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Investor Presentaiton

ECONOMIC VALUATION OF REFORESTATION - PROJECT VERENA VERENA is a Portuguese acronym for Economic Valuation of Reforestation using Native Species and Agroforestry Systems. This project seeks to demonstrate the technical and economic viability of large-scale restoration and reforestation using native species, highlighting the social and environmental benefits of this approach. Native Brazilian tree species have existed for thousands of years; however, there are no records of these species from the capital market perspective. In this respect, the VERENA project has four principal ambitions: (a) construct a portfolio of projects and attractive experiences for investors and financiers; (b) assess the tropical timber market in Brazil and the rest of the world from the point of view of volumes and prices to comprehend the viability of native species silviculture and agroforestry systems in the country; (c) increase the scale of business models through the leading production chains; and (d) reduce perceived risk and increase return through a research program involving tree species native to Brazil. Guided by these goals, throughout 2018 the VERENA project helped disseminate business models among farmers at national and international events. The farmer engagement strategy also involved the collaboration of the planted forest industry, through participation at meetings with Regional Forums for Dialogue on Forestry in Paraná, Santa Catarina and the Far South of Bahia, home to Brazil's leading forestry companies. Also, in the south of Bahia, VERENA developed a regional case study to present to potential investors. Meetings with the financial sector and private investors helped unlock funding to support farmers in implementing VERENA business models. One example was the BNDES (Brazilian Bank of Development) relaunch of a financial program with low interest rates for the restoration and implementation of agroforestry systems. As part of Initiative 20x20, a round table meeting brought together six major investors and nine project developers in São Paulo with the aim of connecting projects with sources of funding. WRI Brasil played a vital role in organizing the meeting, analyzing potential projects and helping project developers to prepare solid proposals for presentation to investors. VERENA also coordinated the creation of the Terms of Reference (TOR) "Analysis of R&D Gaps and Priorities for Native Species Silviculture", which is part of one of the priority actions of the Brazil Climate, Forests and Agriculture Coalition, which is heading up the action. A group of specialists was selected to implement the ToR, with the support of the World Bank - PROFOR. Activities include the establishment of a research and development platform aimed at native species. This effort was completed in December and the final report was submitted to the World Bank for final approval. Based on similar initiatives, the VERENA project seeks to build a culture around a new forestry and agroforestry economy, which is the basis for engagement and support for farmers, the private sector, financial institutions, governments, organizations, and academia. It sets a new, economically viable direction for the sector and contributes directly to Brazil's commitment to dealing with climate challenges, with a focus on increasing forest cover in degraded areas and in bolstering forestry and low carbon economies. LANDSCAPE RESTORATION The collapse of the Mariana Dam in Minas Gerais shook Brazil to its core. Following this tragic event in November 2015, WRI Brasil established a partnership with the Renova Foundation to identify and map opportunities for landscape and forest restoration in the region of the greater Gualaxo do Norte basin. The region is dominated by dairy cattle farming and there is an urgent need to replant the landscape's trees to ensure climate resilience. WRI Brasil staged workshops to promote the concept of forest restoration and agroforestry among the local population and assisted in implementing demonstration units. We also applied the Restoration Opportunity Assessment Methodology (ROAM), developed by WRI in partnership with the International Union for Conservation of Nature (IUCN), to assess restoration opportunities with the best ecological and economic outcomes. Following a spatial analysis of the region, engagement activities are being staged together with the establishment of demonstration units under three different models: silviculture with native species with economic purposes, agroforestry systems and ecological pasture management. The implementation of the units included partnerships with ICRAF (International Centre for Research in Agroforestry) and Fazenda Ecológica (Ecological Farm). 34 WRIbrasil.org.br WRI BRASIL 2018 ANNUAL REPORT 35
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