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

WASHINGTON, D.C. – 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.”

OPIC is the U.S. Government’s development finance institution.  It mobilizes private capital to help solve critical development challenges and in doing so, advances U.S. foreign policy.  Because OPIC works with the U.S. private sector, it helps U.S. businesses gain footholds in emerging markets catalyzing revenues, jobs and growth opportunities both at home and abroad.  OPIC achieves its mission by providing investors with financing, guarantees, political risk insurance, and support for private equity investment funds.

Established as an agency of the U.S. Government in 1971, OPIC operates on a self-sustaining basis at no net cost to American taxpayers. OPIC services are available for new and expanding business enterprises in more than 150 countries worldwide. To date, OPIC has supported more than $200 billion of investment in over 4,000 projects, generated an estimated $75 billion in U.S. exports and supported more than 276,000 American jobs.