High Impact Investment

Forests as an attractive asset class 

  • Growing asset class worldwide with attractive return on investment

  • Unique diversification vs traditional asset classes – more or less uncorrelated

  • Shift from semi-natural forests to high yield plantations

  • Diversifying away from traditional pulp, sawn timber/logs to include renewable energy, woody biomass-based materials (i.e. liquid fuels, charcoal) and ecosystem markets (carbon, biodiversity)

  • New diverse regimes encompassing high yield plantations, agriculture and conservation management systems

  • Positive projections on global demand

 

Gold Standard Carbon Credits

Trees capture carbon dioxide through the photosynthesis, thus representing the largest storage place for carbon in the world. This storage place has a specific value in the carbon market developed over the years since the signing of the Kyoto protocol. The market value is expressed through the price of one metric ton of Co2-equivalents. These are often called “carbon offsets” or "carbon credits".

In the voluntary market, individuals, companies, or governments purchase carbon offsets to mitigate their own greenhouse gas emissions from transportation, electricity use, and other sources. 

The Nicaforest High Impact Reforestation Program is Gold Standard certified, giving the option to commercialize Carbon Credits in the premium voluntary market,

Shared Benefit Agreements.

The Nicaforest Reforestation Program is planting on leased land where the payment is payed in accordance with the cash-flow form sales of timber and carbon credits. Therefore no funds are allocated for procurement of land.

This reduces the investment levels dramatically as well as mitigates both financial and operational risk.

There are several benefits with this approach:

–  All operations focused on the forestry assets (timber and carbon) as the core business reduces operational costs and risks in the long run. Real estate is a different type of  industry and would require a less focused approach. Choice of land vs. utilisation of land would have to be a combination of forestry related issues and real-estate issues.

– Not buying land makes it much easier for investors to exit. When the forestry assets are sold during or at the end of the growth cycle (as timber or standing trees), there is no need to find a buyer for the land, which can be a lengthy process in rural Nicaragua.

– Risks are severely reduced. Financial risk, through the much lower investment, market risk since there is no land to sell, operational risk through the focused approach and political risk though no foreign land ownership.

– The Nicaforest Reforestation Program overlap Nicaraguas REDD+ – areas as well as areas allocated for the 20by20 Initiative by World Resource Institute contributes to security as well as reduced political risk.

Teak

  • Traditional hardwood with long history and multiple uses

  • Growing demand (and limited supply) for plantation teak with known origin

  • Major market drivers:

    • Restricted logging of natural forests, especially Asia. (banned in Thailand, Laos,   India, restricted in many other Asian i.e. Myanmar)

    • Strong demand from large markets, especially China and India.

    • Competitive wood properties compared to substitutes

  • High biomass growth

  • Teak plantations has reached a level of industry and developed practices.

Return on investments

Nicaforest invites investors to share the revenues derived from the establishment and maintenance of forest plantations. Sale of timber throughout the growth cycle represents the largest revenue stream.  The return on investment from a reforestation project is very difficult to estimate because of the long cycle. However, benchmarking shows a variation between 8% – 15% based on wood revenues. Sale of Co2-offsets may increase this by 1-4%.

Across Forest AS, Storgt. 85,

9008 Tromsø, Norway.  

phone: +47 913 35 558  

e-mail; post@across.no

Nicaforest Plantations S.a, Villa Sandino, Chontales, Nicaragua.  

phone: +505 8995-2125

e-mail; cjperez60@gmail.com or  jhr@nicaforest.com