Terraformation Workshop at NOAH 2023.pptx

Terraformation Workshop at NOAH 2023.pptx

@yeeguy

8 Followers

3 weeks ago 206

Climate & Environment #forests #NBS #carbonremovals #terraformation

Terraformation Workshop at NOAH 2023.pptx

@yeeguy3 weeks ago

Carbon Forestry as a
Securitizable Asset Class
Yee Lee yee@terraformation.com @yeeguy
NOAH 2023

1/62

THIS IS NOT AN
INVESTMENT
SOLICITATION

2/62

Hi, my name is
Yee Lee

3/62

25 years working on fintech and ecommerce
Last 4 years working on global carbon forestry

4/62

We launched 29 native, biodiverse restoration projects across
14 countries, with potential to 20x…

5/62

Forest
Restoration
Econ 101

6/62

terraformation.com
Carbon Sequestration
7
Depends on plant species. Refer to latest botanical an…

7/62

terraformation.com
Carbon Credits Issuance
8
Illustrated for 5000 hectare project. First issuanc…

8/62

terraformation.com
~80% Monetizable Carbon Sequestration
9
Carbon Credits (tons/year)

9/62

terraformation.com
Wide range
$1000/ha – “just plant” (e.g., mangrove)
$4000/ha – fully loaded l…

10/62

terraformation.com
Carbon Market
11
Conservative 6% CAGR → $86/ton in 2050… but won’t be a smoot…

11/62

terraformation.com 12
x
Monetizable
Carbon Credits
Issuance
Carbon Price

12/62

terraformation.com
Forest Creator Revenue
13
Monetizable Sequestration x Carbon Price = Annual R…

13/62

terraformation.com
Operating Margin
14
5000 hectare project
$3000-$4000 dev cost per ha (conser…

14/62

Forestry
Investments
Require
Creativity

15/62

terraformation.com
Forest Creator Revenue
16
Monetizable Sequestration x Carbon Price = Annual R…

16/62

terraformation.com 17
Early-stage funding gap prevents many forest
restoration projects from get…

17/62

terraformation.com 18
Early-stage funding gap prevents many forest
restoration projects from get…

18/62

terraformation.com 19
Early-stage funding gap prevents many forest
restoration projects from get…

19/62

terraformation.com 20
Theoretically: Forest Creators could handle debt
financing – IF they had s…

20/62

terraformation.com 21
Theoretically: Forest Creators could handle debt
financing – IF they had s…

21/62

terraformation.com 22
Sufficient area-under-curve to do some creative financing

22/62

Portfolio
Economics

23/62

terraformation.com 24

24/62

terraformation.com 25
Portfolio Originator’s Revenue
x 15
out of 25 originated projects

25/62

terraformation.com 26
Example: Unlevered Portfolio J-Curve
Project financing revenues
(interest,…

26/62

terraformation.com 27
Perpetual Forestry Machine!
Ending Cash more than enough
to self-fund ano…

27/62

Key Result #1
~$500M starts a perpetual
forestry machine, running
one (1) portfolio at a time

28/62

29/62

terraformation.com 30
Observation:
Portfolio produces steady cashflows after Year 5 or 6…
Annuit…

30/62

31/62

terraformation.com 32
Portfolio Originator J-Curve

32/62

terraformation.com 33
Securitization: structure annuity cashflows into a
sellable security, sell…

33/62

terraformation.com 34
Now let’s run that playbook, but
starting with $750M initial capitalizatio…

34/62

terraformation.com 35
Running two (2) portfolios…
Re-capture enough capital to run the
playbook…

35/62

terraformation.com 36
Perpetual Forestry Machine II
Portfolio 1 launch
Portfolio 2 launch
Portf…

36/62

terraformation.com 37
Layered portfolios produce larger and larger net cash.
Can keep re-investin…

37/62

terraformation.com 38
With slight tweaks to portfolio efficiency and
incremental revenue from hi…

38/62

terraformation.com 39
38
Portfolios
started
950
Forest restoration
projects
4.8M
Hectares…

39/62

Key Result #2
~$750M starts a perpetual
forestry machine, running an
exponentially increasing
…

40/62

41/62

terraformation.com 42
Securitization Risks
Risk Mitigation
Non-operation 5-6 years seasoning
No…

42/62

terraformation.com 43
Question:
What would you call a financial entity that
raises a large init…

43/62

terraformation.com 44
Observations on Banks
● Over 25,000 banks in the world
● The 100th largest…

44/62

terraformation.com 45
Bonus Question:
If even a handful of these new forestry-banks get
started…

45/62

Sensitivity &
Risks

46/62

terraformation.com
Risk assessment through Monte Carlo simulation
100,000+ simulated portfolios
…

47/62

terraformation.com 48
Project Success and Failure Simulation Method
Project success rate modeled …

48/62

terraformation.com 49
Carbon Market Simulation
+3 std dev
-3 std dev
Mean case
Modeled at por…

49/62

terraformation.com 50
Forestry Project Simulation
+3 std dev
-3 std dev
Mean case
+3 std dev
…

50/62

terraformation.com
At least 40% of underlying projects need to survive in
order to assure minima…

51/62

terraformation.com
Catalytic Loan Features boost financial performance
52
Issuing 7% catalytic l…

52/62

terraformation.com
Optimal Portfolio Size = 25
53
Larger portfolios reduce volatility of financi…

53/62

terraformation.com 54
Portfolio Simulation
+2.5 std dev
-2.5 std dev
Mean case
Tens of thousa…

54/62

Case Study
Simulated
Portfolios

55/62

terraformation.com
10,000 simulated portfolios and securitizations are available for inspection at…

56/62

terraformation.com 57

57/62

terraformation.com 58

58/62

terraformation.com 59

59/62

terraformation.com 60

60/62

terraformation.com 61

61/62

Thank You.
“With your help, we can restore our native forests in
THIS generation.”
—Yishan Wong…

62/62

@yeeguy

Drag Me

Comments 1 Info

- @jonatjaunt
- 3w
New slides!

Terraformation Workshop at NOAH 2023.pptx

@yeeguy

Explore the potential of carbon forestry as a securitizable asset class. Learn how native forest restoration projects can generate significant carbon credits and revenue streams. With innovative funding strategies and portfolio management, this presentation outlines a sustainable model for impactful investments in biodiversity and climate change mitigation.

Climate & Environment

#forests #NBS #carbonremovals #terraformation

This website uses cookies to improve your experience. By using this site, you consent to the use of cookies.