The Global Exchange for Social Investment
Jatropha Pro-Poor Investments
Problems and Solutions
IFAD Consultation on Jatropha
Rome, April 10th, 2008
Dr. Andreas Renner
Director Development
Investments
GEXSI
renner@gexsi.org
The Global Exchange for Social Investment
Our background: Enhancing pro-poor investments
GEXSI assists social entrepreneurs and social purpose businesses
in developing countries to move „from aid to market“ by
MARKET
Commercial Investments
Degree of self-reliance
 Providing technical
expertise in business
planning and investment
structuring
 Locating financing that
meets the needs of the
enterprise in accordance
with its business
development stage –
arranging for below-market
or full-fledged commercial
investments
 Facilitating networking,
mentorship and
exchanges of information
and expertise
GEXSI
focus
Civil Voluntary
Organizations and
Micro-Entrepreneurs
often depend on grant
funding
AID
Grant Funding
Social businesses
with solid business
model and track
record are valid for
commercial
investments
€500k-2m
Hybrid social
organizations
require investments
at below-market
conditions
€50k-500k
€10-50k
TIME
The Global Exchange for Social Investment
Jatropha Learning Network
Since 2005, GEXSI has started to build up a jatropha learning
platform which will be further refined in 2008:
 Coaching and Mentoring of local
jatropha entrepreneurs in Asia,
Africa, and Latin America
 Pro-poor investing: Project
Development and Implementation of
a 300 ha jatropha pilot plantation in
Madagascar, designed as a social
venture
 Research: Facilitation of Exchange
of Know-How between Projects
 Sustainability: GEXSI is a founding
Member of the Multi-Stakeholder
Dialogue on Sustainable Jatropha
Netherlands
Germany
India
Guatemala
Gh
an Camer
a
Peru
oon
Brazil
Nam
ibia
Network + Field Research & Pilots
Learning Network
R&D Partners
Laos
Tanzania
Madagascar
Mozambique
Philippines
Indonesia
The Global Exchange for Social Investment
Global Market Study on Jatropha
GEXSI has been contracted by WWF to undertake a
stock-taking on the development of jatropha projects –
worldwide.
As of today, we have
 Identified and processed
data of 288 jatropha
projects
 Interviewed more than
170 experts in 54
countries
We have prepared
 40 country profiles and
 6 case studies
We currently evaluate the
data and finalize the report.
Preliminary Results
The Global Exchange for Social Investment
Jatropha has been discovered as a future
energy crop and will be farmed at large scale
strong commercial activities
(> 5000 ha)
low or no commercial activities
(< 100 ha, not increasing)
starting commercial activities
(100-5000 ha, increasing)
not researched
Preliminary Results
The Global Exchange for Social Investment
Asia takes the lead in terms of acreage.
Scale of cultivation:
2008: 26,866 ha
2015: 1,640,250 ha
*Expert Country Estimates
Number of projects
identified: 41
Total size of projects
identified:
20,906 ha
Scale of cultivation:
2008: 938,999 ha
2015: 9,072,093 ha
*Expert Country Estimates
Scale of cultivation:
2008: 71,215 ha
2015: 1,067,028 ha
Number of projects
identified: 91
*Expert Country Estimates
Number of projects
identified: 96
Total size of projects
identified:
89,537ha
Total size of projects
identified:
1,645,583 ha
Preliminary Results
The Global Exchange for Social Investment
Jatropha cultivation is supported by a growing
number of governments
Governmental support for Jatropha
cultivation and investments:
exists – through other means
strong - through legislation
or other means
not reported
currently drafted or discussed
Jatropha is banned
The Global Exchange for Social Investment
Assessment
 Currently, the financial sector invests
billions of USD in Jatropha projects
worldwide
 This development takes place with or
without governments or international
organizations taking an active role.
 The key question is whether the
cultivation models which are chosen, will
benefit the rural poor
What organizational and cultivation schemes prevail?
Preliminary Results
The Global Exchange for Social Investment
Will Jatropha be grown in a sustainable manner?
Sustainability Issues: Food, Rainforest
 Food versus Fuel – conflict is not seen as major issue for jatropha
 Rainforest: Conflicts mainly seen in South-East Asia
Project Data
Expert Interviews
17%
65%
34%
24%
8%
Cultivation affects
primary forest
Cultivation affects
food production
Cultivation mainly
on marginal land
Primary Forest
1 not at all
1 not at all
1 not at all
Secondary Forest
2
2
2
Agriculture (food)
3
3
3
Agriculture (non-food)
4
4
4
None / Wasteland
5 very much
5 very much
5 very much
Percentage of projects which referred to type of use
Global aggregated data of interviews
Preliminary Results
The Global Exchange for Social Investment
Smallholder outgrowers play an important role
 Inclusion of smallholder farmers takes place in
most regions and independent from project type
and size
 Only very few pure outgrower schemes in Latin
America
Africa
Asia
36%
Plantation
Outgrower
Combination
Latin America
22%
2%
44%
34%
28%
52%
39%
Project Data (aggregated)
51%
The Global Exchange for Social Investment
Critical issue: Smallholders may lose out
Expert Interviews indicate that there may be a shift
towards pure plantation models due to failure of
outgrower schemes.
Problems



