Key Takeaways:
- DFC’s $50 Million Commitment: The U.S. International Development Finance Corporation (DFC) commits $50 million to mobilize $1 billion for BTG Pactual Timberland Investment Group’s (TIG) Latin American reforestation strategy.
- Groundbreaking Transaction: This marks DFC’s largest-ever carbon-negative transaction, sequestering carbon equivalent to the annual emissions of two-thirds of a million vehicles.
- Innovative Financing Structure: The transaction includes a sustainability-linked loan structure that incentivizes actions to improve water quality and habitat connectivity.
- Focus on Biodiversity and Restoration: The strategy targets the conservation and restoration of deforested and degraded properties, especially in the Cerrado biome in Brazil.
- Significant Impact: The strategy aims to protect and restore approximately 135,000 hectares of natural forests and plant millions of trees on another 135,000 hectares.
The U.S. International Development Finance Corporation (DFC) has announced a $50 million commitment to help mobilize $1 billion for the BTG Pactual Timberland Investment Group’s (TIG) Latin American reforestation strategy. The announcement was made in Oslo, Norway, during the Tropical Forest Forum, at a signing ceremony attended by White House Senior Advisor John Podesta, DFC Chief Climate Officer Jake Levine, and TIG Chief Sustainability Officer Mark Wishnie.
Largest-Ever Carbon-Negative Transaction
This commitment formalizes the investment highlighted by President Biden during the Major Economies Forum on Energy and Climate Change last year. It represents DFC’s largest-ever carbon-negative transaction. Jake Levine, DFC’s Chief Climate Officer, remarked, “This is a groundbreaking transaction for DFC. It will sequester carbon equivalent to the annual emissions of two-thirds of a million vehicles, restore and protect a special ecosystem, and catalyze investment in the Brazilian bioeconomy. We are proud of the innovative financing structure that incentivizes reforestation and regeneration in areas key to promoting biodiversity and protecting critical watersheds.”
Innovative Financing Structure
The transaction utilizes a sustainability-linked loan structure that rewards actions improving water quality and enhancing habitat connectivity. Mark Wishnie, TIG’s Chief Sustainability Officer, explained, “This transaction with DFC, in addition to directly increasing the area of forest we can restore and sustainably manage, can help to catalyze additional investment and enhance the positive impact of our investment through a sustainability-linked-loan structure that rewards actions that improve water quality and enhance habitat connectivity.”
Focus on Conservation and Biodiversity
By investing in both fast-growing timber species and native ecosystems, TIG aims to generate commercial revenue while protecting and restoring critical habitats. The strategy focuses on conserving, restoring, and planting deforested and degraded properties in selected regions in Latin America, including the Cerrado biome in Brazil. This approach targets deforested land previously used for cattle ranching or low-intensity agriculture, integrating commercial, biodiversity, and greenhouse gas sequestration goals.
Gerrity Lansing, Head of TIG, commended the initiative, saying, “We commend the leadership of both the Biden Administration and the DFC for recognizing the crucial role that large-scale nature-based solutions – including forest protection, restoration, and sustainable management – can play for climate, biodiversity, and rural development. This is another important milestone for our strategy with Conservation International, which will help deliver concrete outcomes on the ground.”
Significant Environmental Impact
The strategy aims to protect and restore approximately 135,000 hectares (more than 330,000 acres) of natural forests in deforested landscapes. It also seeks to plant millions of trees in sustainably managed commercial tree farms, independently certified to Forest Stewardship Council™ standards, on another 135,000 hectares of previously deforested and degraded land. To date, TIG has invested in 37,000 hectares, planted over 7 million seedlings, and initiated the restoration of approximately 2,600 hectares of natural forest.
