Ecotierra launches $50m sustainability fund, eyes Q1 2018 close

Sustainable agroforestry developer Ecotierra is launching a new investment vehicle that will finance projects in Latin America with a view to promoting sustainable agricultural practices and mitigating climate change.

The Colombia-based developer is partnering Fondaction, the development fund of Québec’s national trade union confederation CSN, and Mirova, a subsidiary of Natixis Asset Management dedicated to responsible investing and co-sponsor of the UN’s Land Degradation Neutrality Fund project, to develop the Canopy Sustainable Land Use fund.

Ecotierra, which will manage the fund, is aiming for a first close of $30 million and a final close of $50 million by the end of the first quarter of 2018, a spokesman for Ecotierra told Agri Investor.

Fondaction and Mirova will be responsible for micro-credit facility structuring and serving as a “catalyst for the new investment vehicle,” the spokesman said. Along with Ecotierra, both firms will be investing in the fund, the spokesman confirmed, without disclosing the amount each party will contribute. Fondaction and Mirova did not respond to requests for comment.

“The goal of the fund is to contribute to the sustainable development of communities by implementing sustainable agriculture practices, reinforcing the business model of small producer cooperatives and breaking the vicious cycle of migrating agriculture, which leads to degrading land, weakening value chains, socio-economic problems and climate change,” Ecotierra said.

Canopy SLF’s mandate is in line with Ecotierra’s broader mission of fighting climate change caused by deforestation and land degradation, which the company describes as two of the most underestimated concerns of our time.

“Every year, seven million hectares of tropical forest are lost and 12 million hectares of arable land are degraded to meet the needs of the global economy,” the company said. “That’s equivalent to half of Great Britain. […] Emissions from agriculture, forestry and other land use represent 30 percent of the total global greenhouse gas emissions.”

The fund will target private equity market-type returns, Ecotierra said. Coffee, cocoa and nuts are the specific segments Canopy SLF will invest in, the spokesperson added.