Description

OpenForests is a German forest consulting company and an expert network. It promotes sustainable forest investment and provides an online projects database with a wide range of project types, a marketplace for an investee-investor matching and supporting forest management tools to improve transparency.

How does OpenForests online platform work? The forest project manager submits an investment proposal. After OpenForests’ desktop screening and basic verification the project goes online at the marketplace. The investor compares investment projects according to standardized basic indicators and builds up an investment portfolio. OpenForests organizes web-presentations to market proposals. In many cases, proposals’ data are not complete, very basic and need improvements that might be done by voluntary or verified ratings (e.g. FairForest Rating) or by drone based remote sensing analysis. After successful matching, both sides might use the range of online applications for planning, analysis, and reporting during project implementation.

Services provided by OpenForests online platform:

  • Standardized templates for developing an investment proposal;
  • Basic data screening and verification of the proposal;
  • Voluntary ratings for improvement of the proposal;
  • Project portfolio: investor can compare and select projects;
  • Matching: web-presentations, fairs and other promotion events to match an investee with the investor;
  • Due diligence (verified ratings): forest stocking, productivity assessment, market & financial analysis, etc.;
  • Smooth project management, controlling and reporting (internally and towards the investor).

OpenForests’ is a self-financed platform. Unlike most crowdfunding asset platforms, OpenForests does not charge commission percentage on investment total but a monthly subscription fee for the investee per project and a portfolio subscription fee for the investor. A choice of information levels for the final decision might decrease due diligence costs for investors especially for the middle-level investment projects. The investee subscription includes costs for basic data verification and promotion. It helps to promote the project actively and track investors’ feedback for further project improvement. The subscription also confirms seriousness and strong commitment of the investee. Minimum subscription period for the investment project is 8 months.

The investor pre-screens selected projects using a variety of filters and compares projects based on free basic indicators. Full information about selected projects requires to run the voluntary ratings by OpenForests. The investor can choose a minimum portfolio of 2 projects for full projects information. If the voluntary ratings are promising but specific information is needed, the investor can run the verified ratings (forest inventory, drone mapping). In case of successful deal the investee and investor might opt for online forest management tools to plan, control and report on the project. The prices are on request.

With over 8 years of hands on project development experience in South East Asia and Central America, OpenForests is working since 5 years successfully on different tools to support sustainable forestry. At this stage OpenForests has developed:

 

Objectives and beneficiaries

The platform and supporting services help to drive finance support through:
-structured and simplified access of investors to the project database;
-improvement in marketability of investment proposals;
-matching the investment project with the relevant investor;
-provision of efficient forest management & control tools.

From investee side, the main beneficiaries are forest community associations, cooperatives, companies, forest state organizations, NGO. From the other, forest investors (private, institutional).

Strong points of the practice

1. Wide choice of projects: agro- and plantation forestry, conservation, natural forest management, restoration/rehabilitation, affo-/reforestation and carbon forestry.
2. Full-service: screening, data verification, promotion, matching with investor, technical expertise.
3. Forest management tools: an online geo-enabled database for integrated spatial analysis and mapping; online applications for planning and analysis, monitoring and reporting, drone based project mapping.

Expected results and benefits for climate change adaptation and mitigation

The expected results of OpenForests platform are to:

1. Facilitate small or medium forest enterprise access to local as well as international finance.
2. Make investment projects more transparent, manageable and attractive to investors.
3. Build more trust and positive relationship between investor and investee from developing country with high investment risks.
4. Accumulate knowledge and experience of the worldwide projects in one place, sharing and applying the best practice further on.
5. Provide know how in combining project database, marketplace and forest management tools.

Replicability potential of the practice

The idea is universal and replicable everywhere in the world.






[Editor's Note: All information published as submitted by the author(s). Minor edits may have been made to increase readability and understanding.]