AFRICA – The US$1 billion sustainable agriculture and forestry initiative, AGRI3, has been strengthened by two new investors – the Dutch Ministry of Foreign is contributing US$40 million and Rabobank, which will also match this amount.
These contributions will mobilize commercial finance, which can be used to finance sustainable agriculture and accelerate forest protection, which is key to mitigating climate change.
Growing demand for food is placing land and forests under significant strain. Seven million hectares of tropical forests disappear annually, and emissions related to agriculture and tropical forest loss contribute 24 percent to total global greenhouse gas emissions. This amounts to more than cars and planes combined.
The AGRI3 Fund was created by the UN Environment Programme and Rabobank, together with partner IDH and supported by FMO, the Dutch entrepreneurial development bank, to mitigate climate change.
“The AGRI3 Fund provides a unique opportunity to contribute to forest protection and sustainable agriculture at scale, while also helping to transform the financial sector’s attitude towards sustainable investments,” says HE Sigrid Kaag, Dutch Minister for Foreign Trade and Development Cooperation.
The fund provides additional de-risking financial instruments and grants for technical assistance for food value chain actors, and, particularly, farmers.
“As a cooperative bank, we see it as our role to help our clients accomplish the required shift in the agricultural value chains,” says Wiebe Draijer, Chairman of the Managing Board of Rabobank.
“The Dutch government supporting our partnership is a more than welcome complement. Together with our contribution, I’m utterly convinced these combined contributions will spur this shift,” explains Draijer.
“AGRI3 and similar land use facilities, catalyzed with the support of UNEP, are the cornerstone of the financial architecture for deforestation-free and nature-positive agriculture,” adds Inger Andersen, Executive Director of UNEP.
“We are very grateful to the Dutch government for their crucial contribution to the AGRI3 Fund. It is time for banks, investors, governments and agribusinesses to join institutions like Rabobank in financing sustainable food and forestry value chains, to save the climate, protect biodiversity, and ensure sustainable development,” he declares.
The Dutch government grant will help unlock further resources from impact investors and financiers. Farmers and food producers who would not normally have access to these resources now have an alternative to finance their investments in sustainable food production.
Now that the Dutch government has approved the US$40 million grant, the AGRI3 Fund will be up and running in the first half of 2020. The fund will be open to participation by commercial banks aiming at sustainable agriculture and forest conservation.