Northern Province of Sri Lanka
Northern Province of Sri Lanka is the third-largest province in the country, covering a total area of 8,884 km², with a land area of 8,290 km². The province is divided into five administrative districts.
Jaffna
Mulative
Kilinochchi
Manar
Vavunia
The capital of the province is Jaffna while the largest district is Vavunia.
The Northern Province of Sri Lanka is characterized by two distinct geographic areas, namely the Jaffna Peninsula and Vanni. The irrigation and water supply of the Jaffna Peninsula is primarily dependent on aquifers fed by dug wells, while the Vanni region is irrigated by tanks fed by perennial rivers. The province is located in the Dry Zone, which typically receives an annual rainfall of 1,200-1,900 mm. Rainfall in the region is primarily received from the "North-East Monsoons," which occur between the months of October and January.
Types of Soil in Northern Province
In the Northern Province, soil types vary across different regions. The Jaffna Peninsula is mainly characterized by "Calcic red, yellow latosolic soils", whereas the majority of the province is dominated by "Reddish brown earth and low humic clay soils" and "Red yellow latosols".
The selection and maintenance of plants are influenced by the type of soil present. Thus, it is crucial to add nutrients to the soil based on its type. At SPE, we have a team of professionals who specialize in using both modern and traditional techniques to enrich the soil. Additionally, we carefully select plant species that not only thrive in their respective environments but also contribute to enhancing soil quality.
VEGETATION OF NORTHERN PROVINCE
The Jaffna peninsula is characterized by a prevalence of palm trees, while other areas of the Northern Province have a variety of tree species adapted to specific soil types and irrigation. Key crops cultivated in the region include cassava, millet, sorghum, groundnuts, beans, maize, and rice. The Northern Province presents promising investment opportunities in the agriculture sector, with potential for cultivating crops such as maize, finger millet, rice, cassava, sweet potatoes, common beans, soybeans, fruits, and vegetables. Notably, the region is renowned for its production of potatoes, onions, vegetables, grapes, and mangoes.
The official tree of the Northern Province is Kumbuk/Maruthu (Terminalia arjuna), which is valued for its water purification properties and is particularly suited for planting in water catchment areas. When selecting plants for cultivation, SPE considers their environmental impact as well as their suitability for the local region. The organization's team of experts is equipped with modern and traditional technologies to enrich soil nutrients and maintain soil quality.
LOCATIONS OF LANDS IN NORTHERN PROVINCE
SPE has identified over 6,000 acres of land suitable for its projects. Furthermore, certain islands may also be allocated based on project requirements.
A list of some of the identified lands is provided below, and legal documentation can be made available upon request.
Jaffna District - Eluthumadduval South: 96 Acres. |
Vauniya District: Lands in 35 locations have been identified already. Total Area size – over 4375 Acres. |
Mullaitivu District: Over 850 acres in 10 locations have been identified. |
Mannar District: 300 acres in 4 locations have been identified. |
Kilinochchi District: 850 Acres in 5 locations have been identified. |
Google map link: (All locations should be picked from the “Legend”)
CONFIRMATION ON LAND ALLOCATION FROM THE GOVERNOR OF NORTHERN PROVINCE OF SRI LANKA
Financial Projection for Planting Trees in 50 Acres in Northern Province of Sri Lanka
The lands to be allocated for the project are located in the Northern Province of Sri Lanka. Our multilayer approach to afforestation maximizes land usage, allowing for the cultivation of multiple plant species in a single acre and yielding higher outputs than planting a single species.
Short-term crops will generate revenue in the short run, while other crops and plants require a longer time to mature.
The project requires financing until it becomes self-sustainable and generates ample revenues to cover recurring operational costs and cash crops for each season.
To estimate the project's financial returns in the long run, a financial projection has been prepared based on actual funding requirements for a 50-acre land plot.
Summary of Financial Projection
| No. | Parameter | Value / Rate (USD) |
|---|---|---|
01 | Initial Investment requirement until the project becomes self- sustainable -Value in USD | 10,000,000.00 |
02 | Total Income from Carbon credits over 10 years -Value in USD | 15,794,156.90 |
03 | Revenue from Cash crops over 10 years - Value in USD | 35,885,982.52 |
04 | Total Revenue for 10 years - Value in USD | 48,985,985.65 |
05 | Return on Investment (ROI) | 516.80% |
06 | Internal Rate of Return (IRR) | 25% |
07 | Project breakeven period / Time taken to become Self- sustainable – In years | 4 YEARS |
08 | Cost per tree - Value in USD | 4.56 |
Cost Involved in the Project:
The initial cost for starting the plantation
Plant Costs
Equipment and tools cost
Irrigation system installation cost
Cost related to setting up of net houses
Solar Panel Installation cost / Electricity cost
Installation of Beehives (to improve biodiversity)
Clearing and preparation of lands
Labour Costs
Machinery rental cost
Transport charge / Operational cost
Compost cost
Project developer / SPE branding cost
Legal fees and stamp duty on contract
agreements
Insurance Premium
Recurring costs involved in the maintenance of the project are listed as follows
Maintenance Cost
(Cost related to machinery and labour)
Irrigation cost
Supervising and Monitoring Costs
PCS annual membership fee
Annual rental payments on land lease
*All costs are calculated according to current market rates in Sri Lanka. (Please note that the above-mentioned rates may slightly vary due to changes in USD/LKR rate and periodic changes in other rates applicable.
