Session 1: Business Opportunities and Challenges in Agroforestry and Forestry: What can business do for Forest and Landscape Restoration?

Session 1: Business Opportunities and Challenges in Agroforestry and Forestry: What can business do for Forest and Landscape Restoration?
Time Content Speakers
10:30 Welcome & Introduction: Presentation of concept, agenda and participants Jan Bock and Susanne Wallenoeffer, GIZ
FLR & BUSINESS OPPORTUNITIES
10:40 Bridging the gap between forest communities, markets and investors Jasper Makala, Mpingo Conservation
10:50 Business case for sustainable biomass energy: biomass crowdsourcing Eric Reynolds, Inyenyeri
11:00 NFTP business potential of East African forests: Public-private Partnerships Elisaveta Kostova, GIZ
11:10 Discussion on the impacts that businesses have on the landscape and FLR Jan Bock and Susanne Wallenoeffer, GIZ
CONDUCIVE FRAMEWORK: ENABLING ENVIRONMENT, SUPPORT & PARTNERSHIPS
11:25 How to kick-start a commercial forestry sector based on smallholders? Paul Jacovelli, UNIQUE Land-use
11:35 Build business partnerships with farmers, companies and international
investors
Wangu Mutua, ViAgroforestry
11:45 Development of the National Forestry Strategy in Rwanda Prime Ngabonziza, RWFA
11:55 Discussion on the enabling environment for FLR business and the integration of
individual business cases/value chains into a “holistic” landscape approach
Jan Bock and Susanne Wallenoeffer, GIZ
ROUND TABLE FOR REFLECTION
12:10 The way forward towards “FLR investment readiness”:
the perspectives of markets, finance and regional cooperation
• Mirko Tuchel, Tuchel & Sohn (German Honey Importer)
• Jens Drillisch, KfW
• Mamadou Diakhité, NEPAD
Facilitators: Jan Bock and Susanne
Wallenoeffer, GIZ

Unleashing Business Opportunities for Sustainable Landscapes
Forest & Landscape Investment Forum
Session 1:
Business Opportunities
and Challenges in
Agroforestry and Forestry
What can business do for Forest and
Landscape Restoration?

FLR Definition (IUCN)
Forest landscape restoration (FLR) is the ongoing process of regaining ecological
functionality and enhancing human well-being across deforested or degraded
forest landscapes. FLR is more than just planting trees – it is restoring a whole
landscape “forward” to meet present and future needs and to offer multiple
benefits and land uses over time.
FLR manifests through different processes such as: new tree plantings, managed
natural regeneration, agroforestry, or improved land management to
accommodate a mosaic of land uses, including agriculture, protected wildlife
reserves, managed plantations, riverside plantings and more.
https://www.iucn.org/theme/forests/our-work/forest-landscape-restoration

Introducing….“the finance guy“
1) In order to bring FLR to scale we need to mobilize private
investments.
2) The money is there but we need investable business cases!

….vs. „the landscape practitioner“
A „landscape“ is not a „business case“.
But certain landscape restoration measures can be
investable, if they are integrated into value chains.

Two different ways of looking at the landscape in search of business cases
„FLR-Investment opportunities“ – a sleeping beauty?

Two different ways of looking at the landscape in search of business cases
or a long-term development strategy?

Objectives of the session
1. Have a look on some of these value chains that (potentially) contribute to
FLR and discuss how they could attract investments
2. Have a look on the framework conditions that may create the „enabling
environment“ (incl. support programmes and partnerships) for „FLR
investments“
3. Short discussion on the way forward integrating the different perspectives of
the private sector, the finance and the FLR communities
…and warming up for the focussed sessions to follow

Investing in Community Based Forest Management in Tanzania

BACKGROUND – OUR ORGANIZATION
2
Mission: to advance forest conservation and rural development in Tanzania by
facilitating sustainable and socially equitable use of forest resources

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5
10
15
20
25
30
35
40
0
50
100
150
200
250
300
350
400
2008 2009 2010 2011 2012 2013 2014 2015 2016
Communities
ThousandHa/USD
Forest Area
Timber Sales
Communities
4
30,200 beneficiariesCumulative sales exceed $610,000 in 17 villages
OUR WORK - RESULTS

Group Scheme Implementation
• Creating a network of responsibly managed forests over a
large area
• Ensuring habitats connectivity
• Maintenance of ecological processes
• Focus on areas with high densities of high value hardwood
timbers.
• Create a model to appeal investors seeking business
opportunities in sus. landscape
15
Our Work-Results

