Clean Technologies and Local Rural DevelopmentClean Technologies and Local Rural Development“It’s the Organization…”“It’s the Organization…”

Presented at Experts Group Workshop onPresented at Experts Group Workshop onTechnology Transfer, CTI, UNFCCCTechnology Transfer, CTI, UNFCCC

Patrick D’AddarioPatrick D’AddarioFiorello H. LaGuardia FoundationFiorello H. LaGuardia Foundation

Bangkok, ThailandBangkok, ThailandJune 28, 2007June 28, 2007

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

COPYRIGHT: LAGUARDIA & WAGNER ARCHIVES

THE FIORELLO H. LAGUARDIA FOUNDATION, THE FIORELLO H. LAGUARDIA FOUNDATION, FOUNDED 2001FOUNDED 2001

The Foundation focuses on three major areas:The Foundation focuses on three major areas:

US-Italian investment in community-based sustainable US-Italian investment in community-based sustainable development projects in developing countriesdevelopment projects in developing countries

US investment in southern Italy in areas of sustainable US investment in southern Italy in areas of sustainable agriculture, biotechnology, and renewable energyagriculture, biotechnology, and renewable energy

Academic exchange between Italy and the US with an Academic exchange between Italy and the US with an

emphasis on biotechnology, agriculture, and medicineemphasis on biotechnology, agriculture, and medicine

Instituto Eco-Engenho

Maceio, Brazil

Global Environmental InstituteBeijing, China

Environment, Energy, & Enterprise VenturesNew Delhi, India

Mountain Institute’s PeakEnterprise Program (TMI), China

Small-Scale InfrastructureDevelopment Fund (S3IDF), India

MOSAICO Network MOSAICO Network

Fiorello H. LaGuardia Foundation, NY, USAEnergy & Security Group, Washington, DC, USA

MOSAICO OverviewMOSAICO Overview► What is MOSAICO?What is MOSAICO?

Mobilizing sustainable agriculture, infrastructure and capitalMobilizing sustainable agriculture, infrastructure and capital, MOSAICO , MOSAICO is a network of organizations in developing countries seeking to increase is a network of organizations in developing countries seeking to increase incomes, reduce poverty, & protect the environment in rural incomes, reduce poverty, & protect the environment in rural communities.communities.MOSAICO operates in Brazil, India, China.MOSAICO operates in Brazil, India, China.

► Our Mission:Our Mission:MOSAICO links poor rural farmers/enterprises to national and MOSAICO links poor rural farmers/enterprises to national and international markets by providing financial, institutional, & technical international markets by providing financial, institutional, & technical support usually only afforded to larger deals/players. support usually only afforded to larger deals/players.

MOSAICO does this by mobilizing resources– human, financial, MOSAICO does this by mobilizing resources– human, financial, institutional– in support of local sustainable agriculture and institutional– in support of local sustainable agriculture and infrastructure projects.infrastructure projects.

► Our Vision:Our Vision:Prosperous communities with minimum negative environmental impacts.Prosperous communities with minimum negative environmental impacts.

MOSAICO Approach MOSAICO Approach ► What Do We Do?What Do We Do?

MOSAICO works with cooperatives, associations, self help MOSAICO works with cooperatives, associations, self help groups, and private ventures to provide institutional/technical groups, and private ventures to provide institutional/technical support, business planning, and training services to develop support, business planning, and training services to develop sustainable agriculture and infrastructure ventures. sustainable agriculture and infrastructure ventures.

MOSAICO also works with local financial institutions (FIs) to MOSAICO also works with local financial institutions (FIs) to evaluate risks/benefits, design appropriate products/services, evaluate risks/benefits, design appropriate products/services, and bring ventures to scale. and bring ventures to scale.

In markets where required, MOSAICO supports the development In markets where required, MOSAICO supports the development of local financing facilities to provide seed capital and financial of local financing facilities to provide seed capital and financial guarantees for small agriculture ventures and energy, water, guarantees for small agriculture ventures and energy, water, and sanitation infrastructures. and sanitation infrastructures.

In parallel, MOSAICO uses its local project preparation In parallel, MOSAICO uses its local project preparation capabilities and market knowledge to support the development capabilities and market knowledge to support the development of investment vehicles targeting larger-scale sustainable of investment vehicles targeting larger-scale sustainable infrastructure projects and enterprises. infrastructure projects and enterprises.

