UNFCCC Reference No.: 3970
Nicaragua is one of the poorest countries in Central America. In Southern Nicaragua, near the villages of Sapoá and Esperanza, the majority of the population depend on small-scale agriculture and cattle farming for their daily livelihood needs. These activities however, offer very few employment opportunities. The natural forests have completely disappeared because of logging, fires, and establishment of pastures several decades ago. This process of land degradation has impacted the local environment, as well as the local communities.
The Nicaragua Precious Wood project is reforesting 813 hectares of degraded pasture lands near Sapoá and Esperanza with teak and native wood species, with the aim to alleviate poverty in these areas. Most of the native species being considered are threatened and some of them are protected under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). The project is also contributing to the sustainable development of Nicaragua through reforestation as well as helping to generate sustainable wood supplies that reduce pressure on natural forests and serve as carbon sinks. The project is developed by Precious Woods Holding AG, a Swiss private agro-forestry company, and is operated almost completely by the local communities. Precious Woods Holding AG also has operation sites in Brazil, Costa Rica, and other parts of Nicaragua. Its subsidiaries already have Forest Stewardship Council (FSC) certification for several of their existing agro-forestry activities. 
The reforestation activity is resulting in numerous environmental benefits, including prevention of fire and erosion, groundwater protection, and improvement of soil, microclimate, and biodiversity. The species planted under the project are teak along with a variety of valuable native species. Teak has been planted in Central America for several decades and is well adapted to the prevailing ecological conditions and has no significant negative ecological impacts on other ecosystems. Most of these native species have become rare or threatened due to overexploitation of natural forests in Central America, and they are important as fruit, food, and habitat for wildlife.
The project is helping to alleviate poverty by generating income and employment opportunities for the rural poor and landless, preventing their emigration to neighboring Costa Rica. It is a major source of employment given that the project is run almost exclusively by the local communities. Seasonal jobs being created from this project include tasks for planting, weeding, pruning, fire control, thinning, harvesting, and wood processing. The wages paid to workers are above average, which is significantly above the minimal wage. In addition to this, the project also provides training and career opportunities for young people.