DEFRA commits £10m to Mirova’s Land Degradation Neutrality Fund
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 LDN Fund will support a pipeline of innovative and inclusive investments: such as smallholder cocoa and coffee agroforestry in Latin America and restoring degraded lands by planting nut trees with local communities in Asia – boosting the local economies of developing countries, aiming at driving down poverty and enhance carbon sequestration to combat climate change.
DEFRA’s investment will contribute to climate change mitigation and adaptation by supporting naturebased solutions such as agroforestry, reforestation, and regenerative agriculture, which deliver multiple social and environmental benefits. Through the LDN Fund, a track record can be built for environmentally conscious financing, which will be crucial to reach long-term environmental sustainability of the land-use sector and alleviate poverty amongst vulnerable rural communities.
The LDN Fund, initiated by the United Nations Convention to Combat Desertification, and Mirova, an impact asset management company affiliated with Natixis Investment Managers, is a first-of-its-kind investment vehicle dedicated to long-term financing of land restoration and sustainable land use projects in developing countries. It includes the European Investment Bank and the French Development Agency as initial investors. With a target size of USD$300m to be reached in 20202, DEFRA’s support is instrumental in reaching a critical size and contributing to the development of the sustainable land use sector, which currently contributes to 23% of all greenhouse gas emissions3.
The UK is committed to playing a leading role in tackling climate change and global biodiversity loss, which is why we are supporting Mirova’s important project with an investment of £10 million. The Government has also committed to doubling our spend on climate change and focusing much of the uplift on nature protection and restoration.
But we cannot meet these challenges alone. That’s why it’s important that our investment encourages wider private engagement in nature-based solutions to climate change, which will help to secure longterm social and environmental benefits worldwide.
The LDN Fund has already begun investing. After supporting a programme focused on restoring degraded land and promoting sustainable land management in Latin America, the LDN Fund and its Technical Assistance Facility4 have validated three new land restoration projects involving more than 30,000 small-scale producers in Bhutan, Indonesia and Kenya, aiming at restoring more than 45,000 hectares of land and capturing nearly 2 million tons of CO2.
We are very proud of the British government’s support. Broad coalitions of actors are needed to win the race against climate change and support systemic change in our economy. With such development of the LDN Fund, we are willing to contribute to the mainstreaming of sustainable land use and more generally nature based solutions.