Lake tana finance initiative

Lake Tana Financing Initiative

LAKE TANA FINANCE INITIATIVE

The Lake Tana Finance Initiative seeks to restore and maintain the integrity of one of the world’s premier water towers, the Lake Tana watershed, source of the Blue Nile, Ethiopia. The Initiative proposes to catalyze the financing of community based efforts that convert CO2 into things people need (water, food, feed, fiber, fuel, fertilizer, and biodiversity), cool the planet, reduce humanity’s Ecological Footprint, and enhance economic, environmental and human security within the region and beyond.

The Initiative is designed to create sustainable livelihoods for local communities and families in Ethiopia’s Amhara region, improve trans‐boundary water management and security, and address global climate change by sequestering 25 million tons of CO2 from the atmosphere each year. An integrated approach will focus on whole systems thinking, innovative financing mechanisms, and the planting of a billion trees that last. The Initiative’s implementation and financing plan promotes a fundamental shift in sustainable development thinking and climate change strategy that creates multiple benefit streams for local communities, donors, and investors and accelerates the cementing of local, regional and international partnerships in order to achieve the scale necessary to preserve the life supporting functions of Lake Tana’s water tower for the millions of people that depend on it.

The founding and supporting partners assisted by an international advisory panel of experts have key skill sets, track records, and access to guide the successful implementation of this exciting new paradigm in sustainable development. The longer term vision is to inspire the launching of water tower programs in other regions of the world as part of a franchised business concept promoting knowledge sharing, learning, and reaching scale.

© 2008‐09 Planet2025 Network

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April 12, 2009 Concept Note Version 0 – Discussion Draft P a g e | 1 Numbers are estimates subject to change and further verification


THE CHALLENGE: MAINTAINING LIFE SUPPORTING ECOSYSTEMS

The source of the Blue Nile is Ethiopia’s Lake Tana, the country’s largest fresh water body fed by four perennial rivers and numerous seasonal streams. Known as Tis Isat – “Smoke of Fire” – the Blue Nile Falls is the spectacular point where Lake Tana overflows and drops 150 feet over the edge of lava rocks and starts winding its way down to Sudan to accelerate the White Nile at Kartoum, where the two rivers become the Nile river, which in turn makes its way to the Egypt’s Nile River delta, where it eventually flows into the Mediterranean Sea. The Lake Tana region with its 37 islands and many Ethiopian Orthodox Church monasteries and church forests also represents a cultural heritage of national, regional and global significance with many tourism attractions.

Changes in Lake Tana and its watershed have important national and international implications because the livelihoods of millions of people in Ethiopia, Sudan and Egypt depend directly or indirectly on the continuous flow of Lake Tana’s valuable water resources and the resiliency of the ecosystem services the watershed provides. By 2025, the number of people dependent on the watershed’s health is expected to have grown by some 80%.

The Lake Tana watershed already suffers from a decrease in water levels due to rapid population growth, unsustainable agricultural and development practices, and deforestation of the surrounding mountainsides. This has resulted in soil and water erosion, sedimentation, and degraded water quality and has serious consequences for economic, environmental, and human security within the region and beyond. Current levels of investment to maintain the flow of the Lake Tana watershed are estimated at $ 10‐20 million, which is a small fraction of what is deemed necessary to support its life sustaining functions.

THE OPPORTUNITY: CARBON, COMMUNITY, COOPERATION

Afforestation/reforestation and integrated agroforestry projects typically remove and sequester CO2 from the atmosphere at a rate of 50‐80 pounds per tree per year respectively1. Importantly, they also bring communities valuable economic and social benefits. The world’s most degraded lands can often be saved by converting carbon into things people need: food, forage, bio‐fuels, clothing, shelter, medicines, and organic fertilizer. By doing so, carbon is returned to the soil.

• The major CO2 emitting economies and their industries are under increasing pressure to comply with internationally evolving agreements for a post‐Kyoto era that seek to reduce GHGs in order to avoid the worst consequences of climate change. Cooperation on the financing and implementation of multiple tree and forest garden projects on a large scale is an efficient, cost effective, win‐win approach for people, organizations and countries to regenerate the planet and convert CO2 into things people need.

• The investment capital required to replace for example one billion trees lost to deforestation following the approach described herein can be estimated at $ 150 million and will sequester approximately 25 million tons of carbon dioxide per year. The price of carbon credits in the voluntary markets averaged $ 3.15 ‐ $ 6.10 per tCO2e on the OCT and CCX in recent years. Prices of certified carbon credits on the ECX have been averaging $ 20 per tCO2e. A one‐time investment of 150 million in one billion trees thus yields a return of $ 70 million or more every year, resulting in a payback period of 2 years or even less.

