Project PongamiaA reforestation project in Paraguay that combines financial returns with CO₂ compensation, biofuel production and local employment.
The Pongamia tree in a nutshell
We plant Pongamia trees in an area that has been deforested for over a decade. Each tree absorbs 44 kg of CO₂ per year while also producing nuts. Every year, these nuts are harvested and sold to be processed into biofuel and protein-rich animal feed. The proceeds from the sale of these products then flow back to our investors.
Investment process in 6 steps
We do not cut down trees. Rather, your return comes from the harvest yield of the trees. This return averages 7.8% per year over the 20-year term. The process is simple:
Investing is possible starting from 1 tree per month for an amount of €20,- per tree. Every quarter we bundle all orders and place them as a single planting order with our reforestation partner in Paraguay. For every tree you purchase, you receive a bond. We verify your identity and register the bonds in your name. All your bonds will appear in your personal investment dashboard with a unique serial number. Your bond entitles you to 20 years of harvest revenue. The year of purchase counts as the first year.
New Pongamia trees are propagated at the nursery from mother trees selected for their characteristics, such as root growth and drought resistance. Women exclusively do the cuttings. Their fine motor skills prevent damage to the young tree. The cuttings are rooted within a few days and are placed in a box and sprinkled with mist every 10 seconds. The moisture and heat provide ideal growing conditions. As a result, they grow like a weed!
One and a half months after taking the cuttings, the trees are transferred to larger pots so the roots grow faster. Then they are placed outside under sunscreen to get used to the local climate. After 9 months, the trees are ready to be planted. After that, the trees are strong enough to take care of themselves and are not taken care of anymore. Of course, they are closely monitored, and assisted when necessary. The water management takes place according to a Dutch ‘polder’ system with ditches and locks.
4. First harvest
After 3 to 4 years, the trees are ready for the first harvest. Harvesting is done by hand without touching the blossoms. From these blossoms, new nuts will emerge the following year. The harvested nuts are then weighed and sold according to the agreed price in the purchase contract. Your return is paid into your bank account within 30 days after harvest and sale. After-sale, the oil is pressed from the nuts, refined, and sold as biofuel. The pulp that remains is rich in protein and is sold as cattle feed.
Seven years after cutting, the trees reach their 'production maturity'. From that moment on, they will produce a stable amount of nuts every year and continue to offset CO2 actively. Years 7 to 20 are, therefore, the most lucrative years of your investment. During these years, you will achieve an average return of 9.7%. This compensates for the first years in which no or fewer nuts are harvested.
After 20 years, your bond matures. We will then have repaid your investment and paid out your return in the form of interest. We know it's impossible to look 20 year ahead. The chance exists that you will want to sell your bonds before that time and we’re happy to help you with that. Your bonds can be traded on the Corekees platform on the basis of so-called ‘limited tradability’. Once you have found a buyer, we will transfer the bond and serial numbers to the new owner and update the bond register immediately.
Let’s look into the financial side of the investment. We can talk about this for hours, but we'll try to keep it short and sweet. Wish to dive deeper? Download our Pongamia Investment Deck to read it all in detail.
Investment expenditure per tree
Each tree is a bond with a (nominal) value of €20. With the purchase of a tree bond , you lend Corekees money to buy, plant and maintain Pongamia trees. The €20- per tree is spent on the following:
Your investment per tree.
Annual yield per tree
You receive the proceeds of the nuts from your trees in the form of returns. This consists of repayment of your loan and interest on the borrowed amount. The return calculation is based on 2 main factors: the volume of the nuts on the trees and the price per kilogram of nuts. Before we pay out your return, several costs have to be paid. After deducting these costs, an average return of 7.8% per year, per tree remains. The distribution of costs and profit per mature tree of 7 years or older is as follows:
Expected annual harvesting profits from the pods of a mature tree.
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Quadruple Impact of the pongamia tree
While our Pongamia tree offers economic value to our investors, its value for the world is even bigger. We lease the land on which the trees are planted from the local population. At the end of the lease period, the ownership of the trees goes to them to contribute to their pension. The tree farm in Paraguay also creates jobs for the local population. There are several other aspects in which Pongamia beats its competition, as seen below. Read more about it in our Pongamia Investment Deck.
One Pongamia tree offsets on average 44 kilograms of CO2 per year and will not be cut down.
The oil the trees produce is refined into biological fuel: a sustainable alternative for fossil fuel.
The seed cake that’s left after extracting the oil is high in protein and is used as a sustainable animal feed by the local cattle farmers.
Reforestation of the Chaco
Reforestation is our single greatest weapon in the fight against climate change. Vegetation provides storage of Co₂ which reduces the amount of Co₂ released into the atmosphere and reduces global warming. Plants and trees cool the soil, so less water evaporates from the ground and more water remains available for plants, animals and people. In addition, greening stimulates the water cycle, which means more frequent rainfall and more water is retained in the soil. By utilizing nature based solutions such as reforestation, we can achieve up to 37% of the Co₂ reduction needed.
The Paraguayan Chaco is the second largest natural reserve in the world, dwarfed only by the size of the Amazon jungle. Our Pongamia project contributes to the reforestation of this fragile and important area by planting trees on marginal land which is not suitable for growing food. As of 2021, We can already see the positive effects of our efforts. For example, the World Wildlife Foundation has installed cameras in our trees because rare panthers have been spotted at our reforestation site.