NATIONAL FOREST AND CLIMATE CHANGE STRATEGY
PROMOTING PRIVATE INVESTMENT FOR GREEN GROWTH IN PERU
Víctor Galarreta
SALIENT FEATURES OF THE PERUVIAN AGRICULTURAL SECTOR
Climate Change and Agriculture
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%)
Megadiverse Peru = Risky
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?
Promote the development of climate-smart territories
How can we make this happen ?
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 PaisajesDesignation of
Origin. Associated with diversity, ABC
and Landscapes
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
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
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
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
IPOs Venture Capital
PrivateEquity
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.)
A TEST OF GREEN PORTFOLIO: OUR "GREEN CHIPS"
COASTAL
EXPORT
AGRICULTUR
E
•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”.