• If one takes into consideration the total benefits streams resulting from integrated afforestation/reforestation, agroforestry, and water resource management operations, the estimated cost benefit ratios (CBR) of these projects can exceed 18 and annual net cash flows of more than $ 10 for

1 A conservative estimate for trees growing in the tropics is 50 lbs per tree per year; forest gardens are more efficient in their photosynthesis and can remove an average of 70‐80 lbs per tree per year according to experts.



every dollar invested2 ,3. This ranks such projects as one of the global community’s premier investment opportunities promoting a life‐sustaining civilization.

Humankind is only replanting a fraction of the 14 billion trees it loses every year to deforestation even though sustainability of life on earth is highly dependent on CO2 absorption capacity of forests and soil. The main reasons for this huge market failure are that: (i) investment costs are (perceived to be) substantially higher, (ii) the market value of carbon is highly uncertain due to regulatory uncertainties about the post Kyoto world, (iii) limited entrepreneurial capacity has been tapped appropriately to enable the planting of trees on a large scale, (iv) investors and financial institutions are not very familiar with packaging small scale reforestation projects, despite their benefits, (v) accounting and verification of tree planting results is still in the early stages, already leading to unsubstantiated claims by some, and (vi) capacity building and training interventions need to connect the dots and accelerate learning processes and knowledge sharing using available technologies.

AN INTEGRATED APPROACH

The core mission of the Initiative will reinforce a paradigm shift in sustainable development and climate change strategy that encourages people, organizations and nations around the world to cooperate on meeting the needs of the present generation without compromising the ability of future generations to meet their own needs – and to do so as living systems in alignment with nature so all life will flourish.

The Initiative seeks to engage local communities in the Amhara region as equal partners in development based on holistic project designs integrating:

WHOLE SYSTEMS THINKING

• Community participation and ownership as driver of sustainable change

• Afforestation/reforestation activities on the mountainsides

• Integrated agroforestry activities at the base of mountainsides

• Integrated water resource management in Lake Tana watershed

• Integration of sustainable biofuels in natural fencing of church forests

• Accelerated change by scaling up/building on success stories and proven approaches of partners

• Connection of local actions to global challenge of climate change mitigation and adaptation

• Engaging youth in schools – leveraging “the power of one” to change the world

INNOVATIVE FINANCING MECHANISMS

• Payments for upstream ecosystem services by downstream beneficiaries

• Multiple co‐financiers: development agencies, investors, foundations, individual donors

• Matched funding concepts leveraging public sector, private sector and individual financing sources

• Web 2.0 approaches to linking funding sources with high quality projects

• Field and space‐based monitoring of CO2 sequestered in biomass

• Monetization of CO2sequestered in biomass via voluntary carbon markets

2 Value of ecosystems services: water, food, fodder, fuel wood, CO2 absorption, bio‐fuels, and others estimated at $ 2910 per ha per year for 25 years representing the assumed lifespan of a tree (typically 20‐50 years). 3 Includes: cost of initial investment $ 266 per ha (15 cents per tree), plus annual estimated monitoring costs of $ 150 per year per ha for 25 years (excluding labor costs, assumed as sweat equity which may be estimated at $ 2.00 per day or $ 730 per year).



A BILLION TREES THAT LAST

• A five year goal to plant a total of 1 billion trees on 500,000 hectares at an average cost of $ 0.15 per tree and expected to yield 25 million tCO2e per annum valued at a price of $ 1.00 to 10.00 per tCO2e.

• Resiliency and dignity of people living in harmony with and supported by healthy ecosystems and services yielding an estimated $ 2‐3,000 of income or income equivalents per hectare.

ALL IT TAKES IS A SEED……

[insert representative pictures here of key activities + link to video clip]

Seeds Nurseries

Transplanting

Types and density

Survival Irrigation

Mountainsides upper

Before After

Mountainsides lower

Before After

Accounting

Field monitoring Remote sensing



IMPLEMENTATION PLAN

PHASE I – CONSULTATIONS & PLANNING (Q2 + Q3, 2009)

A series of donor sponsored stakeholder consultations organized by the Coordinating Partners will convene local communities, regional, national, and international experts and engage them in the development of detailed plans and proposals to underpin foundation for financing and implementation of the Initiative.

