This presentation by Víctor Galarreta was given at a session titled "Promoting Private Investment for Green Growth in Peru" at the Global Landscapes Forum: The Investment Case on June 10, 2015. For more, please visit http://www.landscapes.org/london/

1. NATIONAL FOREST AND CLIMATE
CHANGE STRATEGY
PROMOTING PRIVATE INVESTMENT FOR
GREEN GROWTH IN PERU
Víctor Galarreta

2. SALIENT FEATURES OF THE
PERUVIAN AGRICULTURAL SECTOR

3. Climate Change and Agriculture

4. Micro Deforestation: coffee and
livestock
Peruvian agriculture is a plotter economy ,
where 85% of farmers have plots less than
10 hectares , predominantly productive
units, with an area between 3 and 10
hectares (33%)

5. Megadiverse Peru = Risky

6. Mega Diversity: High
Risk (Adverse
Selection). High
interest rates
Smallholders: High
transaction costs
Incomplete or
nonexistent markets
Only 10% of agricultural
units requested a credit
(CENAGRO 2012) and
only 9% had access.
FINANCIAL MARKET FAILURES:
DEFORESTATION DRIVER?

7. Promote the development of climate-
smart territories
How can we make this happen ?

8. GREEN DEVELOPMENT OF RURAL
TERRITORIES
Green Growth of
Agriculture:
Inclusive,
Sustainable and
Competitive
“Boutique”
Productos, not
Commodities
Low Carbon Coastal
Agriculture ,
competitive and
complementary to
the Amazon.
Financial and
Business Models
Innovations
y Paisajes
Designation of
Origin.
Associated with
diversity, ABC
and Landscapes

9. Peru maintains an
Investment Grade, stable
macroeconomic basis
and liquid institutional
investors
Green financial
ecosystem has much
room to grow in the
country: Green
Infrastructure; Low
Carbon Agriculture;
Energy efficiency; Bio-
business.
The pipeline of
initiatives presents a gap
in its early stages. Lack
of Green Startups:
Incubation and
Acceleration
Available International
financing offer from
credit lines to Green
Bonds and hedging
instruments. The
available capital is
growing.
The Business Climate

10. Challenges and Opportunities
Many small players
involved in green
projects: Farmers,
Service users,
Communities
High risk perception of
potential projects for the
portfolio: Track Record,
volatility, social risk
Innovate business
models that bring these
medium and long term
enterprises closer to the
capital market

11. The Challenge
Innovate and
reduce distance
between
entrepreneurs and
investors
Incubate and
accelerate the
portfolio of green
projects
Build a Risk Capital Fund,
which invests in the
development of Green
Startups and “adjusts“
them in the capital
market

12. Promoting Startups towards the capital
market
Gestation Birth Development Expansion Maturity
Financing
Business support
Policies development
Green business
incubators Business ‘accelerators’
Seed capital
(FFF*)
Green angel investors
(networks)
time
Green Bonds
Funds for
green
innovation
Green loans
IPOsVenture
Capital
Private
Equity
i
Self-regulatory and regulatory mechanisms in the sectors (green banks, etc.)
Green Bonds
Carbon
trading
system
Public risk management instruments for
green projects (DCA, MIGA, PPPs, etc.)

13. A TEST OF GREEN PORTFOLIO: OUR "GREEN
CHIPS"
COASTAL EXPORT
AGRICULTURE
•Greening agricultural exports as ABC, exploring carbon neutrality.
•Complement investments on the coast with reforestation in the Amazon.
Green
Infrastructure
•Investment in Major Basins: Rimac, Jequetepeque Santa.
•Link basins with Landscapes (territories).
•Promoting collective systems for modern irrigation.
Silvicultural
Sector
•Promote Reforestation, using existing plantations as collateral.
•Develop proposal of Green Corridor parallel to Trans-Oceanic Railway Project.
•Promote Prime forest cluster with designation of origin .
Biodiversity
Portfolio
•Enhance the sale of biodiversity products on the basis of Gastronomy, Eco Tourism, Cosmetology, “shamanería”.