• FinnFund- Investing on sawmilling
• YAMAHA Corporation (Japan)
• Buffet crampon (France).
16
Investors already engaged

• Gradual increase of FSC certified timber
• Forest Investment Firm (FIRM) Global Timber Outlook Report-
• Global sawn wood consumption could rise by 39% btn
2015/20 as developed Countries recover from recession &
sawn wood consumption skyrocket in developing Countries.
17
Opportunities

18
OUR VISION FOR THE FUTURE
Scale up model – more
forests protected
Value-add through sawn
timber production
More revenues mean
communities cover own costs
Business-oriented approach
reduces aid dependency and risk

7
VISION FOR THE FUTURE
Empowering five villages comprising more than 10,000 people to self-generate over $260,000 in communal
development funds through FSC-certified sawn-timber production
A. Moving from inefficiency primitive technology
B. To:
High efficiency technology

May 2017
We deliver the world’s cleanest
biomass fueled cookstoves
to the world’s poorest households,
through a for-profit model.
I N Y E N Y E R I
A Rwandan Social Benefit Company

Household Air Pollution
~4.3 million premature deaths / year
Rwanda 2016
~7,400 deaths

Half who die
are children
<5 years old

Black Carbon emissions from cooking
Responsible for ~5% of global warming

Rural households
3-stone fire
Woodfuel

Many households
use more than
one stove
‘Stove stacking’

Urban households
Mostly charcoal fuel
& multiple burners

Listening & Learning
5+ years, 500+ households, 5 stoves

The Mimi Moto™
micro-gasification stove
• The cleanest burning
“Tier 4” biomass fueled stove
• Adjustable gas flame
electric fan powered
• LPG/natural gas experience
• Fast lighting - begin cooking in 3 min
• No black pots – saves water & time
• Faster cooking times
• Multi-task while cooking
no fire tending required
Rwandan ‘Mamas’ simply love cooking
with this stove & Inyenyeri ‘Pareti™ Gaz’ fuel
Insert video later

The Cleanest Biomass Fueled Stove
No black pot after 2.5 hours cooking with only 800gms of pellets

You can’t sell a cookstove
to someone who has no money
• So we don’t try
– This is the fundamental error made for decades by cookstove ‘projects’
• Extreme poor can’t afford truly clean stove(s) ~$80+ each
– A quality made clean stove is a ‘one off’ sale lasting for years
• But Mamas do spend cash on fuel every day
• Inyenyeri is a Fuel Utility Company
– not a ‘cookstove project’
– We sell fuel to every household, every day
– At strong profit margins for a commodity product

Sustainable supply is disappearing rapidly. Cooking fuel
demands are accelerating. Forest deficit is growing.

“KIGALI Market Scenario ”
100,000 Rural Wood HHs and 300,000 Urban Charcoal HHs
3 Mt
2.5
Million
Tons of
Wood to
make
charcoal
2.3 Mt
of Wood
Conserved
0.35 Mt
2.5 Mt
2.0 Mt
1.5 Mt
1.0 Mt
0.5 Mt
0.18 Mt
Firewood
Business As
Usual,
400,000 HH
Same Households
Cooking with
Inyenyeri
2.7 Mt total wood
WoodConsumedPerYear

Wood Consumed Per Day
for 1 Household
5kg
~8 kg
of firewood
22 kgs
of
wood
90%
Reduction
in wood
consumed
compared
with
charcoal
85%
Reduction
compared with
firewood
Rural Households
25kg
20kg
15kg
10kg
2.63 kgs
charcoal
~1.2 kg
pellets
Urban Households
~2.63 kg
of charcoal
~2.5 kg pellets

Cooking in Rural Rwanda
35
~8kg wood/day
• Toxic smoke emissions expose children to the
equivalent of second hand smoke from 400
cigarettes.
• Up to $~80/year in wood spending for cooking
fuel, mostly during rainy season.
~1.2kg wood pellets/day
• Toxic smoke emissions reduced by ~99%.
• Non-cash use of stove(s) and ‘free’
fuel pellets.
• Less wood collected than before
• Pilot experience = 90+% participation.
Hitting the “Impact Jackpot”

Cooking in Urban Rwanda
~2 to 2.75kg/day of charcoal
(requires ~17 to 23kg of wood to make)
• High PM2.5 & CO toxic emissions.
• Charcoal cost is inflating 10+%/year
with increasing rate of deforestation.
• Current cooking cost in Kigali ~$25/month
36
~2.5kg wood pellets/day
•90% less wood than charcoal cooking
•99% less PM2.5 & CO emissions
•Multiple stoves/HH replaces all toxic legacy
cooking
•Much cheaper than charcoal (30+% savings)
•>60% adoption in targeted pilot areas

