Canopy Sustainable Land Use Fund (Canopy SLF) aims to generate returns for investors while providing significant social and environmental impacts through investments in sustainable agroforestry projects in rural areas of Latin America. The Fund’s investments will bring sustainable and commercially viable alternatives to current unsustainable land use practices that are causing land degradation, deforestation and CO2 emissions that, in turn, have negative environmental effects worldwide and threaten the long-term economic development of local communities.
Canopy SLF’s investment strategy includes financing and supporting cooperatives and farmers in their transition from unsustainable land use practices to more efficient and sustainable land use models based on cocoa, coffee or nuts. Canopy SLF will invest in structured agroforestry transactions at a landscape level that includes the following components:
- Loans to cooperatives and microcredit facilities to small farmers to establish new agroforestry systems or to implement management techniques to improve productivity and quality of products;
- Investments in infrastructure and equipment in joint ventures with cooperatives in order to increase the cooperatives' capacity to commercialize high quality, certified products such as cocoa, coffee, nuts and timber;
- Design and implement carbon sequestration and emission reduction projects to integrate climate finance as an additional funding source and to monetize their positive environmental impacts.
The Fund aims to raise US$50 million from various institutional and private investors and foundations with a first closing in mid-2017. The Fund will enter in a partnership with ECOTIERRA, a Canadian project developer, to manage the investments and operate the projects. Investment commitments are long-term and consistent with a 15-year investment strategy. There is an expectation to fully deploy the Fund’s capital with investments in at least five projects by 2020.