The AndGreen Fund aims to prove that financing inclusive, sustainable and deforestation-free commodity production can be commercially viable and replicable, thus strengthening the case for a new rural development paradigm that protects valuable forests and peatlands and promotes high-productivity agriculture. To do so, the fund seeks to have invested more than US$100million of its own capital into projects across Latin America by 2020, financing intensification of production and reforestation and conservation of adjacent tropical forest.
By offering long-term subordinate debt, AndGreen will catalyze commercial investors into its projects by decreasing their credit exposure and safeguarding their environmental risk, through AndGreen’s due diligence and continuous environmental and social monitoring process. The target is to catalyze AndGreen’s investment five-fold into projects financed, resulting in over US$500million invested in Latin America during this period.
Potential projects need to clearly demonstrate how communities and smallholders are included in the project to ensure that forests are effectively protected within a landscape when financing the production of agricultural commodities that are sourced from tropical landscapes. It will do so by:
- Providing credit facilities only in jurisdictions with progressive forest and/or peat protection agendas and sustainable development strategies.
- Adding quantitative output-based environmental and social criteria and targets to the financing of commodity production.
- Improving livelihoods of smallholders by including them in high-productivity, sustainable supply chains.
- Attracting commercial investors into such projects by partly mitigating their credit risk (financial) and environmental risk (sustainability safeguarding).
- Stimulating innovation in business models and approaches to catalyze financially sustainable, deforestation free, socially inclusive, high productivity agriculture in tropical forest landscapes.