The Land Degradation Neutrality (LDN) strategy, managed by Mirova, has provided a profit-sharing loan of $15m to a cocoa and coffee project in Central America.

The financing by Mirova, an affiliate of Natixis Investment Managers, will be released in several tranches. It will finance the planting of cocoa and coffee (respectively 75% and 25% of land area), and to a lesser extent of timber for shade purposes, on farms surrounding the plantation. The objective is to expand the farm from the current 2,000 hectares, to 4,000 hectares, in partnership with the local community.

The project, Cacao Oro, was founded in early 2014 to produce sustainable and certified agroforestry-grown cocoa and coffee for sale in international markets, primarily the United States and Europe. It was set up in response to severe land degradation caused by over grazing, timber harvesting by private companies and illegal loggers, and extreme weather events.

The LDN is co-promoted by the United Nations Convention to Combat Desertification (UNCCD) and Mirova, and is a first-of-its-kind impact investment strategy investing in profit-generating sustainable land management and land restoration projects worldwide. The Cacao Oro project is its fifth investment and this number is expected to grow rapidly.

This project is very interesting, combining sound operations and positive impact generation,” says Gautier Queru, Director of Mirova’s LDN strategy. “The loan we are making will help harness sustainable markets potential, with a number of direct and indirect benefits for the community and its environment”.

The additional plantation of over 2,000 hectares is expected to (i) reforest a severely degraded zone, (ii) alleviate deforestation pressures from fuelwood, and (iii) for the additional plantation of hardwood species, recreate a canopy, protecting soils and improving water retention. In addition, a biodiversity reserve, containing the last of Nicaragua’s natural rain forest, is located northwest of the farm. Given the large influx of agricultural communities, the new plantations are also expected to create a natural barrier against deforestation.

The Mirova Natural Capital platform, established by sustainable investment specialist Mirova, is dedicated to providing innovative investment solutions to fight climate change and protect landscapes, biodiversity, soils, and maritime resources.

For further reading:
Mirova is an affiliate of Natixis Investment Managers.
Portfolio management company – French Public Limited liability company
Regulated by AMF under n°GP 02-014
RCS Paris n°394 648 216
Registered Office: 59, Avenue Pierre Mendes France – 75013 – Paris.

Natixis Investment Managers
Natixis Investment Managers is a subsidiary of Natixis.
Portfolio management company – French Public Limited liability company
RCS Paris n°453 952 681
Registered Office: 43, Avenue Pierre Mendes France – 75013 – Paris.

This communication is for information only and is intended for investment service providers or other Professional Clients. The analyses and opinions referenced herein represent the subjective views of the author as referenced unless stated otherwise and are subject to change. There can be no assurance that developments will transpire as may be forecasted in this material.

Copyright © 2021 Natixis Investment Managers S.A. – All rights reserved.