FREQUENTLY ASKED QUESTIONS
ACRE is a for-profit company dedicated to combat climate change and re-wild tropical areas by restoring forests out of degraded land.
What’s ACRE's track record?
Since 2017, ACRE has tested its method of tropical forest restoration over 4 seasons in 4 different sites across Shan State, in Myanmar. Altogether 130,000 trees have been planted and maintained. Every new planting season is larger than the previous one.
How long is ACRE’s investment cycle?
As with all nature-based solutions to climate change, ACRE creates value with time: its investment cycle is 10 years, with dividends being paid to investors from year 6 to year 10.
What type of land does ACRE target?
ACRE starts with extremely degraded soils where a forest has been razed and small trees or even bamboo collected for charcoal and firewood. Such land would take 500 years or more to naturally regenerate a forest.
How can extremely degraded soils turn into a forest?
To regenerate extremely degraded soils, ACRE densely plants a first generation of nitrogen fixing trees, called the pioneer trees. After 3 years they form a protective canopy and they enriched the soil: therefore in year 4 the local forest tree species are planted and can grow, protected in the same way they are in a natural forest.
How does ACRE generate a return on investment?
The pioneer trees (see above) are harvested 20% each year, between year 6 and year 10, and sold on the market. First it creates a revenue for investors, second it also creates a market for sustainable timber, replacing natural timber, therefore further protecting existing forests.
How is ACRE protected against human destruction?
ACRE employs lots of labour (80 staff for a 150 acres program) and pays wages way above local average. In addition all income from the timber revenue stream is shared with the local communities. Local communities have a stake in the programme and always protect it.
What are the risks associated with supporting ACRE?
The single highest risk is wildfire. All plots are surrounded by a fire-fence (10 feet of naked earth), and all areas are guarded h24, 7/7, all year long by teams controlled live (geolocation trackers).
Other risks are interference or misunderstanding with local communities. ACRE employs a full time specialist of community management, with 30 years experience in Myanmar’s Forest Department.
How is my money spent if I buy one ACRE token?
One standard ACRE token is priced at US$1,210 for 1 acre, which is the 10-year total cost of restoring ONE ACRE of degraded land into natural forest using the ACRE method. This amount is spent over 10 years mainly in wages (80%) and equipment (20%). Over the life of the 10-year program, debt and revenues from pioneer trees’ timber supplement the initial investment.
How much revenue is generated by the program?
The program aims at planting 150,000 pioneer trees, each tree carrying a market value between year 6 (small tree) and year 10 (bigger tree) averaging US$8.00. The total revenue of US$1.25 mn is split between Return on investors equity (33.5%), community projects funding (18.5%), local tax (20%), debt repayment (20%), management expenses and incentives (8%).
How much do I get from a US$1,210 investment?
Assuming no loss due to natural or accidental conditions, US$1,210 invested in year 1 should result in dividend payments as follows:
Year 6 US$283
Year 7 US$393
Year 8 US$500
Year 9 US$668
Year 10 US$891
How does ACRE protect its rights?
ACRE is registered in Myanmar as a limited trading company. Its activities, registered with the Internal Revenue department in Yangon, include “Forestry and Logging”.
It is eligible to “Forestry & Logging” because its shareholding is 35% foreign (Vana Holding Ltd, from Hong Kong) and 65% local (a group of close friends of Tom and Philippe).
To protect the interest of the investors (100% of the funds coming from Vana Holdings), all local shareholders have accepted to issue a “preference share” to Vana Holdings. The preference share confers to Vana Holdings all voting rights and all economic interests in the management of ACRE.
What is the legal status of the land?
The 8 plots of land selected for the reforestation are all parts of the Myinmethi “village land”. It means it’s not under the control of the Ministry of Environment’s Forest Department, nor under the control of the Ministry of Agriculture. The council of the village has confirmed there is no ownership claim on these plots, and the same council, represented by the Village Chief, has selected the plots and invited ACRE to develop its program.
