Through blended finance, the program will train and fund bioeconomy businesses with a social and environmental impact in the Amazon region.
Photo: Ricardo Teles
Fundo Vale has announced a partnership with Living Amazon, an innovative financing mechanism recently launched by cosmetics company Natura in collaboration with the Brazilian Biodiversity Fund (FUNBIO) and VERT Securitizadora. Structured through blended finance, the program aims to strengthen organizations, cooperatives and supply chains related to social and biological diversity in the Amazon region. Fundo Vale will provide a non-refundable grant of R$3 million, which will be used to promote impact businesses. In this initial phase, the mechanism has already raised R$12 million.
Living Amazon operates through two financing mechanisms, aligned under the same governance process. The first mechanism is an Enabling Conditions Facility (ECF), supported by Fundo Vale and managed by FUNBIO. The ECF is non-reimbursable and available for investments in training, digitalization, infrastructure, habitat conservation and other initiatives aimed at structuring and strengthening Amazonian social and biological diversity chains. The instrument also seeks to promote the leadership of young people and women.
The second instrument is Agribusiness Receivables Certificates, managed by VERT, which offer funding at an interest rate of 8% per year. Natura will act as a financier, while also recommending cooperatives to access credit and participating as an investor and offtaker. This model connects cooperatives to the market, resulting in a virtuous cycle. In future, the program plans to involve other offtakers aligned with the program’s purpose.
“The blended finance model adopted by Living Amazon is innovative because it combines Agribusiness Receivables Certificates, which will be used as working capital for annual harvests, and the ECF, which guarantees resources for producers to do training. The bioeconomy in the Amazon has great potential to generate business, but it still depends on philanthropic investment to strengthen its productive capacity, through technology, management knowledge and infrastructure”, explains Gustavo Luz, the executive director of Fundo Vale.
The Living Amazon mechanism plans to stimulate development in around 16 locations, increase the production of more than 40 agricultural and extractive cooperatives and associations, and benefit more than 10,000 families in the Amazon. The Brazilian national development bank, BNDES, plans to get involved shortly to strengthen the program. Collaboration with multilateral banks is also planned.