Mirova’s Land Degradation Neutrality Fund exceeds $200m of commitments for its final close
First of its kind, the LDN fund invests in projects involved in sustainable land use – agroforestry, regenerative and sustainable agriculture, sustainable forestry on degraded lands.
Mirova today announces the final close of the Land Degradation Neutrality Fund (“LDN Fund”), an impact investment fund that invests in profit-generating sustainable land use and land restoration projects in developing countries. The fund’s final commitments are now over $208 million.
The LDN Fund, promoted by the United Nations Convention to Combat Desertification, and independently managed by Mirova, was launched in 2017, as part of One Planet Summit’s commitments to mobilise public and private capital in order to provide long-term financing to land-based projects that meet strict environmental and social standards. The fund invests in enterprises involved in sustainable land use – agroforestry, regenerative and sustainable agriculture, sustainable forestry on degraded lands, etc. – and aims to improve their sustainability and efficiency. Value is created through sustainable production, increased quality and market access within sustainable supply chains. Positive impacts targeted include climate mitigation and adaptation, biodiversity protection, rural development and gender equality.
There are many solutions available to preserve and enhance natural capital. The LDN Fund’s final close allows us, with the support of our investors, to accompany talented entrepreneurs through dedicated impact investments bringing much needed long term finance and spreading best practices.
The amount raised for a first fund of this type, unique in the world, demonstrates investors’ appetite for impact solutions. Blended finance helps in securing private investors thanks to the participation of major public investors. It is a powerful instrument to drive funds in new asset classes such as biodiversity and climate.
As a purpose-native and impact-driven asset manager, Mirova has identified early on the potential of investing in Nature-based Solutions. For more than eight years our teams have worked to create strategies to finance and bring to scale economically viable projects with a positive impact on natural capital and on communities.
The fund is structured as a blended finance vehicle, mixing commercial and concessional capital. In addition to initial public investors, the European Investment Bank and Agence Française de Développement, the fund is supported by the British Government and more recently by the Canadian Government. Such public support has helped Mirova convince private investors to allocate more capital to sustainable land use, which represents over 60% of the fund’s total commitment.
The LDN Fund has already committed to investments in eight countries in areas ranging from sustainable coffee and cocoa production, restoring deforested areas in Latin America, through to sustainable forestry projects and tree nuts production in Africa and Asia, each time with a strong focus on smallholders inclusion.
The first impact report has just been published, demonstrating tangible impact on the ground generated by innovative and promising entrepreneurs.
The LDN Fund is actively seeking new investable opportunities that bring both measurable and quantifiable impacts to land rehabilitation and natural ecosystems restoration as well as establish sustainable business models with development benefits for communities and a commercial return for investors.
The fund represents one of the three investment pillars of Mirova’s natural capital platform, which, in addition to the ‘sustainable land use’ pillar, counts the ‘blue economy’ pillar and the ‘carbon and environmental assets’ pillar.
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As the One Planet Summit Biodiversity, organised by the President of the Republic in partnership with the United Nations and the World Bank, comes to an end, we wanted to go over the announcements made that day as well as the objectives that Mirova had set itself when it published its Biodiversity 2020 Roadmap.
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.
The US$1.2 million facility allows the Marine Protected Area co-manager, Turneffe Atoll Sustainability Association (TASA), to implement a number of sustainable revenue-generating initiatives and enhance the protection of the 132,000 hectares of spectacular coral reef ecosystems. The investment will have a positive impact on the local economy, including coastal fisher communities.