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Frequently Asked Questions

Frequently asked questions about Bosques Pico Bonito, S. de R.L.

What are the principal operating activities of the business?

Operating activity will not only focus on the proper acquisition of land areas for the project and the subsequent planting and early-stage management of the fledgling forest and agro-forestry crops, but also the incorporation of a significant number of local indigenous peoples and communities as part of overall project activities. Once land areas have been acquired and initial plantings have been established, ongoing management will commence leading to initial harvesting of agro-forestry crops and tree thinnings, and thereafter, regular cycles of major tree harvests. Harvested trees will be milled and sold for both local consumption and export, based on current market demand and pricing. In addition, the company will monitor the carbon dioxide being sequestered by its trees.

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What are the mutual advantages of community participation in the business?

Operating activity will not only focus on the proper acquisition of land areas for the project and the subsequent planting and early-stage management of the fledgling forest and agro-forestry crops, but also the incorporation of a significant number of local indigenous peoples and communities as part of overall project activities. This will result in benefit from these peoples’ local knowledge and experience in the region, while providing the necessary incentives for these groups to embrace and advocate for the business, thus lowering the risks of operating failure due to local community disinterest or negative perceptions: specifically illegal logging and protection from fire and pests. Community members will benefit from jobs, education, increased incomes, and the ability to start their own forestry businesses.

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What are the markets for Bosques Pico Bonito products?

The first market is by purchasers of certified precious tropical hardwoods who produce finished products and/or product components for established markets. Examples are fine furniture, musical instruments, and floors. Recently, the worldwide market has seen a decline in production and a rise in import demand resulting in a rise in prices. According to the International Tropical Timber Organization (ITTO), total timber imports are projected to quadruple in forest-scarce developing countries such as India and China. As an example, Chinese imports rose 250% or 31% per year from 1997 to 2005.

Second, the newly formed market for Emission Reduction Purchase Agreements, also known as carbon credits is based on the recent ratification of the United Nations’ Kyoto Protocol whereby participating nations are obligated to reduce greenhouse gas emissions via both upgraded clean emissions technology, as well as through the purchase of certified carbon offsets (CERs). The company also plans to sell voluntary verified emission reduction credits (VERs). As reported by the Chicago Climate Exchange, a recent World Bank study reports that the dollar volume of carbon transactions has already surpassed $100 million. Furthermore, The Economist magazine projects an annual volume of trading in carbon credits from $60 billion to $1 trillion.

Third is the market for local consumption of pre-harvest thinnings of the forest (poles, fences, and charcoal) as well as agro-forestry products such as coffee, corn, strawberries, vanilla and allspice. Local demand is strong for these products with the resulting revenue utilized to offset ongoing operating costs in the early years of the project.

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What has the successful launch of the Bosques Pico Bonito demonstrated?

This successful launch has significantly reduced the operating risks and new planting technology, as management has now acquired actual operating experience in the field, as well as legal and negotiating experience regarding proper acquisition and registration of land title for the benefit of the venture.

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What does U.N. Kyoto Protocol CDM Board certification approval mean in terms of world competition in the carbon offset credit markets?

The company has already completed the extremely rigorous scientific and political process of gaining Clean Development Mechanism (CDM) approval for its forestry carbon sequestration methodology, which will lead to having many of its sequestered carbon credits (CERs) to be certified by the CDM for trade – one of only 6 such projects in the world to achieve this objective.

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What areas of management and project team leadership/experience went into the development and operations of Bosques Pico Bonito, S. de R.L.?

The company has assembled management and project team leadership which encompasses decades of successful experience in all relevant areas of the project including: Forestry Management, Clean Development Mechanism (CDM) compliance, Carbon Markets, Forest Stewardship Counsel (FSC) compliance, World Bank compliance, Operations and Finance, Start-Up Business Management, International Business, Investment Management/Investor Relations, Corporate Oversight, Non-Profit and NGO Management, Local Community relations, and Legal and Tax expertise.

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Which relationships has the company secured, that are essential to its success?

The company maintains numerous business relationships with governmental and multilateral organizations including: the World Bank, various Honduran government ministries, local government agencies and NGO’s, and various financing and grant-making organizations such as the World Bank, Citigroup, and Overseas Private Investment Corporation.

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What prior project development financing did the company secure?

The company has already secured initial financing of over $2.1 million from a variety of financiers and institutions including the government of Japan and Citigroup Foundation. In addition, a definitive agreement with the World Bank BioCarbon Fund has been established for the purchase of carbon credits produced by the project.

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How will investors participate in the BPB business?

Investor participation will be via a special purpose U.S. based entity. The investor will hold a preferred class of shares that will offer preferred rights, oversight, and financial terms vis-a-vis all other shareholders. Other major shareholders will include FUPNAPIB, EcoLogic Development Fund, as well as possibly employees, and local community groups.

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How is the Company financed and what is the ownership structure?

The Company has developed a unique business model which enables both founding partners, who are non-profit organizations, to share in ownership in combination with financial investors. In addition, portions of ownership have also been established for local community groups based in close proximity to project activity areas, as well as workers of the Company.

Financial investors are composed of a unique mix of professionally managed assets, foundations utilizing project-related and mission-related investment mechanisms (PRI’s and MRI’s), and sophisticated individual investors. Beyond typical preferred return on investment requirements, our investor groups have the benefit of achieving triple bottom line results related to positive environmental and social impacts together with economic and financial benefits. For more information on investing click here.

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How can I learn more about Bosques Pico Bonito?

You can contact us at infoREMOVETHISBEFORESENDING@bosquespicobonito.com

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