The AndGreen Fund aims to prove that financing inclusive, sustainable and deforestation-free commodity production can be commercially viable and replicable, thus strengthening the case for a new rural development paradigm that protects valuable forests and peatlands and promotes high-productivity agriculture. To do so, the fund seeks to invest more than US$100million of its own capital into projects across Latin America by 2020, financing intensification of production and reforestation and conservation of adjacent tropical forest.
By offering long-term subordinate debt, AndGreen will catalyze commercial investors into its projects by decreasing their credit exposure and safeguarding their environmental risk through its due diligence and continuous environmental and social monitoring process. The target is to catalyze AndGreen’s investment five-fold into projects financed, resulting in over US$500million invested in Latin America during this period.
Potential projects need to clearly demonstrate how communities and smallholders are included in the project to ensure that forests are effectively protected within a landscape when financing the production of agricultural commodities that are sourced from tropical landscapes. It will do so by:
- Providing credit facilities only in jurisdictions with progressive forest and/or peat protection agendas and sustainable development strategies.
- Adding quantitative output-based environmental and social criteria and targets to the financing of commodity production.
- Improving livelihoods of smallholders by including them in high-productivity, sustainable supply chains.
- Attracting commercial investors into such projects by partly mitigating their credit risk (financial) and environmental risk (sustainability safeguarding).
- Stimulating innovation in business models and approaches to catalyze financially sustainable, deforestation free, socially inclusive, high productivity agriculture in tropical forest landscapes.
In 2020, the fund announced an 8-year, USD 10 million investment into Brazilian Roncador Group, for intensification through the low-emissions integration of cattle and soy production at scale on a large single farm in Mato Grosso State.
This investment is a blueprint for how intensified agricultural production, forest protection and social inclusion can go hand in hand, and how supply chains that are critical for food security, development, climate change mitigation and global biodiversity can be transformed sustainably.
“We are delighted to be financing a leading Brazilian farmer to roll out an ambitious intensification-conservation strategy whereby it will more than double its cattle production (tons of beef) on its existing farming area. Using the proceeds of our loan, Roncador will intensify production on all its 60,000 hectares of farmland (including 30,000 hectares of permanent pasture) and integrate cattle with soy through improved management and soil corrective activities," said Johnny Brom, Chief Investment Officer and Founder of SAIL Ventures, Investment Advisor to the &Green Fund.
