Innovation That Matters

| Photo source Amazonian Impact Ventures

Sustainability-linked loans for indigenous forest peoples

Financial Services

A blended finance approach could help to protect the Amazon and improve the lives of local people

Spotted: In late 2022, governments met for COP15 in Montreal to discuss a new global deal to protect at least 30 per cent of our land, inland waters, and oceans by 2030. One key focus was to stop the use of biomass for energy, with scientists arguing that this destroys forests, accelerates climate change, and has devastating consequences for nature and wildlife.

To effect change, Amazonia Impact Ventures (AIV) is taking a unique approach. The enterprise has developed a blended finance approach that links indigenous peoples, investors, and businesses buying from the Amazon. The company uses investment funds to offer loans to indigenous businesses that are structured around agreed sustainability targets.

In addition to funding, AIV offers support to develop regenerative farming practices and sustainable land use, as well as improve marketing and product range. Buyers benefit from access to high-quality, deforestation-free commodities, and the Amazon bio-economy benefits from the strengthening of value chains of non-timber forest products such as wild berries, fruits, nuts, and native crops.

AIV has already invested $4.5 million (around €4.1 million) in indigenous enterprises and SMEs producing responsibly grown commodities and launched a $25 million (around €22.8 million) funding round at the end of last year. The aim of the new funding will be to improve sustainable land use over one million hectares of rainforest.

The approach used by AIV, using financing to support sustainability and protect land, is catching on among innovators. In the archive, Springwise has spotted it used in other locations, including by a financial platform that helps farmers switch to regenerative practices and a company that provides microfinance for smallholders.

Written By: Lisa Magloff



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