news - FMO supports sustainable agroforestry in Colombia through USD .9 mln financing to Amazonia Nativa

On World Environment Day, FMO, the Dutch entrepreneurial development bank, announced a USD 0.9 mln repayable development contribution (RDC) to Amazonia Nativa, an agroforestry carbon project in Colombia. The project—supported with an equal USD 0.9 mln contribution from IFU, the Danish development finance institution—aims to afforest degraded pastureland in Colombia with a mix of native tree species and acai palms, which will improve soil fertility, biodiversity, sequester carbon dioxide and support sustainable economic development in the local area.

The Amazonia Nativa project is jointly developed by ACT Group and Campo Capital. Leading with science and driven by a team of technical methodology experts, ACT has designed the carbon program and will bring the carbon credits to global markets. ACT has provided bridge funding to catalyze the project’s launch and is structuring the finance necessary to achieve significant scale.  Campo Capital is a private enterprise experienced in agricultural and forestry developments in Colombia, leading the on-the-ground project management of the operations and the implementation entity established for this project. 

Using a mix of native timber species and acai palms, the Amazonia Nativa project will afforest degraded pastureland that has been primarily used for cattle ranching. This will lead to revenue generation from carbon credits and acai berries in the short run and—in the long run—from sustainable timber.

FMO’s RDC is made through the Mobilising Finance for Forests program, a blended finance investment program established in 2021 together with the United Kingdom government to combat deforestation and other environmentally unsustainable land use practices contributing to global climate change. The project is co-funded by the Danish DFI IFU, along with cash and in-kind contributions from the two project developers. FMO’s investment in Amazonia Nativa exemplifies its recent focus on market creation in its 2030 Strategy: Pioneer, Develop Scale. The approach aims to address the most pressing hurdles limiting budding business opportunities from becoming bankable, and requires partnership of complementary organizations and impact investors to design the various needed solutions in a value chain or entrepreneurial ecosystem. 

FMO and IFU’s financing will fund the initial pilot phase of the project, allowing Amazonia Nativa to plant approximately 530 hectares of native timber species and 20 hectares of acai palms, with the intention of scaling the program to at least 7,500 hectares.

Floor van Oppen, Mobilising Finance for Forests Portfolio Manager, said: “We are pleased to support the Amazonia Nativa project through our MFF program. This project highlights the important role of nature-based solutions to support climate mitigation, and provides FMO with the opportunity to gain a deeper knowledge of native species plantations that can help to protect and enhance local biodiversity in Colombia. With experienced local partners like Campo Capital and international developers like ACT, we look forward to executing our market creation approach by creating bankable and impactful projects like Amazonia Nativa.”

“The Amazonia Nativa project fits well with IFU’s aspiration to support climate action and greening the economy. We hope to see it evolve and become at project that can be commercialised and attract other investors as well,” said Jesper Kaspersen, Senior Investment Manager in IFU.

Jonathan Grassiano, Global Head of Research and Development, ACT, said: "We are proud to have FMO’s endorsement through their investment in Amazonia Nativa. This project is unique to us and our partners because it’s sound in science, exclusively focused on native species, with a multi-stream revenue model that incentivizes a permanent transition away from the deforestation historically caused by cattle ranching.  We have combined the ground presence of our Colombian partner, responsible for the communities and the implementation, with our technical forestry and sustainability market expertise.  Now we are ready to welcome corporates and governments willing to reach their net-zero goals, while also offering the whole region the choice to join our program and build a new sustainable ecosystem."

Paula Sanchez, Co-founder and Managing Partner, Campo Capital: "We are very excited to have the support of FMO and IFU to implement Amazonía Nativa, which is the first large-scale agroforestry project with native species in Colombia and a significant step forward sustainable development. By integrating better agricultural practices with reforestation efforts, we are not only enhancing the productivity and resilience of our lands but also contributing to the fight against climate change effects. This project exemplifies our dedication and passion to creating a harmonious balance between nature, agriculture, communities and world leading investors that request high management standards."

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About IFU

IFU - the Investment Fund for Developing Countries is a Danish impact investor contributing to green, just and inclusive societies as well as supporting the Sustainable Development Goals. We provide risk capital to companies operating in developing countries across Africa, Asia, Latin America and parts of Europe. Investments are made on commercial terms in the form of equity, loans and guarantees. Prioritized sectors are Green energy & infrastructure, Financial services, Healthcare and Sustainable food systems. IFU has co-invested in over 1,300 companies in more than 100 developing countries and emerging markets. Contracted investments total EUR 31 billion, of which IFU has contributed EUR 3.6 billion.

About ACT

ACT develops and provides comprehensive and innovative environmental solutions that empower businesses globally to act on and achieve their climate goals efficiently and transparently. Founded in 2009, thousands of customers worldwide rely on ACT's extensive global environmental regulation, market, standard, and product expertise to deliver real results. Providing solution discovery, optimized procurement strategy, environmental project development, and cutting-edge digital decarbonization services, as well as physical environmental products, ACT simplifies and streamlines its customers' journeys to net zero. ACT is headquartered in Amsterdam, with seven offices globally spanning North America, the United Kingdom, Europe, and Asia.

About Campo Capital

Campo Capital is a Colombian company created in 2010, dedicated to structure, manage and operate agricultural, forestry and environmental projects in Latin America, mainly in Colombia.  Campo Capital has USD65 Millions under management and operates more than 10.500 forestry hectares. Campo Capital’s primary goal is to channel capital into rural areas, generating environmental and social impact driven by SDGs. The company also offer consultancy services and structuration of projects of Nature Based Solutions.