jennifer morris

Biodiversity

and Ecosystem

Investments

November 11th, 2009

• CI Overview

• Ecosystem Finance

• Verde Ventures

• Carbon Fund

• New Horizons

Summary

CI has field offices in over 40 countries spanning four continents.

Our staff of over 1000 employees is supported by a network of over 1,500 local partners

around the globe.

about CI

visionWe imagine a healthy prosperous world in which societies are forever committed to caring for and valuing nature for the long-term benefit of people and all life

on Earth.

missionBuilding upon a strong foundation of

science, partnership and field demonstration, CI empowers societies to responsibly and sustainably care for nature for the well-being of humanity.

Ecosystem

Finance Division (EFD)

Our Funds

Critical Ecosystem Partnership Fund (CEPF)

Global Conservation Fund (GCF)

Conservation Stewards Program (CSP)

Verde Ventures

Conservation and Community Carbon Fund (CCCF)

Our Focus

Protected Areas

Rural Livelihoods

Long-term Financing

Financial management

PES Financing

Summary Results Total granted/invested to date:

USD$211 million

1,500 partners supportedin over 60 countries

>89 million hectares of globally significant land protected benefitting critical ecosystems and communities

> $254 M in funding leveraged

> 140,000 people directly impacted

Significant policy impacts in 11 countries

EFD InvestorsTotal Capital: $338M (Grants (G), Loans (L), Loan

Guarantees (LG))

Multilateral/Bilateral- World Bank (G)- International Finance Corporation (L&G)- Global Environment Facility (G)- Overseas Private Investment Facility (L)- Government of Japan (G)- French Aid Development Agency (L,G&LG)

Foundations- Gordon and Betty Moore Foundation (G)- MacArthur Foundation (G)- Mulago Foundation (G)- United Nations Foundation (G&LG)- Conservation International (G-CEPF)

Private Sector- Starbucks (LG, L & G) - Daiwa (G)- Disney (G)- Dell (G)

Investors’ Interest

Historical• Philanthropic• Marketing Benefit• Focus on non-CI partners • Investment Infrastructure • High Leverage (Debt Swap) Increasingly• Supply Chain Benefit• SRI/TBL (with $ return)• Carbon Credits

Verde Ventures (VV)

Verde Ventures

Verde Ventures invests in small businesses that contribute to conservation and

communities in Conservation International's global priority areas.

Why Verde Ventures?

Conservation-based employment is essential to provide economic incentives for conservation

The small business sector is a key partner in the intersection between human welfare and conservation

Lack of available, affordable capital to ensure the sustainability of the sector

Core Products

• Loans: US$30,000 to $500,000 (average: $125,000)

• Use of Loan funds: Infrastructure, working capital, trade finance

• Typical Deal Structure: Senior or subordinated secured debt for 3-5 years. Increasingly debt + quasi-equity.

• Financial IRR fund target: 8%

• Strategic grants for technical assistance and environmental and socio-economic monitoring

Current Investors

International Finance Corporation

Overseas Private Investment Corporation

Starbucks Coffee Company

French Aid Development Agency

VV Summary Results

$13.4 million in 73 loans,13 countries

> 400,000 hectares directly impacted

42,000 people employed and/or benefiting

$32 million in new sales generated by invested companies

95% repayment rate

Supply Chain--Coffee

• $10.5 million invested in 23 sustainable coffee suppliers in 5 countries

• 100% trade finance secured on contracts

• Help Starbucks achieve

public commitments through financing support to their supply chain and other coffee growers.

VV Risk Management

•Thorough due diligence and oversight

•Use of CI local networks in 40 countries

•Invest with other lenders (also reduces costs)

•Invest only in US$ and work with companies receiving

hard currency revenues

•Repayment terms of not more than 6 years

•At least 1:1 collateral secured under local law

•Loan Loss Reserve Requirement averaging 15% of

outstanding capital

Conservation and Community Carbon Fund

(CCCF)

25 Current high biodiversity forest-carbon projects producing estimated > 100 million tCO2 over 30 years.

Project development and community capacity are needed to scale-up 5-10X over the next 5 years

Projects in implementation

Projects in development

CCCF Overview

The CCCF supports the design, start-up and

implementation of forest-based carbon projects that counteract global warming and deliver biodiversity and local community benefits.

CCCF Core Products

Carbon project development funding

Technical assistance for project development (carbon baseline, PDDs)

Voluntary carbon credit agreements

Support to indigenous peoples and forest dependent communities to increase their access to carbon markets.

Progress

6 REDD projects funded or in pipeline (Madagascar, Ecuador, Brazil, Guatemala, Peru, DRC)

October 2009: Signed significant REDD deal with Disney for $7 million in pre-financing CI project in Peru, DRC and third country tbd.

Benefits: Disney gets excellent marketing benefit

and eventual retirement of 900,000 tons CI gets much needed carbon project

financing for 3 projects.

Challenges Pre-financing may create low-

pricing scenario for project principals.

Without flexible pooled funding, project risk is higher as funds are raised for specific projects.

Real market growth in REDD dependent on policy arena.

Significant up-front capital needed for PDD development and capacity building.

Loan/equity financing structures for REDD would help to ensure sufficient financing for building the REDD asset class.

Expanding Opportunities

• Expand forest-carbon financing 10x

• Replicate PES-market models- with a focus on freshwater

• VV expansion with initial $10 million in new capital- focus on Africa

• Support monetization of biodiversity assets for local and global benefit.

Thank You!

Jennifer Morris

j.morris@conservation.org