What is the status of Myanmar timber markets?
Myanmar timber markets is a State monopoly organised under the MTE (Myanmar Timber Entreprise). Historically, MTE’s only focus has been extracting hardwood from natural forests, and once depleted, at best, organising monoculture plantations. The result of these policies is the current environmental disaster the country is facing. ACRE initiative is meant to demonstrate the interest of sustainable timber initiatives.
How did ACRE come up with its financial projections/assumptions?
The business model developed is based on 4 seasons of plantations in a similar climate. Timber prices have been verified on the local market.
Timber growth assumptions are based on allometric equations derived from scientific literature available here.
The business model has been vetted by reputable conservation and development agencies such as RecofTc, The Nature Conservancy and IUCN, letters of reference available here.
What is the program’s impact KPI (=key performance indicator)?
The ultimate goal of the program is to turn deserted lands into a new natural forest, enabling the regeneration of underground watersheds. Tree coverage contribute to this goal by preventing evapotranspiration (the evaporation of the rainfall) and their roots system provide a path for the water to reach the underground. This program is meant to be sustainable, the resource being the pioneer species’ timber to be sold on the market.
Hence the KPIs are:
Number of pioneer trees planted surviving at least until year 6
Number of natural forest trees planted under the protection of pioneers on year 4
Amount of money resulting from the sales of pioneer species
Can I invest through a legal participation agreement instead of an NFT?
In any case, we’re going to request you to sign a participation agreement.
If you want, you can send us the amount corresponding to your participation by bank transfer to Vana Holding’s bank account in Hong Kong.
If you prefer the anonymity offered by crypto-currencies, you can pay the amount of your participation by purchasing the corresponding NFT.
How do I hold my NFT? Do I need a special account?
To hold your NFT all you need is a crypto eWallet.
A crypto wallet is a software application in which you store your crypto currencies or NFTs. However, these “cryptos” do not exist in any physical shape or form, they can’t technically be stored anywhere except eWallets. This type of software is easy to use and reliable while also being secure and fast.
What are the charges associated with holding an NFT? Selling the NFT?
There is no charge associated with holding the NFT. It simply sits into your eWallet.
Our NFTs are traded on the opensea.io platform, which charges a 2.5% fee on every transaction. So if you sell your NFT via opensea.io, that charge would be applied on the amount transacted.
How will proceeds come back to me?
At the end of year 6, after the harvest and sale of the first 20% of pioneer trees, we’ll send you a notification of the amount corresponding to your share of proceeds. We would then either:
Transfer it to your bank account, or
Transfer it to your eWallet
Can my NFT get hacked? Can I lose my hash/password?
There has been one hack reported on 20 February 2022. It involved 32 NFTs valued US$1.7 mn. This said, given the volume of daily transactions on the NFT market, the chance to be victim of such hack is very small.
The password (or rather the 12 words passphrase) that keeps your eWallet safe is entirely under your responsibility. Of course, don’t disclose. Beyond you disclosing your passphrase, there is no event to our knowledge where the blockchain has been hacked.
How do I sell my NFT?
You can sell your NFT on the opensea.io trading platform, where the collection is hosted.
See the NFT collection for yourself here.
What is the official record of ownership of the NFT?
You become the owner of the NFT when it appears in your eWallet.
The official record of this transaction is called the “transaction hash”, you can find it when you click on the NFT in your wallet.
You can obtain details on any specific transaction by entering this hash in etherscan.io
Are NFT bad for the environment, as maintaining their networks contributes to greenhouse gas emissions?
We have minted (i.e. registered to the blockchain) the collection of ACRE’s NFTs using the Polygon blockchain because it is generally considered as “The Eco-Friendly Blockchain Scaling Ethereum”..
Based on 100 validators taking part in Polygon's proof of stake network, the WWF concluded “each transaction on Polygon produces just 0.206587559 grams CO2,” which is a long way from the 124.34 kilograms of CO2 per transaction on the Ethereum network.