peninsula. These documents ultimately led to incorporating gender perspectives into the REDD+ Strategies for the states of Yucatán and Quintana Roo.

Lessons learned

• Investment in restoration will be favoured when the barriers to investment (e.g. regulations, national investment climate) can be improved.
  
  
• Unlocking private investments in restoration requires the engagement of the public and the private sector as well as civil society. Large-scale restoration efforts rely on private investments, yet such restoration poses high risks and offers low rates of return for investors in the short-term. National and subnational governments have the power to reduce these risks and enhance the return on investment by establishing clear regulations and fair policies to support stronger restoration value chains. NGOs also play a key role, providing technical guidance and empowering local governments. For example in Brazil, IUCN played a key role in providing technical guidance on restoration while also supporting the fora for key restoration public discussions to occur. This has raised the profile of investment in restoration in Brazil and helped to unlock NOK 300 million while also asking the critical question of how the private sector will engage with restoration opportunities.
  
  
• The successful implementation of restoration strategies is contingent upon institutional capacities and good communication between national and subnational governments. Creating round-tables (e.g. in Guatemala) or working through subnational fora (e.g. Mexico’s jurisdictional approach to REDD+ at the state level), allows for unique partnerships and knowledge exchange. Furthermore, when restoration is adopted by other organisations, there is the possibility to co-finance work (e.g. the case of Brazil where support from partners was essential to achieving project objectives). International dialogue is often focused on restoration in terms of carbon, however, both in Guatemala and in Ghana, national dialogues on restoration focus on other ecosystem services (e.g. water regulation, timber production, firewood and soil conservation etc.) that will benefit people. This difference in important messaging about restoration benefits means that stakeholders at different governance levels view restoration differently.
   
• The financial mechanisms needed to restore targeted, priority areas are still a challenge. In Guatemala, currently only governmental incentive programs contribute to restoration efforts significantly. In the new restoration law, a role for private sector investment is foreseen.
   
• Even though at the national level there might be an interest in implementing the REDD+ agenda, at the jurisdictional level the political interest is in promoting economic development  in the short term. For example, in Mexico, without alignment of the political priorities at the  federal and jurisdictional levels, national environmental policies cannot be implemented. Thus, a REDD+ national strategy can be effectively implemented only if subnational governments have an interest in it and take part actively in the strategic planning.
   
• A focus on restoration at the landscape scale is crucial in obtaining local and federal government support, thus allowing public programs to be used for implementing restoration activities in the field in the form of subsidies that partially support land owners initial investments. For example, in Mexico, federal subsidies are positively affecting the rate of return of the business models related to restoration activities, thus making restoration economically attractive. Within this context it is important to provide the government and the private sector with quantitative indicators for estimating the potential impact of public policies instruments and private investments.
   
• Project cycle - Balancing short term outputs vs. long term impacts: Linking a relatively short term intervention like PILaR to broader, longer term programmatic impacts is most likely possible, but requires the use of an appropriate conceptual and methodological framework, supporting by adequate funding, and adjustments and realignments. These adjustments and realignments should also take place during project implementation once issues are identified.