PHASE II – FUNDRAISING (Q4, 2009 + ONGOING)

A fundraising campaign will be launched and directed at multiple co‐financiers, including but not limited to development agencies, (corporate) investors, foundations, and individual donors. Attempts will be made to present the Lake Tana Finance Initiative as path breaking program during the COP of the UNFCCC in Copenhagen.

PHASE II: PROGRAM IMPLEMENTATION (START Q1, 2010)

The targeted start date for what is expected to be a phased implementation of the Initiative is January 2010. Overview of goals and objectives (for discussion):

Phase A Phase B 2010 2011 2012 2013 2014 Total

Families/communities Number of hectares Number of trees Program cost @ $ 0.15 per tree Carbon Credits (tCO2e) Market value per tCO2e Additonal benefits streams

FINANCING

The Lake Tana Financing Initiative will provide interesting emerging opportunities for donors, investors, and sponsors to secure carbon credits at a significant discount over what the future price per tCO2e will be in 2012 and beyond. Importantly, the Initiative promotes the creation and maintenance of sustainable livelihoods of participating communities which are not exclusively based on the sale of carbon credits, but on a portfolio of benefits streams bundling economic, environmental, and social benefits.

Participation will also offer an opportunity to balance the Ecological Footprint of an individual, organization or nation’s lifestyle through the purchase of Offsets4Life™. Individual donors, as well as socially responsible businesses and investment funds, industry sectors in need of carbon offsets, governments, foundations, and international development players are considered potential sponsors, donors and investors. Public‐private synergies will be leveraged whenever possible through matched funding constructions rewarding action by individuals and organizations.

The total estimated budget to achieve the five year plan is $ 150 million. The aggregate projected return on investment generated by benefits streams from the projects is [insert].




FOUNDING PARTNERS

Planet2025 (www.planet2025.net) is a non‐profit social venture testing innovative concepts to mobilize new sources of sustained financing for long term‐investment in the globe's life‐supporting ecosystems, including its centerpiece activity, Planet2025 Communities, which focuses on integrated agroforestry and systems thinking to assist communities in developing countries to convert CO2 into things people need in cooperation with others.

Greener Ethiopia (www.greenerethiopia.org) has successfully engaged in the establishment and management of nurseries, the planting of fast growing multipurpose trees, the regeneration of local ecosystems, the creation of sustainable livelihoods in cooperation with local communities in the Guraghe zone, and a five year 100 million tree planting program in cooperation with Ethiopian Airlines, Planet2025, and other partners. Greener Ethiopia planted close to 7 million trees in 2008 and expects to plant over 10 million trees in 2009.

ORDA (www.ordainternational.org) is the leading organization in forest resource, water resource, and integrated agricultural development among non‐governmental organizations in Amhara and has the overriding mission to empower the Amhara Region food and livelihood insecure households and communities to maximize their development potentials and benefits by developing their capacity and self‐esteem. ORDA planted 50 million trees and opened ?? water points in 2008; a thirty percent growth rate is expected in 2009.

ADVISORY PANEL OF EXPERTS*

Dr. Mersie Ejigu | Dr. Hans Herren | Dave Deppner | Barbara Bramble | Jeff McNeely | Dr, Alemayehu | [recommendations for additional experts?]

*to be invited

SUPPORTING PARTNERS*

Institute for Environmental Security | Roundtable for Sustainable Biofuels | Millennium Institute | American Council of Renewable Energy (ACORE) | Foundation for Environmental Security and Sustainability | Trees for the Future | Global Footprint Network | TransGlobal Ventures | Ethiopian Airlines | Biovision | HoA‐REC/N | IUCN | [recommendations for additional organizations?]

*to be invited

CONTACT INFO

Steven Lovink Founder and CEO

Planet2025 Network 1403 30th Street NW Washington DC 20007 USA

T +1 202 333 8878 F +1 202 333 8879 E [email protected]

Bedru Sultan Vice Chairman

Greener Ethiopia 4326 Marjoram Court Alexandria, Va 22310 USA

T +1 202 553 8027 T +251 912 012717 E [email protected]

Wuletaw Hailemariam Executive Director

Organization for Rehabilitation and Development in Amhara Bahi Dar Ethiopia

T +251 58 2200985 F +251 58 2200987 E orda‐[email protected]

http://www.planet2025.net/

http://www.greenerethiopia.org/

http://www.ordainternational.org/

mailto:[email protected]



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Lake tana finance initiative