Global AgInvesting | 9 June 2020
&Green Fund commits $10m to Grupo Roncador for cattle, soy, and corn production in Mato Grosso
By Lynda Kiernan
The &Green Fund, a blended finance impact investment fund with a mission to protect forests and tropical forest commodities, has made its first investment in Brazil, announcing the signing of a $10 million, eight-year loan facility with Grupo Roncador, a cattle ranching, and corn and soy farming company in Mato Grosso.
Developed by IDH in collaboration with the Norwegian International Climate and Forests Initiative (NICFI), the &Green Fund invests in commercial, socially inclusive projects that exemplify the ability to decouple deforestation from commodity production. With backing from the Government of Norway, through its International Climate and Forest Initiative (NICFI), Unilever, and the Global Environment Facility (GEF), the fund has a particular focus on tropical forest issues, regions, and crops such as palm oil, soy, beef, and forestry.
With this vision, the fund’s goal is “to prove that financing inclusive, sustainable, and deforestation-free commodity production can be commercially viable and replicable,” according to its website.
“&Green’s USD 10 million, 8-year loan, complemented by a BRL facility extended by a leading Brazilian financial institution, provides Roncador and its financiers with the confidence to implement an ambitious sustainable intensification program that can serve as a blueprint for other farmers on how commercially viable cattle and soy farming can be combined with accelerated regulatory compliance and forest protection,” said Gustavo Oubinha, investment director for Brazil at SAIL Ventures, &Green’s investment advisor.
Launched in 1978 by founder Pelerson Soares Penido, Grupo Roncador has grown to be one of Brazil’s foremost agricultural groups. With a herd of approximately 70,000 head in the Araguaia Valley region, Roncador breeds, raises, and fattens cattle, and has continued to develop its production systems to integrate agricultural, livestock, and forestry conservation. Each year the group plants 50,000 hectares of soybeans, corn, and grass for grazing, which cycles nutrients, and supports the regeneration and organic matter concentration in the soil.
This investment from &Green will be used to support Roncador’s efforts to scale their sustainable production methods centered on the integration of livestock and cropping systems, and the regeneration of degraded pastures on more than 60,000 hectares of farmland.
Concurrently, Roncador also guarantees the protection of more than 70,000 hectares of forest, and the restoration of 200 hectares of forest.
As a means to achieve its goals, Roncador has collaborated with &Green’s investment advisor Dutch catalytics investment company SAIL Ventures to develop a comprehensive environmental and social action plan in addition to a landscape protection plan that commits the company to sharing its blueprint and expertise industry-wide to help other farmers and farming groups to understand, adopt, catalyze, and replicate the cropping-livestock integration system model.
“Supporting farmers in their efforts to develop more efficient production models in food production, soil regeneration and carbon capture is critical in tomorrow’s land use strategies,” said Pelerson Penido Dalla Vecchia, CEO, Group Roncador. “We welcome &Green’s focus on financing companies like ours, working on creating sustainable and commercially viable projects for the sector.”
This investment and Roncador’s efforts will help restore soil fertility, reduce pesticide usage, and will have a positive climate impact by reducing greenhouse gas emissions per unit of protein produced, while targeting lower absolute emissions despite increased production.
By not only neutralizing its own emissions, but also capturing surplus carbon in the soil, Roncador estimates a productivity increase of 58 percent from the same area of land with already reversed carbon emissions.
These efforts on behalf of the company align with the progressive green growth strategy of the State of Mato Grosso and the Brazilian Forest Code, which include investments in sustainable land use and intensification and improved farm management to reduce the pressure on forests.
And private investments such as this commitment by the &Green Fund play a critical role in securing public support for regulations and policies that combine sustainable low-carbon economic development with the protection of forests and biodiversity.
Nanno Kleiterp, Chairman of the Board of the &Green Fund noted, “&Green’s first investment in Brazil sends a message about rewarding and supporting reputable players that operate beyond “business-as-usual” from a production and protection perspective, and helping them to get to scale – this is core to &Green’s vision of decoupling commodity production from deforestation.”