Land Degradation Neutrality (LDN) Fund makes first investment towards sustainable land management

The Land Degradation Neutrality (LDN) Fund has made its first investment, in a program to restore degraded land in Latin America through agroforestry practices. IDH, which manages the Technical Assistance (TA) Facility of the Fund, will maximize the positive impacts of this and other programs  funded.

The LDN Fund has selected Urapi Sustainable Land Use (Urapi), a program focused on restoring degraded land and promoting sustainable land management in Latin America, for its first investment. Conceived by the project developer ECOTIERRA, Urapi aims to develop and implement agroforestry projects and to strengthen value chains through partnerships with cooperatives of small-scale producers. Urapi seeks to reverse land degradation and combat climate change by implementing sustainable agricultural practices and strengthening the economic models of cooperatives, while also promoting social inclusion.

The first project developed, financed and implemented by Urapi involves four coffee cooperatives in Peru and aims to reforest nearly 9,000 hectares of degraded land into productive agroforestry systems, sequester and reduce CO2 emissions by 1.3 metric tons, and improve the livelihoods of 2,400 producers.  IDH’s LDN TA Facility intends to support the program, for example with respect to credit management.

As the LDN Fund and TAF entered its operational phase, the Strategic Board met for the first time on the 15 January, led by Monique Barbut, Executive Secretary of the United Nations Convention to Combat Desertification (UNCCD), which promoted and spearheaded the design of the LDN Fund. Members of the Strategic Board include Patricia Espinosa, Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC), and Cristiana Paşca Palmer, Executive Secretary of the Convention on Biological Diversity (UNCBD). The purpose of the Board is to make recommendations on the Fund’s strategic direction and ensure its alignment with policies to fight land degradation and climate change.

The LDN Fund provides long-term financing as well as technical assistance to sustainable land management project developers in the agricultural and forestry sectors.

IDH was chosen to manage the Fund’s TA Facility. This Facility will help to maximize the positive impacts of projects funded by the Fund, to balance the project portfolio, and to implement a framework to measure the contribution of projects to reducing land degradation.

IDH was selected to manage the Fund’s TA Facility, leveraging on its landscapes, supply chain and public-private partnership experience. The LDN Fund benefits from the experience of the Mirova Natural Capital platform and the Althelia Funds range when making investments. The LDN Fund plans to make further investments in sustainable land management projects over the coming months, with a focus on Africa and Asia.

Gautier Queru, Director of the LDN Fund, said:

The LDN Fund is meant to mobilize private capital to support land restoration and transition to sustainable land use. It provides to land operators the long-term financing needed to implement such transition on the ground. Beyond the long-term financing component, it is also essential to bring technical assistance to improve project operational robustness and maximize environmental and social impacts. This is why the LDN Technical Assistance Facility managed by IDH is a critical part of the set-up.”

Nienke Stam, Senior Program Manager for the LDN TA Facility at IDH, said:

“By the end of the first quarter of 2019, the TA Facility will be open for applications. IDH will select projects that have the potential to become investable within 24 months for investment readiness support, and also work with investees of the LDN Fund on strengthening sustainable land management practices.”

The Fund’s investors include public investors such as the European Investment Bank, the French Development Ministry (Agence Française de Développement, or ADF), and the Government of Luxembourg, as well as private investors such as Fondaction, the Fund’s first North American investor, Fondation de France, BNP Paribas Cardif, Garance, and Natixis Investment Managers.

The team continues to raise funds to meet their goal of USD 300 million.

The LDN Fund aims to support the sustainable management of land, to reduce CO2 emissions by 35 million tons, and to create jobs or improve livelihoods for over 100,000 people through its investments.

The TA Facility is supported by ADF, who signed off on a first EUR 3 million contribution, and Global Environment Facility, of GEF, who approved an initial USD 2 million contribution.

Find out more about the LDN Fund TA Facility

Photo: Guillaume Nadeau /ECOTIERRA