Blended finance vehicle AGRI3, is officially launched
The blended finance vehicle will mobilize additional capital for sustainable agriculture and forest protection.
Mirova Natural Capital, FOUNT and Cardano Development are pleased to announce that the AGRI3 Fund was officially launched on April 23rd 2020, with the three companies acting as investment advisors.
The AGRI3 Fund is a blended finance vehicle intended to mobilise additional public and private capital, to support sustainable agriculture and forest protection. The Fund is currently in the process of scaling up operations and identifying a suitable pipeline of investments. This news follows the announcement made earlier this year by the Dutch Government and Rabobank, at the World Economic Forum (`WEF’) in Davos, confirming their combined USD 80 million anchor investment in support of the vehicle.
The initiative - led by UN Environment Program (‘UNEP’) and Rabobank and supported by FMO, the Dutch Entrepreneurial Development Bank and IDH - was created as a means to help address the limited capacities of commercial banks to finance sustainable and innovative agricultural solutions. To this end, AGRI3 works to provide additional de-risking financial instruments (e.g. guarantees) to partner-banks providing loans and investments to agribusinesses who pursue more sustainable practices. It is intended that these investments will serve as proof of concept to the wider community of banks, other financial institutions and value chain partners, with the aim to ultimately mainstream such sustainable practices across agricultural and financial value chains.
The investment vehicle will provide credit enhancement tools to commercial banks who are financing projects supporting the following impacts; (i) forest protection and reforestation and/or (ii) the transition to more sustainable land use practices; and will without exception, contribute to the third impact; (iii) improved rural livelihoods, with the ultimate beneficiaries of these activities being small or large groups of farmers located primarily in middle and lower income countries. These positive impacts will be measured based on a comprehensive Environmental and Social (‘E&S’) framework developed closely with UNEP.
In addition to the AGRI3 vehicle, a separate Technical Assistance (TA) Facility has been set up to support AGRI3 projects that require additional assistance on enhancing their E&S practices. The TA facility will be managed by IDH and will ensure the scaling-up of innovative sustainable agricultural practices to other farmers.
AGRI3 FUND is a Dutch Fund for Joint Account (Fonds voor Gemene Rekening), open to subscription to eligible investors as defined by the fund’s regulation. AGRI3 Fund Manager B.V. is the management company and has delegated investment advisory to Mirova Natural Capital. This fund is approved by the Dutch market authority (the "AFM").
On January 23, at the World Economic Forum (WEF) in Davos, the Dutch government and Rabobank announced they would be the first investors in the Agri3 initiative, a blended finance fund intended to channel commercial bank finance towards projects that support the transition to more sustainable agricultural practices and forest protection. Mirova Natural Capital will be the lead Investment Adviser to this innovative initiative aiming at unlocking at least USD 1 billion in finance towards deforestation-free, sustainable agriculture and land use.
Through the UK’s International Climate Finance programme, DEFRA1 will support Mirova's Land Degradation Neutrality (LDN) Fund with an anchor investment of £10m, to catalyse more private investment in land restoration and nature, to tackle climate change. This commitment of public capital will provide a protective cushion that will significantly reduce the risk profile for investments in the sustainable land-use sector and will leverage in the support of over USD $50m of investment from the private sector – inspiring confidence within environmentally sustainable activities and playing a catalytic role in the development of the Fund.
2020 and 2021 are pivotal years for taking action to protect nature and biodiversity. There are several key events coming up over the next few months. Among them: the New York UN summit on Biodiversity in September 2020, the World Conservation Congress organized by the International Union for Conservation of Nature (IUCN) to be held in Marseille in January 2021, the COP15 on Biodiversity in China in, as well as and the COP26 climate conference in Glasgow, both rescheduled in 2021.