IFC invests in Natura's financial mechanism to strengthen socio-biodiversity economy in the Amazon

São Paulo, October 24^th, 2024 – IFC has just invested in the Amazônia Viva Financing Mechanism, developed by Natura, VERT Securitizadora, and the Brazilian Fund for Biodiversity (FUNBIO) to strengthen the socio-biodiversity economy in the Brazilian Amazon. With an initial investment of BRL6 million, this is the first time that the World Bank Group's institution focused on the private sector in emerging markets has financed traditional communities and family farmers in the Amazon region.

"IFC is pleased to provide financing and complementary knowledge to the Amazônia Viva mechanism, with Natura and Vert, to reach farmer’s cooperatives.  This project is a learning pilot in our constant search for alternative financing channels to support local communities, especially in the Amazon," said Manuel Reyes-Retana, IFC’s Regional Director for South America. "Private sector investments and this type of partnership will be key to supporting the sustainable development of the Amazon," he added.

To Ana Costa, Vice president of Sustainability, Legal, Reputation and Corporate Communications at Natura, financial mechanisms such as Amazônia Viva are essential to strengthening business models that combine regeneration, innovation, and appreciation of traditional knowledge in this biome. "We are very happy with the arrival of IFC, a partner that is a reference in sustainable practices in the financial market, and with some of the most stringent requirements in the sector. We are very honored by the trust of the World Bank Group in joining us on this journey, and very excited about scaling the chains of the socio-biodiversity economy together, boosting conservation and environmental regeneration, and generating more prosperity for local populations," said the executive.

IFC’s investment is in line with the institution’s strategy for the Amazon that aims to stimulate the development of sustainable agro-extractivism in the region by granting access to finance to farmers that lack competitive financing alternatives. It also helps to develop sustainable supply chains and attract private capital to support the mounting development needs of the Forest. IFC is one of the founders of Amazon Finance Network, an alliance that brings together financial institutions with the aim of increasing investment flows, mobilizing capital, and sharing knowledge to the Amazon region.

Credit and training

The Amazônia Viva Financing Mechanism is a blended finance instrument composed of a credit vehicle – structured in the form of an agribusiness receivables certificate (CRA), managed by VERT and a philanthropic fund of non-reimbursable investments aligned under the same governance process – the Enabling Conditions Facility (ECF), managed by FUNBIO and with resources from Natura, Good Energies Foundation and Fundo Vale. Both are operated under the same governance process.

The CRA bonds offer annual financing to cooperatives and socio-biodiversity associations in the Amazon with an interest rate of 8% a year. The credit is used, mainly, as working capital for annual harvests, making operations more efficient and increasing productivity. In turn, the philanthropic fund aims to make structuring investments in strengthening the socio-biodiversity economy and territorial development.  

Natura, a founding member of the mechanism and an investor in CRA and ECF, also continues as an off-taker, with a plan to purchase crops, mitigating risks for other investors. The company's participation as an integral part of the instrument's operation directly connects cooperatives and borrowing associations with the demand for production, linking credit with market access.

Investment application

With IFC onboard, the CRA of the Amazônia Viva Mechanism now has two quota types, called "mezzanine" and "senior" - the latter now remunerates investors. Previously, the hybrid financing instrument had only the subordinated quota, occupied by Natura. So far, the CRA has lent BRL 5.5 million to 13 cooperatives and agro-extractivist associations. With IFC and Natura’s resources, the total investments in the Mechanism will reach BRL9.2 million in the CRA, and BRL11.8 million in the ECF in the coming months.

"In addition, IFC will support VERT in strengthening the company's socio-environmental risk management system, enabling the mechanism to incorporate other socio-biodiversity chains and off-takers in the future."

About Natura

Founded in 1969, Natura is a Brazilian multinational hygiene and cosmetics company. With 2 million consultants in Latin America, Natura leads the direct selling sector in Brazil. It is a part of Natura &Co, the result of the combination between the Avon and Natura brands. Natura was the first publicly traded company to receive B company certification in the world, in December 2014, which reinforces its transparent and sustainable operations in social, environmental and economic aspects. It was also the first Brazilian company to win the "The Leaping Bunny" seal, granted by the animal protection organization Cruelty Free International, in 2018, which attests to the company's commitment to not testing its products or ingredients on animals. With operations in Argentina, Chile, Colombia, the United States, France, Mexico, Peru and Malaysia, Natura brand products can be purchased from Consultants, through e-commerce, the Natura app, in its own stores or in franchises "Aqui tem Natura." For more information, visit www.natura.com.br or access the company's profiles on social media: LinkedIn, Facebook and Instagram.