Overview
Amazonia Impact Fund I is a USD 25 million impact-linked debt fund by Amazonia Impact Ventures (AIV). The fund is capitalized with catalytic and commercial capital, and will deploy impact-linked loans in the agrifood sector, at competitive interest rates, for pre-harvest, operating, and capital expenditures.. The loans have sustainability-linked targets that incentivize biodiversity conservation and forest restoration as well as improving livelihoods.
The fund currently operates in the Amazonia region of Peru, Ecuador and Colombia with the intention of expanding to Brazil in the future.
Problem
Investing in indigenous and small producers, agri and forest-based value chains in the Amazon region is perceived as high risk for most investors, even impact investors. Risk mitigation and downside protection are needed to attract a wide range of conscious and impact-driven private investors looking for market-rate and near-market-rate returns. The few local banks and financial institutions operating in the Amazon region offer incredibly high-interest rates, usually excluding vulnerable populations such as indigenous peoples and local communities (IPLC). For the vehicle to provide affordable yet competitive interest rates, the cost of capital must be low, requiring a portion of concessional capital.
Solution
Amazonia Impact Fund I will directly address the problems of Amazonian deforestation, marginalization of indigenous communities who are forest guardians, and the low levels of investment in enterprises that generate revenues and connect these communities to global markets. Through debt financing and technical assistance, AIV’s support to indigenous and Amazon-based companies increases jobs and incomes generated by these businesses and the producers in their supply chains, connects them with improved marketing channels and improves their ability to measure their environmental impact.
CC Facility Support
The CC Facility is supporting Amazonia Impact Fund I with grant and acceleration support for the structuring and design of a carbon component, investor mapping and matchmaking, and climate adaptation and gender impact measurement and management.
Website
Amazonia Impact Ventures (AIV) - https://www.amazoniaimpactventures.com/