Unleashing Business Opportunities for Sustainable Landscapes
The Potential of
Non-Timber Forest
Products
The Case of Ethiopia

Contents
Ethiopian Wild Coffee
Organic Honey
Bamboo
Gums & Resins
Business Challenges
Creating
Opportunities
in the Honey Sector

Ethiopian Wild Coffee
- Grows in endangered
Afromontane rainforests
- Ethiopia is the origin of coffee=
genetic pool of coffee Arabica
- Increase smallholder income by
up to 50% compared to their
current earnings from coffee
- Volume up to 500 MT/yearly with
potential to be exported
- About 1,5m USD trade volume
- Market as specialty coffee

Organic
Honey
Honey in Ethiopia
Largest producer in Africa with
about 50.000 MT per year
High demand on the domestic
market, high price
Smallholders harvest honey
from 90% traditional beehives
Potential to produce large
amounts of organic honey
Weak processing and export
infrastructure, current yealry
export below 300 MT
Market demand
EU one of the biggest markets
for honey, demand for organic
honey is growing
Long-term lack of supply of
organic honey
1.000 MT yearly demand of
Tuchel & Sohn only
Partnership Tuchel & Sohn
and GIZ
Facilitation of business
relationship
Capacity building for local
institutions
Quality production
Certification
Support export structures

Gums & Resins
Ethiopia
has about
2,5m ha
dry forests
Gum Arabic
Myrrh
Frankincense
Overall
production
estimation
290,000 MT Exports in 2015 of
about 3,000 MT
Lack of forest
management
systems
Increase income of
vulnerable
population groups
Partnership with Repha

Bamboo
Sustainable
- front-to-end -
Business
Approach
> 3,000 farmers
Cooperatives (30)
Ethiopia holds
67% of continental
Africa’s Bamboo
resource.
African Bamboo
The regeneration
cycle of bamboo is
4-5 years!
Bamboo is a very
durable material
with multiple
uses.
Source: African Bamboo

Business Development Challenges in Ethiopia
 Lack of local skilled labour,
especially in the rural areas
 Little education on
entrepreneurship and
business development skills
 Strong regulative
environment
 Closed financial system
Source: ATA Ethiopia

Contacts
Elisaveta Kostova
Project Coordinator Strategic Alliance
Promotion of Sustainable Forest Products
Gesellschaft für Internationale
Zusammenarbeit (GIZ) GmbH
Hisham Building (4th floor),
Kazanchis Area
Addis Ababa, Ethiopia
T: +251 94 665 46 08
Email: elisaveta.kostova@giz.de
Internet: www.giz.de and www.develoPPP.de
29.06.2017

Paul Jacovelli 16.05.2017
HOW TO ENGAGE SMALL TREE FARMERS IN THE
DEVELOPMENT OF A COMMERCIAL FOREST SECTOR
Forest and Landscape Investment Forum, Rwanda

WITH REFERENCE TO E & S AFRICAN CASE STUDIES -
Important lessons can be learned from ongoing,
regional initiatives:
 Uganda’s Sawlog Production Grant Scheme
(SPGS);
 Small-medium-sized farmers in Tanzania’s
Southern Highlands and
 Planned Planted Forest Grant Scheme in
Mozambique

© UNIQUE forestry and land use GmbH
TIMBER PLANTATION DEVELOPMENT IN UGANDA
49

SAWLOG PRODUCTION GRANT SCHEME –
HOW IT WORKS
Establishment
Grants
Technical
Support
• ca.50% establishment costs;
• Performance-based grant;
• Targets and standards defined
in contracts;
• No funds paid up front;
• Min. 25 ha; max. 3,000 ha
(reduced grant for 500-
3,000ha).
• Local extension team trained
and mentored in best practices
of commercial forestry;
• Practical training courses run
regularly;
• Best practice Guidelines
published freely;
• Improved seed/clones only
permitted.

© UNIQUE forestry and land use GmbH 51
SOUTHERN HIGHLANDS OF TANZANIA
• Many thousands of small
farmers planting mostly pines
(>160,000 ha) as cash crop.
• Local demand for pine
sawtimber is main driver.
• Technical support from 2
projects (Finland & UK –
Gatsby/DFID).
• Value chain studies to
support SMEs underway.