Opportunity costs: What are incentives to
participate if there are no harvests in the first 23 years?
Loyalty: How to ensure that the participating
farmers actually sell to the organization which
set up the scheme?
Agronomy: Difficulty to provide efficient pest
control etc.
There exist numerous different organizational / institutional
approaches; need for further test trials and showcases!
Preliminary Results
The Global Exchange for Social Investment
Case Study India – high percentage of smallholders
Expert estimates:
 In 5 year‘s time, 38% of the
total acreage of jatropha
cultivation in India will be
small-scale production of
<5ha,
 compared to only 25% Asia
overall
Strong governmental support
 Buy-pack policy at guaranteed
prices
 Grant support schemes
Regional Distribution
Most suitable areas
Uttaranchal
2008 – 350 ha
2012 – 200,000 ha
Guarantee Price – 0.14 US$
Selected projects
Haryana
2008 – 328 ha
2012 – 20,000 ha
Rajasthan
2008 - 33,000 ha
2012 - 220,000 ha
Available Waste Land - 5,6m ha
Guarantee Price - 0.11 US$
Tamil Nadu
2008 – 20,277 ha
2012 – 100,000
Available Waste Land – 1,8m ha
Guarantee Price - 0.12 US$
Down-side: Need for continued grant support
Chhattisgar
2008 - 84,000 ha
2012 – 1,000,000 ha
Available Waste Land: 1m ha
Guarantee Price– 0.13 US$
Andhra Pradesh
2008 - 15,715 ha
2012 - 1,500,000 ha
Available Waste Land - 4,4m ha
Guarantee Price - 0.14 US$
Preliminary Results
The Global Exchange for Social Investment
Only market based solutions work in the long run
Work with the market player in order to enhance the inclusion of smallholders.
Public Private Partnerships as a promising path.
Worldwide
India
64%
38%
31%
17%
19%
Indicative Figures (double aggregation)
31%
Private
Public
PPPs
Preliminary Results
Integration of smallholder farmers:
Elements of a strategy

Work with (social) businesses who
have a long-term interest in further
developing the outgrower scheme;
allow for growth over time.

Provide Coaching and Mentoring of
Farmers (via „techniciens“ etc.)

Involve Microfinance Institutions as
partners whereever appropriate

Advanced purchase agreements:
Reliability more important than price

Integrate scheme in agronomic
calendar of outgrowers
The Global Exchange for Social Investment
The Global Exchange for Social Investment
What could IFAD do in order to enhance
pro-poor jatropha developments?
1
Promote Field Research: Provide financing to monitor
promising approaches of existing projects; make benchmark
on outgrower models which work
2
Provide below-market rate of return financing to early stage
social jatropha businesses („from aid to market“ approach)
3
Liaise „good projects“ (which meet IFADs standards) with
existing development finance schemes and/or provide first-loss
guarantees for funds investing in jatropha businesses
Make those projects flourish that have an entrepreneurial spirit, a
social vision and a strong management team.
The Global Exchange for Social Investment
JATROPHA PLATFORM

We are in the process of
further expanding our
jatropha related services

Find our global jatropha
study at our new web-site
(from 1 May 2008 onwards)

Contact us for further
questions:
Andreas Renner
renner@gexsi.org
www.jatropha-platform.org