Investments in a new ECO system

The prices for paper raw material from eucalyptus are falling. Last month, woodcutters in Portugal were working day after day to chop down as much eucalyptus as possible to be paid the old price of between 38 and 40 euros per tonne by Portucel/Soporcel. Now the prices are below 30 euros per tonne and there are far too many eucalyptus forests in the country. What will happen to them now? There is a lot of supply, but demand is low. This is good for the paper producer Portucel/Soporcel, but bad for the forest and land owners who are geared toward monoculture and cannot react quickly enough to the saturation of the market with their eucalyptus that accelerates forest fires.

As the world’s population has quadrupled in the last 50 years, and the consumption of resources too, paper consumption has increased twentyfold. This will not be able to continue. The paper industry has had an easy time of it with this continuous growth. The situation is a stark reminder of the growth and decline of the construction and real estate industry, and especially the raw material cement. Now the biggest Portuguese cement producer Cimpor has ascertained that there are more than enough buildings both in the Algarve and on the whole of the Iberian Peninsula. The market is largely saturated. People are operating at a lower level. Concrete is being used less and less, in recent years cement consumption has dropped to a quarter of what it was. Bad news for Cimpor, whose strategy is now to invest in the crisis states of the Middle East, to buy up smaller producers there because, both in Lebanon and Tunisia, cement will certainly be in demand again once new apartment blocks are to be built on the ruins of the civil wars. And Libya, Iraq and Syria are not far away.

Portucel/Sopocel and Cimpor both belong to Semapa SA, a PSI20 company quoted on the Lisbon Euronext stock exchange. Viewed over a ten-year timespan, Semapa shares have just recovered again well. In 2007, they were last trading at 13 euros each, but following the real estate crisis lost 70% of their value, and fell to under 5 euros in 2012. Now, in the middle of 2015, the shares are back up at close to €14. So, people wanted to take profits should decide to sell now. This is a big opportunity to turn to more sustainable investments from now on.

Money is time.

Anyone looking into the future will discover that time is playing an increasingly important role, and that money is only the means to an end. Knowledge is power, so why not invest the money right now in education for a sustainable tomorrow? Activities that can lead to inner peace and lasting happiness and appear to be meaningful and rewarding, certainly include the transformation of a piece of barren land, one-time eucalyptus forest, which we will be able to cultivate tomorrow. For this, a course in permaculture, or in beekeeping or aquaponics would be ideal. In the summer and early autumn, courses will once again be on offer in the Lisbon area and in the Algarve. Permaculture will give a person a lot of pleasure and represent an inner challenge.

Between Sunday, 19th and Friday, 31st July, the two-week intensive course “Permaculture” will be held at Terra da Deusa* in Palmela (Pq Industrial Vale do Alecrim, based on the work of Bill Mollison) to the south of Lisbon. Over the weekend of 25th, 26th and 27th September, the weekend course “Practical Introduction to Aquaponics” will be held in Monchique*. From Saturday 10th to Saturday 24th October, there will also be an intensive permaculture course in Vale da Lama* near Odiáxere/Lagos. These are three opportunities to use the summer to fill up with good, positive knowledge. And it already represents a good investment in the future.

To give money a positive meaning is the goal of various investment initiatives. As there is still no ecologically-minded bank (the discussion about a Portuguese Banca Etica is still onging), the Netherlands-based Triodos Bank (www.triodos.es) fills this gap. Anyone wanting to open an account there, or, for example, with the German Gemeinschaftsbank für Leihen und Schenken (literally: Community Bank for Loans and Gifts) in Bochum (www.gls.de), can quite simply apply without the bureaucratic hurdles of a Portuguese bank, and almost without any forms. You don’t even need a Portuguese tax number to open an account and online banking. Download the application form online and submit it with your ID (ID card or passport).

Anyone investing in one of the four green – high-risk – investment funds (minimum €250) would last year have earned between 4.3 and 14.4 percent in dividends last year.

The Triodos Sustainable Equity Fund, the Sustainable Mixed Fund, the Sustainable Pioneer Fund and the Triodos Sustainable Bond Fund have established a series of criteria for investors in terms of sustainability, social responsibility, and good management. As absolute transparency is one of the most important business principles of all banks in www.gabv.org that operate sustainably, investors are comprehensively informed about where and why their money is invested. Triodos Investment Management and GLS publish all the information about the fund’s investment universe online.