MOZAMBIQUE
52
• Major World Bank/GoM project now in
advanced planning phase – under
Mozambique’s Forest Investment
Programme (Zambezia Province).
• Expected to launch later in 2017.
• Based partly on SPGS with additional
components for land restoration and
support on land-related issues (DUATs).

SMALL TREE GROWERS - KEY ISSUES
53
Issue Key points
BUSINESS APPROACH
• Just tree planting or establishing nurseries is often not sustainable;
• Nuclei of some larger companies important to attract investment
in processing (small scale wood processing is often very inefficient);
• Small growers have opportunity to supply these (as outgrowers).
SCALE & INFRASTRUCTURE
• Clustering SMEs important: remote and small blocks will often not
be profitable;
• Economies of scale are highly significant in forestry and
• High transport costs can kill forestry investments.
VALUE CHAINS & MARKETS
• Good understanding of value chains in each region is vital;
• SITE:SPECIES:MARKET approach strongly recommended;
• Small growers need sound advice on appropriate markets;
• Growers’ Associations can work (e.g. Forestry South Africa)
QUALITY
• The specifications for each market must be known before planting;
• Many regional examples of poor quality plantations which will not
be profitable investments
ENVIRONMENTAL & SOCIAL
IMPACT
• Commercial forestry has major social impact – jobs & rural devlpt;
• E&S standards can be tied to contracts/grants;
• Certification standards should be the goal

INVESTMENT OPPORTUNITIES
54
Key issue Uganda Tanzania Mozambique
PLANTATION TIMBER RESOURCE
COMING ON STREAM
80-100,000 ha
Pines + eucalypts
300,000 ha
mostly pines
60,000 ha
mostly eucalypts
TREE QUALITY Good -
Improved material
Mixed -
Lack of thinning
Good -
Large companies
LAND AVAILABILITY FOR NEW
PLANTING
Forest Reserves +
private
Customary +
statutory
DUAT (permission to
use land) needed
from communities
TECHNICAL SUPPORT SPGS III due 2017 Gatsby/DFID (UK)
+ Finnish Govt.
World Bank
project due 2017
OTHER HIGHLIGHTS • Clusters functioning
• Ug Timber Growers
Assn (UTGA) active
• Certified Nurseries &
Contractors
• Value chain studies
• Tree improvement
research underway
• Processing training
• Portucel investing
in Zambezia
• Guidelines
available soon

SMEs - UGANDA
55

Schnewlinstr. 10
79098 Freiburg, Germany
Tel: +49 761 208534 – 0
unique@unique-landuse.de
www.unique-landuse.de
paul.jacovelli@unique-landuse.de

Vi Agroforestry
Kenya: Kisumu, Kitale
Uganda: Masaka
Tanzania: Mara, Mwanza,
Kagera
Rwanda: Kigali
Malawi: Malawi Lake Basin
Programme

What’s in it for everyone?
•Realize mission on
improving livelihoods
•Dairy business
•Adaptation to CC
•Increase crop
productivity
•Improve soil fertility
•Carbon credits
•Realise mission to
contribute to local
community
•Milk sourcing
•Add value to Brand
•Closer relationship
with farmers
Brookside
A private
fund
An NGO
15 dairy
cooperatives

Why is this important?
- The business angle will continue long after the project
- This ensures sustainability
- Likelihood of the activities growing as the dairy business grows
- Bringing the real business dynamics closer to the farmers who
otherwise have been more on subsistence farming.

Key issues…
- Has to be long term
- It took us time to design
- Business Relationship will continue long after the project is over
therefore the start has to be right
- Cultures of the different partners are different
wangu.mutua@viagroforestry.org

FLIF
The National Forestry Strategy
in Rwanda
An enabling environment for private
investments in commercial forestry
and FLR
Kigali, 16-17 May 2017
Republic of Rwanda
MINIRENA - RWFA

State
27%
District
2%Private
individual
68%
Private
institutional
3%
Forest land ownership in % - NFI 2015

1. Main policy targets for private investments in SFM and FLR
Sustainable Forest
Management
Planning
- Forest Cover  30 % in 2020
- FLR:  2 M ha in 2020
- DFMPs under implementation: 6 to 30 in 2020
- Productivity of newly established forest: 9 to 14-16 m3/ha/year
- Public forest contracted to privates: 7% to 80 % in 2020
- Small holder private forests managed by Association/Cooperatives
under SFMP: 0% to 35% in 2020
- % of river / lakeshore and roadside plantation managed under PFM
modalities trough local farmer’s assembly/vigilance committee: 3% to
55% in 2020.
- PFM application in public forests contracted to private operators: 10 to
100% in 2020
- Tree density in average in Crops-Agroforestry area: 25 => 50 trees/ha
in 2020
- Incomes of HH practicing agroforestry: 10 % incraeses in 2020
Private Sector
Investments
Participatory
management &
Benefit sharing
Agroforestry

