The International Finance Corporation (IFC), part of the World Bank Group, has committed $50m (€46m) to help mobilise $1bn for the BTG Pactual Timberland Investment Group’s (TIG) Latin American reforestation strategy.
Conservation International serves as impact adviser for the strategy.
The transaction is IFC’s first engagement with an institutional timberland investment manager, which is expected to generate carbon credits through nature-based solutions, support climate mitigation efforts and strengthen sustainable forest management practices in Brazil. The investment is also intended to foster jobs and expand economic opportunities in rural areas of the country.
The strategy will also apply IFC’s performance standards for environment and social sustainability with a view to avoiding and mitigating risks.
IFC said its loan triggers “a better financial outcome for BTG Pactual TIG if the strategy meets specific targets” designed to enhance biodiversity and watershed health through connectivity corridors for plants and animals, and buffers along streams and rivers that can help provide ecosystem services for natural water infrastructure.
Alfonso García Mora, IFC’s vice-president for Europe, Latin America and the Caribbean, said: “Driving ecosystem restoration is a critical step to building a sustainable future. Working with BTG Pactual TIG will enable us to leverage our expertise, experience and global reach to promote environmental and social sustainability in Brazil. For us at IFC, this is beyond investment – we are advancing the potential of a livable planet for all in line with our global strategy.”
Roberto Sallouti, CEO of BTG Pactual, said: “We are thrilled to announce IFC’s commitment to TIG’s strategy, that not only enables us to pursue impactful outcomes on the ground but also supports the fundamental business case for large-scale, nature-based solutions. Together, we can drive transformative change, targeting significant climate, biodiversity and community benefits across Brazil and other Latin American countries.”
Dr M Sanjayan, CEO of Conservation International, said: “The IFC’s investment in TIG’s ambitious conservation and reforestation strategy signals confidence in this innovative approach to large-scale forest restoration. This funding will showcase how restoration projects can revive vital habitats, promote sustainable production and benefit local communities. Conservation International is delighted to be part of this initiative and we are committed to ensuring these pioneering investments set a new standard for ecosystem restoration and inspire the forestry sector to follow suit.”
With Conservation International’s support advising on environmental and social impact, the strategy aims to protect and restore approximately 135,000 hectares (more than 330,000 acres) of natural forests in deforested landscapes, BTG Pactual said. The strategy also seeks to plant millions of trees in sustainably managed commercial tree farms, independently certified to Forest Stewardship Council standards, on another approximately 135,000 hectares of previously deforested and degraded land, IFC added.
BTG Pactural TIG’s reforestation strategy focuses on the conservation, restoration and planting of deforested and degraded properties in selected regions in Latin America, including the Cerrado biome in Brazil, one of the most biodiverse, seasonally-dry ecosystems in the world. Approximately half of the Cerrado has already been converted to other uses, the company said.
By investing in projects that are dedicated to sustainable commercial tree farms across half their footprint, and the protection and restoration of native ecosystems across the other half, BTG Pactual TIG seeks to integrate the protection and restoration of important habitats with sustainable commercial production. This “forward-leaning approach targets deforested and degraded land”, it said.
Reforesting this land seeks to integrate commercial, social, biodiversity, and greenhouse gas sequestration goals into a single strategy, IFC added.
To date, TIG has invested in 37,000 hectares and has already planted more than 7m seedlings and initiated restoration of approximately 2,600 hectares of natural forest.
The latest commitment folllows a $50m commitment to the TIG strategy from the US’s DFC in June.
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