People wanting to invest their money conservatively for better conditions than those on offer in Portugal, should simply go the Triodos Bank in Spain and invest in one of four million shares in the bank at a cost of €50 each and with interest of between four and five percent, depending on the duration of their investment. It should be noted that 25% will be deducted in the tax that the Portuguese state (AT) levies on interest income.

Much less risky is simple membership of the cooperatively organised GLS Bank, which is one of the German “Volksbanken” (literally “people’s banks”). While our local Caixa Agrícola pays no interest at all for membership (why not actually?), with the German GLS bank you receive between two and four percent per year for shares from €500 upwards.

Direct investment in a project in Portugal

“It is at times of profound social change that small ideas proliferate and find fertile ground in people and in communities for a change towards equilibrium, towards harmony, towards sustainability. It is often in their dissatisfaction with and rejection of the status quo that people find the strength and determination to try out something new, different, something unique and innovative…“ Filipe Alves, director of the Biovilla project from Palmela/Lisbon, tells his social investors in his prospectus, and continues: “At a time when trust in banking institutions and in the euro itself are hitting rock-bottom – something that is very obvious in the devaluation on the stock market of all Portuguese banks, which are now only worth cents per share – it becomes vital to understand, promote and encourage alternative solutions. It was in this context and galvanised by the social innovation that is spreading throughout Europe and the world that Biovilla decided to invest in Portugal and implement a model of community financing in a conscientious and structured manner. This document (the prospectus) summarises this experience so that it can serve as inspiration for others.”

In the 25-page colour brochure for future investors (www.biovilla.org), the organisers of the Biovilla cooperative explain what, in their opinion, a “certificate for community investments” is and where it fits in the world of finance. This investment is a tool that provides private investors with the opportunity to be involved in a business that is not primarily profit-orientated in a participatory, integrated manner, and to co-finance it. From a legal point of view, it is a personal (individuals) or corporate (legal entities) loan, which has the goal of enabling people to make a social investment in return for interest, transparently and on a win-win basis.

During the whole process of raising funds for the 55-hectare sustainable eco-project, which sees itself as a sustainable training facility as well as being active in eco-tourism, and which works on solar power generation as well as permaculture agriculture, it is assisted by lawyers from the well-known Lisbon law firm Vieira de Almeida & Associados.

The Biovilla project and its different construction projects involve a sum of 550,000 euros, of which 500,000 euros have already been financed through different mixed investments from 13 private investors, a subsidy from PRODESCOOP, a prize from PRODER, Socialinvest and a micro-credit. The 50,000 euros that are still needed can be raised in the form of four different investments/loans: either with contributions of €5,000 or €10,000 or €25,000, or the total amount of €50,000. Interest of between two and three percent a year is paid on these loans. The term is between five (€5,000 and €10,000) and eight years (€25,000 and €50,000).

In response to ECO123’s queries, Filipe Alves stresses that there is also a very special “bonus return” for each investor, adding that this could be found on page 19 of the online prospectus…

About the author

Uwe Heitkamp, 53 years old, started working after university in daily newspapers and from 1984 on in public tv broadcasting companies such as WDR (Collogne), NDR (Hamburg), SDR (Stuttgart/Baden-Baden) in the ARD (first programme), wrote several books and directed the cinema movie about the anti nuclear movement in Germany in 1986 (Wackersdorf). After emigration in 1990 he founded 1995 the trilingual weekly printed newspaper “Algarve123” and later the online edition www.algarve123.com. Heitkamp lives for 25 year in Monchique, Portugal. He loves mountain hiking and swimming in streams and lakes, writes and tells stories of success from people and their sustainable relationship between ecology and economy. His actual film “Revolutionary Roads” tells the 60 minute story of a long walk crossing Portugal. 10 rural people paint a picture of their lives in the hills of the serra and the hinterland. The film captures profound impressions of natural beauty and human life. Along which path is the future of Portugal to be found? (subscribe to ECO123 und watch the documentary in the Mediatec)