KIGALI, 17 September 2008 (IRIN) - A Canadian carbon offset development company plans to invest US$17m on reforestation projects in Rwanda over the next 20 years, one of its senior officials said.

Ecosystem Restoration Associates (ERA) has signed a memorandum of understanding (MOU) with Rwanda's Multisector Investment Group Ltd, which finances small-to-medium sized companies and will act as the local implementer of the offset programme.

ERA Chief Operations Officer Bart Simmons told IRIN that his company would pay Rwandans to plant trees using money paid by companies in the west to offset their carbon emissions.

"This will be our first project in Africa. Money paid to locals is an incentive to motivate them to plant more trees. We are already implementing similar projects in Canada and South America," he said.

ERA has to sign a carbon offset agreement with the Rwandan government before the scheme goes ahead. An official at the ministry of natural resources told IRIN that talks were already under way and that approval was expected to be granted before the end of September.

According to the MOU seen by IRIN, the Canadian company will invest $1m in its first year of operations in Rwanda and subsequently between $0.5 million $0.8 million every year till 2038.

In 1962, Rwanda boasted some 634,000 ha of forest cover. By 2004 this had fallen to 200,000 ha, according to government data. The quadrupling of Rwanda's population over the last 50 years has played a significant role in the deforestation.

Recent years, however, have seen several reforestation programmes in Rwanda, whose government is working to ensure that 30 percent of its surface is covered by forest by 2030.

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