INVESTMENT
Investment Timber is a volume business and the biggest disadvantage for the communities is lack of scale and lack of investment.
Even though community forests are an increasingly important source of timber individual smallholders do not realise their full potential. Nb has a very streamlined model for investment and any community that can meet 3 simple criteria will be considered.
During the “proof of concept” phase over 3 years Nb focused on one site in Sumbedang, West Java. In 2020 the goal is to raise US$ 250,000 to replicate the model in 3 more sites across Java and by 2025 to have 30 sites across Indonesia which would result in NB investing US$ 3 million in primary production over the next 4 years.
Future plans for Nb also include investing in downstream processing to produce Finger Joint Laminated beams and flooring.
Community
The 3 simple criteria that Nb will consider investing US$ 70,000 in a community are:
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Capacity of 500m3 logs /month
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Existing community organisation
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Physical infrastructure & access to market
With these in place NB will consider installing:
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US$ 20,000 sawmilling facility
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US$ 20,000 primary processing
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US$ 20,000 purchase of standing trees
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US$ 10,000 management and training
Where applicable invest in FSC/PEFC certification and nurseries for seedling production
Institutional
Nb has developed an investment model to attract the next 2 phases of investment.
2020-1 US$ 250,000 to replicate from 1 site to 4 sites in Java
2021-2025 US$ 3 - 5 million
Replicate in 30 sites across Indonesia and initiate downstream processing for direct export.
Nb is getting support from the IIX Equity@Scale programme to ensure we are “Investment Ready” https://iixglobal.com
Private
Nb is designing a model to allow individuals or groups to invest directly into communities.
The basic idea is to raise US$ 70,000 for 1 community
This is divided into 14 lots of $5,000. A group of people may raise this together or as individuals. Those 14 investors are then put in contact with one another and the community their investment is supporting.
Every tree in the plantation will sequestrate around 25kg carbon per year, this is nearly 900 tons of carbon in each community.
The scheme allows direct engagement between investor and community, clear demonstration of impact and a simple means of carbon offset.