Identify Partners/Project

Opportunities

MOSAICO: Building Markets from the Ground Up

Conduct PilotProjects

Support Organizationall

Development

CompleteCommercial &

FinancialChains

ReplicationDocument

Best Practices/Procedures

Local Banksand

FinancialInstitutions

Basket 1A

Renewable Energy& Organic

AgricultureEnterprises

Tech Asst &Business

Incubation

Professional &TechnicalTraining

Financial Risk Mitigation

MOSAICO Partners

Replication through partner-developed marketing and technical assistance businesses, cooperatives, producers associations, and other multipler groups

S U S IT LA BAN PRETNEE ESIR S

Basket 2

Fund Facilitation

Basket 1BSmall Renewable

Energyand EnergyEfficiency

Infrastructures

PROJECTSPROJECTS

BRAZILBRAZIL

► In Brazil, MOSAICO has In Brazil, MOSAICO has brought a dignified life brought a dignified life within the reach of within the reach of subsistence farmers in subsistence farmers in drought-plagued Alagoas, drought-plagued Alagoas, in Northern Brazil. in Northern Brazil.

► The project has The project has demonstrated that with demonstrated that with the proper organization, the proper organization, training, equipment, and training, equipment, and financing, poor farmers financing, poor farmers can increase their incomes can increase their incomes by 500%, even with by 500%, even with limited access to water.limited access to water.

Bottling the peppers for sale

BRAZILBRAZIL► Also in Alagoas, the Team is conducting Also in Alagoas, the Team is conducting

business planning for business planning for AMercSol, AMercSol, a a distribution/marketing company distribution/marketing company representing small farmers in the region.representing small farmers in the region.

► AMercSol will assume responsibility for AMercSol will assume responsibility for identifying interested farmers, organizing identifying interested farmers, organizing them into ventures, & providing them into ventures, & providing technical/commercial training to cultivate technical/commercial training to cultivate high-value products. high-value products.

► Access to financing for agricultural inputs Access to financing for agricultural inputs and irrigation systems, and for marketing and irrigation systems, and for marketing their products is another key component. their products is another key component.

► A lead product for AMercSol is the A lead product for AMercSol is the hydroponic production of pepper in hydroponic production of pepper in vinegar –a high demand, fashionable vinegar –a high demand, fashionable condiment in Maceio. condiment in Maceio.

► Using locally developed structures, Using locally developed structures, recycled PVC soft drink bottles, and recycled PVC soft drink bottles, and otherwise toxic rice husks, the otherwise toxic rice husks, the hydroponic systems have brought vitality hydroponic systems have brought vitality to the community & attracted local to the community & attracted local finance.finance.

Hydroponic Harvest

SMALL HYDRO FUND - 1SMALL HYDRO FUND - 1► LGF supported the development of a ground-LGF supported the development of a ground-

breaking 200 millionbreaking 200 million realsreals (ca. US $100 M)(ca. US $100 M) equity fund equity fund for development of small for development of small hydropower projects. hydropower projects.

► Registered with CVM, the Brazilian Securities Registered with CVM, the Brazilian Securities and Exchange Commission, the Fund is and Exchange Commission, the Fund is unique as it is the first Brazilian RE Fund of unique as it is the first Brazilian RE Fund of its size, and 80% of its capital is subscribed its size, and 80% of its capital is subscribed by Brazilian pension funds.by Brazilian pension funds.

► Fund developers also secured an added 700 Fund developers also secured an added 700 million million reais reais in debt financing from BNDES, in debt financing from BNDES, the national development bank. The Fund’s the national development bank. The Fund’s first 13 projects, in the states of Mato Grosso first 13 projects, in the states of Mato Grosso (MT) and Minas Gerais (MG), total nearly 200 (MT) and Minas Gerais (MG), total nearly 200 MW. MW.

► Construction has begun on 5 MT plants, Construction has begun on 5 MT plants, totaling 93MW to be on-line in 2008. As run-totaling 93MW to be on-line in 2008. As run-of-river plants, they will have minimal of-river plants, they will have minimal environmental impact. environmental impact.

► Under this project, LGF supported an Under this project, LGF supported an independent legal review of the PPAs & fund independent legal review of the PPAs & fund share purchase agreements.share purchase agreements.

