Sustainable business impact fund invests in forest recovery project

The Amazon Biodiversity Fund (ABF), the first impact investment fund focused on sustainable business in the Amazon, will invest in the recovery of forest areas. A deal with INOCAS Soluções em Meio Ambiente, an environment solutions company that applies a new concept to the use of pastures by small producers.

The goal is to develop a crop-livestock-forestry system, and plant 5,000 hectares of macaúba interspersed with annual crops and cattle. The site is being selected from areas already mapped by a technical study in the Amazon. The initial investment will be R$ 6 million (about US$1,107 million), with the option of additional long-term investments.

The ABF is a Mirova Natural Capital fund jointly designed with USAID/Brazil and the Alliance of Bioversity International and CIAT. It is supported by members of the Partnership Platform for the Amazon (PPA).

Launched in 2019, the ABF is registered as an Investment and Participation Fund (FIP) for an 11-year term. It seeks to overcome financial challenges faced by startups in the Amazon, offering long-term impact investment to finance sustainable businesses (learn more about it here). 

As of April this year, the fund had already signed the first two contracts for long-term capital with a positive impact on biodiversity. The contracts were signed with Manioca, a business that promotes Amazon food products, and Horta da Terra, a producer of dehydrated non-conventional food plants (UFPs, on PANCs in the Portuguese acronym).

INOCAS CEO Johannes Zimpel reports that they worked with Mirova since 2016, this is the first time their partnership has reached the Amazon.

 "When we think of the agricultural frontier advancing into the Amazon region, we see the dynamics of soy advancing into livestock areas, and livestock farming advancing into the forest. This is a tragedy, but at the same time, it shows that people are seeking new forms of production. Combining macaúba with pastures increases productivity, regenerates the forest, and offers producers another source of income through the sale of macaúba oil and feed, which can replace soybeans. We managed to bring together activities that used to compete with each other," he says. 

According to Zimpel, this solution makes more rational use of the land. Productivity is five times as high, thanks to a pasture rotation system, in addition to the additional production of oil and feed during the “second production level”. "Over the years, it may be possible to create a protection belt through this type of consortium to prevent further impact on the forest, thus ensuring the conservation of standing trees and biodiversity," he adds.

Macaúba is a native Brazilian palm tree, which is highly resistant to droughts and can reach up to 25 meters in height. Its fruits grow in bunches, and each tree can produce up to 150 kilos. The fruit pulp is edible and sweet, and can be used for the production of oil and flour, as well as soap.

Macaúba trees start producing after five years. Planting is done in rows with an 8-meter space between plants — where other crops can grow, such as cassava, corn, rice, pineapples, and bananas. In addition, macaúba crop-livestock-forestry systems are able to sequester, on average, 20 tons of carbon equivalent per hectare/year, thus contributing to climate change mitigation.

Learn more about INOCAS here (in Portuguese).