OPIC/Terra Global REDD Insurance Project in Cambodia Wins Sustainable Forestry Award

The first political risk insurance contract for a Reduced Emissions from Deforestation and Degradation (REDD) project, provided by the Overseas Private Investment Corporation (OPIC) to Terra Global Capital for a project in Cambodia, has been awarded the Sustainable Forestry Transaction of the Year by Environmental Finance magazine.

The award recognizes “excellence in the application of capital markets know-how to addressing the world’s environmental problems.” The magazine’s criteria rewarded deals that were “novel, offered the potential for replication, and facilitated the solution of environmental problems using finance and/or market mechanisms.” Environmental Finance is the leading global publication covering the financial impact of environmental issues on the business community.

The OPIC insurance project, announced in November 2011, will help protect 64,318 hectares of forest in Cambodia and sequester approximately 8.7 million metric tons of CO₂e. OPIC is providing $900,000 in political risk insurance to Terra Global Capital, a U.S-based leading land-use carbon development and investment company that has invested in the project. 

Mark Nicholls, editor of Environmental Finance, said, “So many opportunities to cost-effectively tackle the world’s environmental problems are found in jurisdictions in which investors struggle to operate – and which use novel mechanisms, such as REDD, which carry plenty of risk themselves. So it’s encouraging to see institutions such as OPIC stepping up to the plate with support for investments like the one that Terra has made in its cutting-edge projects in Cambodia.”

OPIC President and CEO Elizabeth Littlefield said, “We are deeply honored that Environmental Finance, a respected voice for the sustainable development of natural resources, has recognized this innovative project. By encouraging public-private cooperation to both protect forests and support the economies that border them, we see great promise in the development of the forest carbon sector, and this project should have applications across many emerging markets. We are equally proud to share this award with Terra Global Capital.”

Leslie Durschinger, Founder and Managing Director of Terra Global Capital, said, “Through our commitment to creating forest and agricultural carbon assets with environmental integrity and our ability to use financial innovation to attract capital and reduce risk we are creating investment opportunities in the sector.”