► Finally, LGF is assisting Globobank to identify Finally, LGF is assisting Globobank to identify investors from OECD countries interested in investors from OECD countries interested in investing an additional 25 million investing an additional 25 million reais (reais (ca. ca. US $12 M) in the fund. US $12 M) in the fund.

► The projected return is inflation + 13%.The projected return is inflation + 13%.

Small Hydro Fund (2)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 PAAM

RO

MS

GO

TOTelegráfica

Rondon

Parecis

Sapezal

Cidezal

68 kms.

BIO OILS - BACKGROUND IBIO OILS - BACKGROUND I

► Castor Bean Oil is a raw material Castor Bean Oil is a raw material in the production of over 400 in the production of over 400 products, including paints, products, including paints, varnishes, plastics, and varnishes, plastics, and lubricants.lubricants.

► The castor bean plant, grows in The castor bean plant, grows in arid conditions. Its cultivation is arid conditions. Its cultivation is minimally mechanized and does minimally mechanized and does not require pesticides, fertilizers not require pesticides, fertilizers or irrigation to be viable.or irrigation to be viable.

► The castor bean can be cultivated The castor bean can be cultivated along side traditional food crops.along side traditional food crops.

BIO OILS - BACKGROUND IIBIO OILS - BACKGROUND II► In biodiesel program, centralized In biodiesel program, centralized

processing and purchasing have resulted processing and purchasing have resulted in prices that are often not cost - covering. in prices that are often not cost - covering.

►Delays in program start up created excess Delays in program start up created excess supply, further depressing prices.supply, further depressing prices.

►Small producers bear burden of deliverySmall producers bear burden of delivery►Loss of by-products: fertilizer, animal feedLoss of by-products: fertilizer, animal feed►Assisting a subsistence farmer to produce Assisting a subsistence farmer to produce

a commodity is not doing him/her a favor.a commodity is not doing him/her a favor.

BIO OILS – THE ASSOCIATIONBIO OILS – THE ASSOCIATION

► Landless farmers were Landless farmers were sold land by the state sold land by the state of Cearaof Ceara

► The state agricultural The state agricultural extension service, extension service, EMATER-CE worked EMATER-CE worked with the farmers on with the farmers on cultivation of castor cultivation of castor bean plantbean plant

► With National With National Environmental Fund Environmental Fund and Avina Foundation, and Avina Foundation, LGF established APRAI LGF established APRAI

FARMERS VOTING TO ESTABLISH APRAI

Bio Oils – The financial Bio Oils – The financial analysisanalysis

►LGF performed financial analysis with LGF performed financial analysis with purchasing beans from farmers at double purchasing beans from farmers at double what they receive from biofuels programwhat they receive from biofuels programThe project has a 20% IRRThe project has a 20% IRRASJA, an Italian green generator is supporting ASJA, an Italian green generator is supporting Completion of business plan, will invest 30-40%Completion of business plan, will invest 30-40%Of capital for plant.Of capital for plant.

responding to anticipated restrictions on non-responding to anticipated restrictions on non-sustainable sources of biofuelssustainable sources of biofuels

BIO Oils – Government HelpBIO Oils – Government Help► Does the government help?Does the government help?

1.1. Financing land purchase – CearaFinancing land purchase – Ceara2.2. Donating land for the processing Donating land for the processing

facility – Itatirafacility – Itatira3.3. Donating Storage Building – CearaDonating Storage Building – Ceara4.4. Debt financing – Banco do NordesteDebt financing – Banco do Nordeste5.5. Technical Assistance – EMATER - CETechnical Assistance – EMATER - CE

BIO Oils - ConclusionBIO Oils - Conclusion►Sustainable livelihoods for farmers Sustainable livelihoods for farmers ►Creation of local jobs in processingCreation of local jobs in processing►Diversified output: local, nat’l, int’l mkts.Diversified output: local, nat’l, int’l mkts.►At a minimum, a global-warming offset At a minimum, a global-warming offset

as a carbon sinkas a carbon sink► Potential further COPotential further CO22 offset as fuel for offset as fuel for

transportation, stationary motors, transportation, stationary motors, cooking, and potentially, biogas.cooking, and potentially, biogas.