The US government’s development finance institution has made a $50m (€46.5m) commitment to BTG Pactual Timberland Investment Group’s (TIG) Latin American reforestation strategy.

Development Finance Corporation (DFC) said it has made the commitment to help mobilise $1bn for the TIG strategy focused on the conservation, restoration, and planting of deforested and degraded properties in selected regions in Latin America, including the Cerrado biome in Brazil.

With Conservation International’s support, the strategy aims to protect and restore approximately 135,000ha of natural forests in deforested landscapes. The strategy also seeks to plant millions of trees in sustainably managed commercial tree farms, on another 135,000ha of previously deforested and degraded land.

Jake Levine, DFC’s chief climate officer, said: “This is a groundbreaking transaction for DFC. It will sequester carbon equivalent to the annual emissions of two-thirds of a million vehicles, it will restore and protect a very special ecosystem, and it will catalyze investment in the Brazilian bioeconomy.

“We are proud of the innovative financing structure which incentivises reforestation and regeneration in areas key to promoting biodiversity and protection of critical watersheds. Working with exceptional partners such as BTG Pactual’s Timberland Investment Group, the International Finance Corporation, and Conservation International is the only way we can bring these transactions to fruition and bring the scale of the capital markets to bear on the imperative to drive financing for natural climate solutions.”

Gerrity Lansing, the head of TIG, said: “We commend the leadership of both the Biden Administration and the DFC for recognizing the crucial role that large-scale nature-based solutions – including forest protection, restoration, and sustainable management – can play for climate, biodiversity and rural development.

“This is yet another important milestone for our strategy with Conservation International, which will help deliver concrete outcomes on the ground.” 

TIG’s chief sustainability officer Mark Wishnie, said: “This transaction with DFC, in addition to directly increasing the area of forest we can restore and sustainably manage, can help to catalyse additional investment, as well as enhance the positive impact of our investment through a sustainability-linked-loan structure that rewards actions that improve water quality and enhance habitat connectivity.”

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