LatAm land restoration project attracts $365m in private capital

A group of private sector impact investment firms has indicated commitments of $365 million to a Latin American and Caribbean project, Initiative 20×20,  to restore 20 million hectares of degraded forest and agricultural lands across Mexico, Peru, Guatemala, Colombia, El Salvador, Ecuador, Chile and Costa Rica.

The private sector involvement in the project highlights the increasingly relevant and important role that impact investors play in emerging market agriculture investment.

Althelia Ecosphere, an impact fund manager, has committed $120 million to Initiative 20×20 while Moringa, the agroforestry investment firm, has committed $80 million. Other investors include Permian Global, the natural forest investment firm, which is committing $100 million, and Terra Bella Fund, the frontier private equity fund for forest and agricultural emissions reduction projects, which has indicated a $60 million commitment. Another impact firm, Rare, will commit $5 million, according to the press release.

“Althelia is deploying capital in support of a portfolio of projects in the region to improve agricultural practices, restore degraded lands, and reduce pressure on natural ecosystems, with concrete results in emissions reductions, zero-net deforestation commodities, biodiversity, and livelihoods,” said Christian del Valle, founder and managing partner of Althelia in a statement.

Althelia has a €60 million Climate Fund and Moringa has raised €70 million for its agroforestry fund.

Other financial instruments and commitments from multilateral lenders are also in design and negotiation.

Working alongside research organisations, countries and regional programmes, Initiative 20×20 will try to reduce the amount of greenhouse gas emissions from Latin America and the Caribbean generated from land use, land use change and forestry, which currently account for half of all greenhouse gas emissions.

It will do so through land restoration, carbon storage, reforestation and more productive agriculture practices.

Initiative 20×20 is also part of the Bonn Challenge, a global goal to bring 150 million hectares of land into restoration by 2020.

Organisations involved include World Resources Institute, the International Union for Conservation of Nature, CATIE, and the International Center for Tropical Agriculture (CIAT).

“CIAT has understood for a long time the pivotal linkage between agriculture and climate change,” said Ruben Echevarria, the director general, in a statement. “We are committed to support initiative 20×20 as a cost effective approach to reduce greenhouse gases emissions while promoting improved soil quality, nutrient retention and agricultural yields.”