One DFMP per District
Provide specific management rules, action plan and District targets
for:
 Public forests  long term concession to Private Operator
 Small Holder Private forests  conversion of old forest into productive
forest
 Agroforestry dissemination support Farmer Field Schools (FFS)
 Road/River/lake side plantation participatory forest management – PFM
 Shrubland-Savannah restoration & protection or conversion
2. District Forest Management Plan – DFMP
as a key tool for FLR & SFM program implementation

3. Management approach for public forests:
• State Forest = 27% of the total production (non protected) forest area
• Largely dominated by Eucalyptus and Pinus
• Yet stocked especially in Western and Southern Province (120
m3/ha) => the 2 only Provinces that can support timber production
• OPPORTUNITY: to be contracted to private operators (long term
concession)

State or
District
Long term
concession contract
- Full responsible for overall management
- According to agreed Simplified Forest Management Plan (SFMP)
- Has to organize Participatory Forest Management with local
communities
PFO
Professional
Forest
Operator
DFMPs are grouping public forests into FMUs (Forest Management Units) of around 200 ha
=> each public FMU should be contracted to private operator

Management approach for public forests (ctn): Opportunities
• Already around 6,000 ha contracted (NFC, Tea Companies)
• Already 23 DFMPs developed
=> around 35,000 ha to be contracted in 2017-2018
=> more than 20,000 ha to be contracted in 2018-2020
• 5 DFMPs in process of development

Management approach for public forests (ctn)
• Incentives for long term concession ongoing process of
establishment of adapted taxation system for concession:
– For FMU still well stocked and without heavy investments (best profitability context), annual fees/tax
to be paid by concessioner to St according harvested volumes
– For FMU not so well stocked and/or with heavy investment (less profitability context), tax reduction
should be applied (at least the 5-10 first years)
• Incentives for operators investing in development of added value clean
wood industry products (saw timber, woody pellets, etc..)  ongoing
process of establishment of tax reduction system

more than 60% of total forest plantation area
Very Low productivity (at least 2 times less than potential)
=> Should be the PRIORITY 1: Urgency of intensive reconversion
and application of sustainable management practices
4. Management approach for smallholder private forests:

Private Plantations
Forest products
Market/Dealers
Support FOA
Forest Owners Association
(or cooperative)
of 10 to 50 ha each
Objective:
- established Private FMU
- to ensure conversion into productive
and well managed forest under
Simplified Forest Management Plan
(SFMP)
Private forest owners
Management approach for smallholder private forests (cnt):
=> Grouping into private Forest Owner Association (FOA)

Management approach for smallholder private forests (ctn): challenges management
• Owners use to work individually  programs foreseeing to
support:
– intensive sensitization and Organizational capacity building
– pilot champion FOA for scaling up
• Low investment capacity of smallholders  programs will
support first forest conversion
• High pressure on land for crops and settlement  support and
control of FOA in respect of SFMP, ensuring best Productivity
and attractive incomes

- Total demand of woody biomass = around 5.5 M tons/year
(92 % for cooking energy)
- While Total sustainable supply = around 2.5 M tons/year
- => gap supply/demand = more than 55%
- => incraese of over-exploitation:
- first in private forests,
- secondly in public forest
- => decraese of stock and forest productivity  risk for sustainability
5. Wood energy challenges

IMMEDIATE action to mitigate risks  REDUCE DEMAND of Woody
Biomass:
- To the maximum Rwanda’s capacity of 3,5-4 M tons/year (long term objective)
- Through 2 mains actions (in collaboration with MININFRA):
- In urban area :
- after transition period, total forbidding of traditional charcoal
- shifting to LPG, woody pellets and improved “green” charcoal
 new business opportunities
- In rural area:
- full penetration of high efficient wood Improved Cooking stove (such as wood
gasifier)
- dissemination of biogas and other source of energy (LPG, etc..)
 business opportunities
Wood energy opportunities:

Our forests, our future
Republic of Rwanda
MINIRENA - RWFA

Session 1: Business Opportunities and Challenges in Agroforestry and Forestry: What can business do for Forest and Landscape Restoration?

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Session 1: Business Opportunities and Challenges in Agroforestry and Forestry: What can business do for Forest and Landscape Restoration?