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AIV in the Amazon private sector investment landscape




12th November 2024


Amazonia Impact Ventures (AIV) has been mentioned in an insightful report written by the CrossBoundary Group under the USAID Climate Finance for Development Accelerator (CFDA).


The document highlights the limited capital at sub-US$1M ticket sizes in the Amazon private sector investment landscape. Equity and debt financing are scarce for smaller-scale nature-based businesses, particularly cooperatives and community-led projects.

 

While a growing number of Amazon-focused investment vehicles have emerged in recent years, there are still significant gaps in capital availability, particularly at smaller deal sizes. 


Some conclusions from the document:


  • Lack of availability of capital for intermediate ticket sizes (US$5-10M): Many nature-positive businesses struggle to secure flexible debt or equity at this scale, as larger impact funds prefer larger deals to justify transaction costs.

  • Lack of fit-for-purpose guarantees: Nature-based businesses often lack the collateral required to secure loans, limiting their ability to access financing. In contrast to sectors like energy, NbS projects face additional challenges such as land titling issues and the absence of off-take agreements, which further restrict their financing options.


The report also confirms that nature-based solutions can create a triple impact, mitigating greenhouse gas (GHG) emissions, conserving biodiversity, and driving economic growth.


AIV success in the Amazon


Traditional financial institutions often hesitate to provide small debit lines to these groups, hindering their ability to access the necessary resources. “AIV has successfully partnered with local organisations to support approximately 4,000 underserved smallholder producers, with a focus on women and Indigenous Peoples,” shared AIV co-founder Pajani Singah.


The urgency for forest conservation


Restoring and protecting the Brazilian Amazon will require substantial investment. According to the World Resources Institute, an estimated US$20B is needed annually – or 1.8% of Brazil’s Gross Domestic Product (GDP) – by 2050 to transition the Amazon to a sustainable, deforestation-free economy.


Singah believes that investing in sustainable businesses is a helpful strategy to address deforestation and regenerate degraded lands. AIV partners with Indigenous enterprises and smallholder farmer’s organisations to protect and restore the forest, investing in their livelihoods while they effectively manage ecosystems. 


“At the same time we invest, we also offer technical assistance to manage best practices of agroforestry in the Amazon”, added. Nature-positive businesses can help improve the sustainability of food systems, and supply chains for bioeconomy products, restoring the management of ecosystems. 


We want more people talking about investing in the future of the Amazon. A heartful thank you to all the contributors to this report, especially our friends, Stefano Cappanari and Jonathan Duarte.



See the full report here:



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