PEDRO MOURA COSTA’s journey from plant scientist to eco-millionaire began on the end of a shovel in Borneo.
It was 1991 and the recent Oxford PhD had followed his wife to the island, where she had gone to study for her doctorate. It was there that he fell into what, at the time, was an unheard-of project.
The Dutch electricity board felt bad about a fossil-fuell power plant it had built in the Netherlands. To compensate, it bought a patch of rainforest in Sabah, Borneo, and put Moura Costa, a biotechnologist, in charge of rehabilitating it.
He was hooked on the idea. “It was a great experience, like living in the heart of darkness. There were elephants and orangutans in the garden,” he said.
“This was the time of the build-up to the 1992 Rio summit, where the idea that companies and countries should reduce emissions was officially launched. It seemed to me then that environmental finance was the best way to combat climate change.”
The experience was the inspiration for Eco Securities, the developer of low-carbon energy projects that he started not long after his return to Britain in 1997 with partner Marc Stuart. Seven months ago, JP Morgan, the American investment bank, bought the company for £122m. Moura Costa pocketed £12m for his 10% stake.
At 46, he is not sitting back to count his millions. He already has the next project in his sights: saving the Amazon.
Moura Costa has clubbed together with a handful of prominent Brazilians to launch Guardiam, a group that will invest in sustainable businesses in the Amazon. It is not a typical investment firm. The aim is to apply “private equity rigour but devote part of the proceeds to non-profit activities”.
In the past decade, 67,000 square miles of virgin Amazon forest, equal to Wales eight times over, has disappeared, gobbled up by logging, cattle-ranching and agriculture.
Deforestation is hugely damaging because it not only releases carbon dioxide locked in plants and soils, but also removes plant life that sucks CO2 out of the air. It accounts for 60% of Brazil’s pollution.
Moura Costa said: “It’s a daunting task, but this is a unique moment. Some of our founders have been directly involved with slowing deforestation. The Amazon is an enormous asset that could be exploited sustainably.”
Guardiam hopes to raise $300m (£202m) for its first fund later this year. Other partners include Henri Philippe Reichstul, former chief executive of Petrobras, the state oil giant, Ricardo Semler, a prominent Brazilian entrepreneur, and Joao Paulo Capobianco, the former environment minister who led the crackdown that has slowed the disappearance of the rainforest. In the next five years they aim to invest $5 billion in the Amazon.
It is a big ambition but Moura Costa is undeterred. He has had practice at going where others would not.
When he started Eco Securities, it was selling a product nobody thought they needed. The idea was to act as a facilitator, helping Western companies and governments find and fund clean-energy projects in the developing world. Poor countries would benefit from new low-carbon projects. Aside from the feelgood factor, though, there was nothing in it for Western backers.
That’s because the scheme that allows backers to claim “carbon credits” from the projects they fund abroad to offset the pollution they produce at home didn’t come into effect until 2000. Since then, 2,100 projects — two-thirds in China — have been certified under the UN’s Clean Development Mechanism (CDM).
Eco Securities — under JP Morgan — is the biggest player in the market. The ride to the top wasn’t without controversy. Environmentalists claim the CDM is fatally flawed, allowing the rich world to delay costly measures at home by throwing money at a few dubious foreign projects.
In the past 18 months, the top two agencies that verify CDM projects have been suspended by the UN after being unable to prove they had vetted the projects they approved.
The fits and starts played havoc with Eco Securities’ business. Moura Costa left a year ago after a disagreement with the board. His attempt to buy back the company led to an auction that was ultimately won by JP Morgan.
He is sanguine about the outcome, an attitude surely helped by the £12m windfall. “I would have liked still to be running it, but I was also happy to sell out at that price,” said Moura Costa, who now has a vehicle called E2 to invest in new projects.
“When I started out I would knock on the doors of institutions and have to explain what emission reductions and carbon sequestration were. Nobody knew. Now most of them have teams of guys making a living out of this.”
