The investment arrangement struck with Canopy Capital could see Iwokrama financially independent in another two years, its board chairman said yesterday.
The agreement between Iwokrama and Canopy Capital was made public on March 27 at the world’s first Biodiversity and Finance Conference in New York. It opens the way for financial markets to price the ‘utility value’ of the Iwokrama rainforests.
The forest and its services and eco-system would be put to dollar value after a process of assessment and valuation. Canopy Capital is injecting funding into the preservation and sustainable utilisation of Iwokrama’s forests in exchange for a share of the rights to eco-system services it provides.
According to its website, Canopy Capital was established in 2007 to drive capital to the rainforest canopy. It said that 20 per cent of the company is held by the Global Canopy Programme, a UK charity dedicated to the research and preservation of tropical forests. The remaining 80 per cent is funded by a dozen international investors, including the Waterloo Foundation.
“First of all I want to make it clear that the agreement with Canopy Capital is not about carbon trading. That is not what Iwokrama wants to do. What the agreement is about is measuring and then seeking to place a value in the market place on the ecosystem services of Iwokrama to humanity,” Edward Glover, Chairman of the Iwokrama Board of Trustees, said.
Glover said such services include rainfall and biodiversity. He said the agreement will be creating additional income for Iwokrama to help make the organisation financially independent of donors by 2010 and this will be in accordance with Iwokrama’s business plan. He said the injection will help meet research obligations and continue to help the local communities all of whom depend on the resources of the Iwokrama forest for their livelihoods.
Glover said this was consistent with Iwokrama’s role as a test bed, having been established to test that conservation and economic activity could be harmonious without destroying the environment.
He said Iwokrama would continue to do its very important research and to measure and place a value on the services provided.
“This is a very important aspect. Humanity depends on rainfall and biodiversity. This is just the kind of research opportunity that Iwokrama will pursue in collaboration with other agencies in Guyana and beyond,” Glover said.
But he said that it will take time to advance the agreement. The process of measuring was the first step, he added, and “we welcome the help of Canopy Capital to enable Iwokrama to take this important work forward over the weeks and months ahead.”
Iwokrama on
solid ground
Glover said Iwokrama’s operational costs have fallen significantly as a result of ruthless cost-cutting after facing reduction on donor funding. The organisation’s operational budget is between US$1.2M and US$1.4M per annum.
He said business revenues have increased from 23 per cent in 2005 to 80 per cent in 2007 and further growth was forecast this year. Glover was hesitant to disclose the amount of resources expected from the Canopy Capital deal, but said it should steer the organisation out of financial dependency by 2010.
After the 2001 terrorist attacks in the US, and the death and destruction of the South East Asia Tsunami in 2004 and other natural disasters, funding that once propped up organisations that focused on the environment was diverted. When this happened, Iwokrama, which had encountered hard times even before 2001, saw further reductions in funding and has been struggling in the midst of instituting radical cost-cutting measures.
Glover said ever since he took over as Chairman of the Iwokrama Board of Trustees he made it clear that as a research institution “we are ready to work with other agencies in Guyana to advance the knowledge of sustainable management of the forests. We will continue to work with all concerned in the months ahead in light of the agreement.”
He said Iwokrama would be happy to work with organisations of any description beyond Guyana in the months and years ahead. “We want to show what is possible with Iwokrama,” he said.
The Iwokrama project arose out of an offer in 1989 by then President Desmond Hoyte at the Commonwealth Heads of Government Meeting in Kuala Lumpur, Malaysia to have a million acres of virgin forests in the centre of Guyana set aside for sustainable forestry studies.
The Chairman said implementation of the agreement between Iwokrama and Canopy Capital and the preparation of the measuring phase of the work was underway, but these preparations would take some time, since they would be detailed measurements and analyses. “We are keen to get a move on, but as we make progress we will have [more to report],” he said.
He said the agreement would not interfere in any way with the other areas of Iwokrama’s business, namely sustainable forestry, eco-tourism, forest management training and services.
Speaking to this newspaper yesterday, Minister of Agriculture Robert Persaud welcomed the initiative and said it had the support of government. “We recognise that Guyana and even Iwokrama [need expertise] to market these resources,” Persaud said. He said government expects that the deal will give Guyana an opportunity to ratchet up international support in seeking out eventual carbon trading opportunities.
“We see this is as a catalyst [in our thrust against climate change],” he said. He said government would have lent support to the initial negotiations through its seat on the Board of Governors of Iwokrama. The minister said that there continues to be ongoing discussions between Government of Guyana and a number of parties internationally, as a follow up to the recent Bali summit and President Bharrat Jagdeo’s offer to the world of Guyana’s rainforests.
