NEWS
A $1bn green bonds to boost sustainable Brazilian farming and avoid continuous deforestation in Brazil, particularly in the Cerrado region, driven by global food demand
07/15/2019 Since 2 years

A financing programme for sustainable commodities backed by green bonds, aimed at supporting Brazilian farmers and avoiding the clearing of the country’s grasslands, has been launched in London on July 4.

According to The Lab, the Responsible Commodities Facility provides financial incentives to produce soy in existing cleared and degraded lands in order to discourage further expansion of agricultural land in the Brazilian Cerrado. The Facility plans to provide low-interest credit lines to Brazilian soya and corn farmers who commit to avoid clearing forests and native grassland for agriculture and use degraded pasture lands.

Growing global demand for soy is driving continuous agricultural expansion and deforestation in Brazil, particularly in the Cerrado region. One option to ease this pressure is to redirect agricultural production towards lands already cleared from native vegetation and already degraded pasture lands by providing attractive crop financing and land restoration loans for soy producers, combining lower interest rates and longer repayment terms than most existing alternatives. This initiative will channel low cost loans to 600 farms, for a cumulative lending amount of more than US$ 3 billion over 10 years.

The Facility is thus seeking to protect or restore 1.5m hectares of natural habitat in the Cerrado, leading to an estimated emissions reduction of 250m tonnes of carbon dioxide, contributing to the implementation of the Brazilian Nationally Determined Contribution by which the country has pledged to reduce emissions by 43 per cent by 2030.

Sources:
-Financial Times
-The Lab: Responsible Commodities Facility

This post is also available in: Spanish

LATEST NEWS
Asset owners set and commit to report on 2025 targets to support 2050 net-zero emissions
Thirty-three of the world’s largest investors have committed to setting and reporting on 2025 targets to support the transition to net-zero greenhouse gas emissions by 2050. The final Net-Zero Asset Owner Alliance’s I...
Since 1 week Read More
Chile’s Energy Efficiency Law was approved
The Energy Efficiency Law aims to make rational and efficient use of resources. It covers the three sectors that account for most of the country's energy consumption: transport (37%); industry and mining (40%) and the...
Since 2 weeks Read More
With support from the IDB Group, BDMG makes its debut on the international sustainable securities market
IDB Invest, a member of the IDB Group, announced the acquisition of a seven-year $50 million sustainable bond issued by Banco de Desenvolvimento de Minas Gerais S.A. (BDMG). The operation consolidates BDMG as the firs...
Since 4 weeks Read More