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Clean Technologies and Local Rural Development “It’s the Organization…” Presented at Experts Group Workshop on Technology Transfer, CTI, UNFCCC Patrick.

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Presentation on theme: "Clean Technologies and Local Rural Development “It’s the Organization…” Presented at Experts Group Workshop on Technology Transfer, CTI, UNFCCC Patrick."— Presentation transcript:

1 Clean Technologies and Local Rural Development “It’s the Organization…” Presented at Experts Group Workshop on Technology Transfer, CTI, UNFCCC Patrick D’Addario Fiorello H. LaGuardia Foundation Bangkok, Thailand June 28, 2007

2 DIRECTOR-GENERAL UNITED NATIONS RELIEF AND REHABILITATION AGENCY (UNRRA), 1946

3 THE FIORELLO H. LAGUARDIA FOUNDATION, FOUNDED 2001 The Foundation focuses on three major areas: US-Italian investment in community-based sustainable development projects in developing countries US-Italian investment in community-based sustainable development projects in developing countries US investment in southern Italy in areas of sustainable agriculture, biotechnology, and renewable energy US investment in southern Italy in areas of sustainable agriculture, biotechnology, and renewable energy Academic exchange between Italy and the US with an emphasis on biotechnology, agriculture, and medicine Academic exchange between Italy and the US with an emphasis on biotechnology, agriculture, and medicine

4 Instituto Eco-Engenho Maceio, Brazil Global Environmental Institute Beijing, China Environment, Energy, & Enterprise Ventures New Delhi, India Mountain Institute’s Peak Enterprise Program (TMI), China Small-Scale Infrastructure Development Fund (S 3 IDF), India MOSAICO Network MOSAICO Network Fiorello H. LaGuardia Foundation, NY, USA Energy & Security Group, Washington, DC, USA

5 MOSAICO Overview ► What is MOSAICO? Mobilizing sustainable agriculture, infrastructure and capital, MOSAICO is a network of organizations in developing countries seeking to increase incomes, reduce poverty, & protect the environment in rural communities. MOSAICO operates in Brazil, India, China. ► Our Mission: MOSAICO links poor rural farmers/enterprises to national and international markets by providing financial, institutional, & technical support usually only afforded to larger deals/players. MOSAICO does this by mobilizing resources– human, financial, institutional– in support of local sustainable agriculture and infrastructure projects. ► Our Vision: Prosperous communities with minimum negative environmental impacts.

6 MOSAICO Approach ► What Do We Do? MOSAICO works with cooperatives, associations, self help groups, and private ventures to provide institutional/technical support, business planning, and training services to develop sustainable agriculture and infrastructure ventures. MOSAICO also works with local financial institutions (FIs) to evaluate risks/benefits, design appropriate products/services, and bring ventures to scale. In markets where required, MOSAICO supports the development of local financing facilities to provide seed capital and financial guarantees for small agriculture ventures and energy, water, and sanitation infrastructures. In parallel, MOSAICO uses its local project preparation capabilities and market knowledge to support the development of investment vehicles targeting larger-scale sustainable infrastructure projects and enterprises.

7 Identify Partners/Project Opportunities MOSAICO: Building Markets from the Ground Up Conduct Pilot Projects Support Organizationall Development Complete Commercial & Financial Chains Replication Document Best Practices/ Procedures

8 Local Banks and Financial Institutions Basket 1A Renewable Energy & Organic Agriculture Enterprises Tech Asst & Business Incubation Professional & Technical Training Financial Risk Mitigation MOSAICO Partners Replication through partner-developed marketing and technical assistance businesses, cooperatives, producers associations, and other multipler groups SUSITLABANPRETNEEESIRS Basket 2 Fund Facilitation Basket 1B Small Renewable Energy and Energy Efficiency Infrastructures

9 PROJECTS

10 BRAZIL ► In Brazil, MOSAICO has brought a dignified life within the reach of subsistence farmers in drought-plagued Alagoas, in Northern Brazil. ► The project has demonstrated that with the proper organization, training, equipment, and financing, poor farmers can increase their incomes by 500%, even with limited access to water. Bottling the peppers for sale