Short and Medium Term Crops
In order to generate income within the first six months of the project, short- and medium-term cash crops can be cultivated. This is especially important as the large and long-term commercial trees, which take approximately 3 years to become commercially valuable, will have a slower growth rate.
Peanuts have been identified as a valuable cash crop, as they provide a high return on investment and a significant nitrogen supply for other plants. As the other plants mature, some of these cash crops can be continued as an additional or minor crop in the "shrub layer." Other crops, such as cassava, corn, or vegetables, can also be grown to generate revenue for operational costs.
Projected incomes from these crops are as follows.
30% of the land – Peanuts |
20% of the land – Non-Specific short-term crops |
30% of the land – Cinnamon |
20% of the land - Other Crops |
Profit Distribution on Cash Crops
50% | For the Project Development Company |
25% | For the Local Community |
25% | For Administration and Operation |
Market / Demand for Products / Crops used in our Plantations
PEANUTS |
Global Peanuts market is projected to register a CAGR of 4.5% and reach USD107.4 billion by 2030. |
Asia-Pacific region has been identified as the largest market for peanuts. |
Largest consumers and exporters of peanuts are China and India, accounted for more than 36% of global market. |
Department of Agriculture in Sri Lanka promotes peanut production and provides required expert advice on farming peanuts. High-quality seeds are distributed by the department of agriculture of Sri Lanka. |
Ready buyers available for production locally, and internationally in UK and UAE for exporting. |
CEYLON CINNAMON |
Cinnamon Market (Consisting of both true cinnamon and cassia) size was valued at US$ 0.792 Bn. in 2020 and the total revenue is expected to grow at CAGR 7.83% through 2021 to 2027, reaching nearly US$ 1.34 Bn. (Market share of Sri Lanka – USD 206 million) |
Sri Lanka is the main producer of “Ceylon Cinnamon” also known as “True Cinnamon” and approximately 90% of true cinnamon market is dominated by Sri Lanka. |
Cinnamon is the 12th most expensive spice in the world. |
Sri Lanka obtained “Geographical Indication” (GI) certification for “Ceylon Cinnamon” from the European Union. |
High Demand for the product and low supply. Ready market available locally and internationally. Cinnamon Auction in Sri Lanka is open for local producers and international buyers. |
JACKFRUIT |
Global jackfruit market was valued at USD 297.77 million in 2021, exhibiting a CAGR of 3.42 % and projected to reach USD 382.48 Million by 2028. |
Jackfruit trees are used in SPE plantations as a high carbon sequestration tree as well as a tree with food value. Jackfruit is called as “The Rice tree” in Sri Lanka as it contributes largely for combatting hunger. |
An Ideal candidate for SPE projects to support UNSDG “Zero hunger” |
A variety of products associated with Jackfruits are available. |
High demand for jackfruits locally and internationally. |
Local – High demand for jackfruit locally. As a main dish, staple food. Ideal for facing forecasted food crisis. Ideal alternative for meat hence popular among vegans. |
Historical data, proved for combatting hunger in Sri Lanka during world wars. Sri Lanka never faced food crisis thanks to this single fruit also known as “The Rice tree” |
BLACK PEPPER |
The global black pepper market reached USD 3.9 billion in 2021, exhibiting a CAGR of 5.37% and projected to reach USD 5.4 billion by 2027. |
Sri Lanka contributes only for 2% of the global market. |
“Ceylon pepper” is high in piperine and has a distinctive flavor which is favoured worldwide. Ceylon pepper has secured a premium price in the international spice market and has a high demand. |
Tree Planting / Agriculture as an Asset Class
The primary objective of SPE's tree planting initiatives is to facilitate carbon sequestration. However, by incorporating plants with commercial and agricultural significance in a multilayered approach to optimize land utilization, the project offers additional benefits.
The key advantages of this strategy include:
High returns
Inflation protection
Diversification
Limited economic relationships
Biological growth
Advantage of Insurance / Payment Guarantee on Trees, Crop / Damages
SPE has implemented insurance coverage for risk management purposes, whereby plants and crops are protected against a range of potential hazards, such as fire, flooding, drought, lightning damage, hail, pests and disease, wild animal damage, theft, and vandalism.
The types of risks covered are determined based on specific regional and local characteristics. Additionally, weather index insurance techniques are employed to safeguard plantations from any damage caused by anomalies in natural weather patterns.
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