Brazil’s first restoration investment roundtable sparks private sector excitement

September 11, 2018

by Bruno Calixto, WRI Brasil

Brazil’s first restoration investment roundtable sparks private sector excitement

On August 7, investors and business leaders met in São Paulo as part of the first investment roundtable in Brazil to focus on financing landscape restoration. Restoration, the process of improving the health and productivity of the land, is one of the best and most economically efficient ways Brazil can address the devastating impacts of climate change – and achieve its Paris Agreement pledge.

In 2015, the Brazilian government committed itself to restore 12 million hectares by 2030 under the global Paris Agreement, but there was healthy skepticism at the time: Is there enough funding to support successful restoration in Brazil? Is there sufficient expertise to lead these projects? The meeting revealed that the answer to both of these pressing questions is a resounding “Yes!”

The roundtable, led by Initiative 20x20, a country-led effort to bring 20 million hectares of land into restoration by 2020, with support from WRI Brasil, the Secretary of Environment of the State of São Paulo and the Ministry of Agriculture, brought together funders and restoration practitioners. National and global investors with an interest in restoration were able to engage with Brazilian entrepreneurs running successful restoration projects, including business leaders in landscape management, forestry and sustainable agriculture.

There is money, and there are projects

Interest from seven impact investors at the meeting revealed that money is available to finance restoration projects in Brazil. Initiative 20x20 has mobilized funds from around the world, with impact investors already pledging a total of $2.6 billion towards restoration projects in Latin America and the Caribbean.

In addition, nine companies presented projects from six different states across the country, from São Paulo to Goiás, all delivering social, environmental, and financial benefits. Projects covered a diverse range of restoration practices, including reforestation with native commercial timber species, silvopasture and agroforestry. Agroforestry production offered many different types of high-value commercial products, including coffee, honey, peach palm (pupunha), acai, and macadamia nuts, among others. Together, the nine projects are set to restore more than 18,500 hectares.

Futuro Florestal, a company in the town of Garca in the São Paulo countryside, grows coffee surrounded by native tree species. Rodrigo Ciriello, the cpmpany’s director, was looking for financing for two agroforestry projects at the roundtable. “We are focusing on restoration and also commercial activities,” Ciriello said. “Our aim is to transform what is not working, degraded agricultural and pastoral lands, into forests and agroforests. It is a huge challenge, but we will move forward because we believe forests are the future.”

Restoration is economically viable and helps Brazil achieve its climate goals

Hosting an investment roundtable of this size is a clear step to scaling up agroforestry and silvopasture restoration projects in Brazil. The participation of the private sector is key, but their projects need to be profitable.

With that in mind, WRI Brasil recently launched the VERENA Project to demonstrate the economic and technical feasibility of restoration using native species on a large scale, as well as to highlight the social and environmental benefits. Planting native species can bring economic returns to investors and producers, creating a great opportunity to generate income and wealth in rural areas and at the same time increase forest cover. Analysis also shows that projects of this type can transform the land use sector from a carbon source to a carbon sink. The report, The Economic Case for Landscape Restoration in Latin America, a 2016 WRI study, estimated that restored landscapes could store more than 1.3 gigatons of carbon over 50 years if the goals of Initiative 20x20 are met.

Thanks to this meeting, strong interest has been established from both investors and entrepreneurs to create viable restoration projects throughout Brazil. The investment roundtable, a format common among tech start-ups to present promising new projects to funders, is new to the land-use sector. The roundtable in Brazil followed in the footsteps of other successful restoration investment roundtables led by Initiative 20x20 in Guatemala, Colombia and Peru.