11 BRAZIL ► Also in Alagoas, the Team is conducting business planning for AMercSol, a distribution/marketing company representing small farmers in the region. ► AMercSol will assume responsibility for identifying interested farmers, organizing them into ventures, & providing technical/commercial training to cultivate high-value products. ► Access to financing for agricultural inputs and irrigation systems, and for marketing their products is another key component. ► A lead product for AMercSol is the hydroponic production of pepper in vinegar –a high demand, fashionable condiment in Maceio. ► Using locally developed structures, recycled PVC soft drink bottles, and otherwise toxic rice husks, the hydroponic systems have brought vitality to the community & attracted local finance. Hydroponic Harvest

12 SMALL HYDRO FUND - 1 ► LGF supported the development of a ground- breaking 200 million reals (ca. US $100 M) equity fund for development of small hydropower projects. ► Registered with CVM, the Brazilian Securities and Exchange Commission, the Fund is unique as it is the first Brazilian RE Fund of its size, and 80% of its capital is subscribed by Brazilian pension funds. ► Fund developers also secured an added 700 million reais in debt financing from BNDES, the national development bank. The Fund’s first 13 projects, in the states of Mato Grosso (MT) and Minas Gerais (MG), total nearly 200 MW. ► Construction has begun on 5 MT plants, totaling 93MW to be on-line in 2008. As run-of-river plants, they will have minimal environmental impact. ► Under this project, LGF supported an independent legal review of the PPAs & fund share purchase agreements. ► Finally, LGF is assisting Globobank to identify investors from OECD countries interested in investing an additional 25 million reais (ca. US $12 M) in the fund. ► The projected return is inflation + 13%.

13 Small Hydro Fund (2) ― SHP* Telegráfica 30 MW ― SHP Rondon 13 MW ― SHP Parecis 15,4 MW ― SHP Cidezal 17 MW ― SHP Sapezal 16 MW ― TOTAL 91,4 MW * SHP Small Hydropower Plant Location: Rio Juruena – MT Power Purchase Agreement (PPA 20 anos): ELETROBRÁS/PROINFA (Brasilian Government) EPC Contracted, including Insurance to reduce hydrologic and geologic risks. The project fits the BNDES (Brazilian Development Bank) funding criteria. Estimated Investment: R$ 485 million PA AM RORO MS GOGO TO Telegráfica Rondon Parecis Sapezal Cidezal 68 kms.

14 BIO OILS - BACKGROUND I BIO OILS - BACKGROUND I ► Castor Bean Oil is a raw material in the production of over 400 products, including paints, varnishes, plastics, and lubricants. ► The castor bean plant, grows in arid conditions. Its cultivation is minimally mechanized and does not require pesticides, fertilizers or irrigation to be viable. ► The castor bean can be cultivated along side traditional food crops.

15 BIO OILS - BACKGROUND II ► In biodiesel program, centralized processing and purchasing have resulted in prices that are often not cost - covering. ► Delays in program start up created excess supply, further depressing prices. ► Small producers bear burden of delivery ► Loss of by-products: fertilizer, animal feed ► Assisting a subsistence farmer to produce a commodity is not doing him/her a favor.

16 BIO OILS – THE ASSOCIATION ► Landless farmers were sold land by the state of Ceara ► The state agricultural extension service, EMATER-CE worked with the farmers on cultivation of castor bean plant ► With National Environmental Fund and Avina Foundation, LGF established APRAI FARMERS VOTING TO ESTABLISH APRAI

17 Bio Oils – The financial analysis ► LGF performed financial analysis with purchasing beans from farmers at double what they receive from biofuels program The project has a 20% IRR ASJA, an Italian green generator is supporting Completion of business plan, will invest 30-40% Of capital for plant. responding to anticipated restrictions on non- sustainable sources of biofuels

18 BIO Oils – Government Help ► Does the government help? 1. Financing land purchase – Ceara 2. Donating land for the processing facility – Itatira 3. Donating Storage Building – Ceara 4. Debt financing – Banco do Nordeste 5. Technical Assistance – EMATER - CE

19 BIO Oils - Conclusion ► Sustainable livelihoods for farmers ► Creation of local jobs in processing ► Diversified output: local, nat’l, int’l mkts. ► At a minimum, a global-warming offset as a carbon sink ► Potential further CO 2 offset as fuel for transportation, stationary motors, cooking, and potentially, biogas.


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