São Paulo, Brazil, July 29th, 2024 - The International Finance Corporation (IFC), part of the World Bank Group, announced today a $50 million commitment to help mobilize $1 billion for the BTG Pactual Timberland Investment Group's (TIG) Latin American reforestation strategy. Conservation International serves as impact adviser for the strategy.
The announcement was made following a signing ceremony in São Paulo that included Alfonso García Mora, IFC's Vice President for Europe, Latin America and the Caribbean, Roberto Sallouti, CEO of BTG Pactual, and Rachel Biderman, Senior Vice President for the Americas at Conservation International.
The 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.
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. Reforesting this land seeks to integrate commercial, social, biodiversity, and greenhouse gas sequestration goals into a single strategy.
The transaction marks 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. These efforts will foster jobs and expand economic opportunities in rural areas of the country. In addition, the application of IFC´s Performance Standards will help the strategy to identify, avoid and mitigate risks, as a way of further integrating sustainability into business operations.
The IFC 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, Europe, Latin America and the Caribbean, stated: "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. 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. To date, TIG has invested in 37,000 hectares, and has already planted more than 7 million seedlings and initiated restoration of approximately 2,600 hectares of natural forest.
This announcement follows a June announcement that the U.S. Development Finance Corporation (DFC) has committed $50 million to the strategy.
ABOUT TIG
BTG Pactual (BPAC11) is the largest investment bank in Latin America, with a market capitalization of approximately $25 billion, offering a diverse range of services, including investment banking, corporate lending, sales and trading, asset management, wealth management, and banking. BTG Pactual Asset Management is a division of BTG Pactual with an international presence and $176 billion in assets under management and administration (as of Q1 2024). BTG Pactual Timberland Investment Group (TIG), a division of BTG Pactual Asset Management, is one of the world's largest timberland managers with $7.1 billion assets and commitments and nearly 3 million acres under management throughout the United States and Latin America (as of Q1 2024). TIG's team of more than 160 professionals has an on-the-ground presence through 21 offices, bringing local, regional, and global experience to bear on the management of client investments. For more information, please visit www.timberlandinvestmentgroup.com.
About IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2024, IFC committed a record $56 billion to private companies and financial institutions in developing countries, leveraging private sector solutions and mobilizing private capital to create a world free of poverty on a livable planet. For more information, visit www.ifc.org.
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