Dubai: Want to do the right thing by Amazon – not the ecommerce giant but the forest in South America? And invest in its future?
Investors have an opportunity to do that under a recently launched funding program that will play its part in turning back the tide of deforestation that has wracked the Amazon.
Leading the charge is O.N.E. Amazon, founded by Rodrigo Veloso and with ex-Blackrock chief investment officer Peter Knez as its chairman.
What O.N.E. Amazon – which launched at the recent COP28 in Dubai - does is tap the funds, issue a ‘digital asset security’ with a perceived value of one hectare within the 750 million hectare Amazon rainforest. This is backed by a 30-year preservation agreement on that land parcel.
Only 750 million of these digital securities will be issued, which, of course, corresponds to the land in the Amazon.
In an interview, Knez states the case for why funds from investors are just as needed by Amazon as anything governments and NGOs can offer.
Shouldn’t saving the Amazon be something left for governments to chip in?
This vast green expanse is our most significant natural asset, a colossal reservoir of biodiversity and a critical regulator of the global climate.
Here lies our challenge: the current economic paradigm. In this model, the Amazon is seen as more valuable for its timber or cleared land than for its ecological wealth. This is not just unsustainable; it's a path towards ecological bankruptcy.
At O.N.E. Amazon, we are harnessing the power of the market – the same force that has driven exploitation – to transform it into a tool for conservation. We aim to prove that the Amazon is more valuable alive than dead.
We're not just environmentalists; we're innovators, economists, technologists, and community leaders. Together, we're developing a digital security asset – that represents the intrinsic value of the world’s largest rainforest’s biome.
This isn't just a financial instrument; it's a statement, a commitment to the belief that the Amazon is valuable and ought to be priced.
The proceeds from the purchase of the O.N.E. Amazon Digital Asset Security will go into the O.N.E. Amazon Impact Fund (O.A.I.F), which will create jobs for Amazonian communities and accelerate the energy transition of the countries through which the Amazon rainforest extends.
Where do you think the corporate or high net worth investor interest exists in the O.N.E Amazon fund?
In terms of financial returns, investors will benefit from the potential capital appreciation of the digital security as the market values the positive environmental and social benefits of the rainforest’s biome.
Given the finite size of the Amazon rainforest, the total number of securities will be restricted to 750 million, corresponding to the hectarage of the rainforest. This creates a limited supply of digital securities. Investors will also benefit from the dividend income from the O.A.I.F.
Are there tangible returns associated with the fund?
The O.A.I.F will invest in energy transition and circular economy projects, including infrastructure and clean energy generation projects, in addition to more localized community land preservation projects in the Amazon. The fund will initially focus on the funding of projects in Colombia including:
- Onshore and offshore wind farms with 198MW and 825MWcapacity in Guajira.
- The Cienaga Energy Transition Industrial Park and Port, a 2,000-hectare development that will include an offshore wind park.
- Biomass to bio-crude refineries across Colombia.
- Protection and conservation projects at Serrania De Chiribiquete Natural National Park, the Guamuez Valley, Corota Island Flora and Fauna Sanctuary and Gorgona Natural National Park
Won’t investors, - the corporate ones in particular - treat it as ‘just’ a corporate sustainability move?
We expect a diverse range of investors and partners, which includes not only corporates but also NGOs and responsible world citizens around the world. In fact, one of our key partners from the GCC region is Emirates Nature - WWF.
Each O.N.E. Amazon Digital Asset Security will be initially issued at a value of $100, which we believe is accessible to investors of all sizes and will enable us to successfully, democratise our preservation efforts by involving a broad base of investors from across the world.
How much of a buy-in does this have with the Brazil government (or any other government) that holds the Amazon?
By enabling the Amazon to be properly valued and transferring the burden of funding its preservation from local governments to a diversified global investor base, we have received strong interest from national governments across the Amazonian basin.
Currently, we have a firm relationship with the Colombian government which is supportive of the project with the O.A.I.F initially investing in projects in the country.
Will the fund have to deal with legions of landowners? What is the risk of this slowing things down?
The diversity of the Amazon with various groups and owning different parcels of land has indeed contributed to the complexity of the project.
We have established strong partnerships with local governments and organisations on the ground to support this endeavour. Our approach has yielded impressive results with long-term land preservation agreements for 50 million hectares of rainforest, an area larger than Spain, already secured.