In recent years, as the social, economic and environmental benefits of our forests have become more widely understood, governments across the world have begun to mobilise in an effort to protect their own.

The process can sometimes be costly and so funds, bonds and private investment opportunities are often touted as the means to a greener future.

A recent example of this came at the end of last year when the International Finance Corporation (IFC) issued an innovative bond to support a project in the Kasigau Corridor of east Kenya.

This project is one of the largest to have ever been approved under the UN’s REDD+ programme – an initiative to reduce deforestation, among other things.

The new project will enable thousands of rural farmers to benefit from a voluntary agreement to protect an important migration corridor for endangered elephants.

The five-year bond was originally sized between $75 million and $150 million but was increased to $152 million in response to strong demand.

A special feature of the bond is investor’s choice to either have the coupon paid in cash, carbon credits, or a combination of the two. By receiving carbon credits you can offset some of your carbon footprint or sell them in the voluntary offset market.

However, “If investors choose cash, then BHP takes the credits, thereby ensuring that the project gets an assured minimum revenue every year for the next five years,” explained Vikram Widge, head of IFC climate finance and policy.

Currently, deforestation and forest degradation account for around 20 per cent of global greenhouse gas emissions. It’s estimated that this initiative will help to sequester 11.8 million tonnes of carbon dioxide over its lifetime.

In addition, the sale of the REDD+ credits will provide revenues for wildlife conservation, jobs for women and other benefits for local communities.

This latest project is being hailed as a viable model for others to replicate similar investments in the fight against deforestation.

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