IFC Commits $50M to Boost $1 Billion Reforestation Strategy in Latin America

The strategy involves investing in sustainable commercial tree farms on half of the targeted land, while the other half focuses on restoring and protecting native ecosystems.

The International Finance Corporation (IFC), part of the World Bank Group, has announced a significant $50 million investment aimed at mobilizing $1 billion for the BTG Pactual Timberland Investment Group's (TIG) reforestation strategy in Latin America. This strategy, with Conservation International serving as impact adviser, is focused on addressing deforestation and land degradation across the region.

The commitment was revealed during a signing ceremony in São Paulo, attended by Alfonso García Mora, IFC's Vice President for Europe, Latin America, and the Caribbean; Roberto Sallouti, CEO of BTG Pactual; and Rachel Biderman, Senior Vice President for the Americas at Conservation International.

TIG's reforestation strategy targets the conservation, restoration, and replanting of deforested and degraded lands in Latin America, including the Cerrado biome in Brazil, a crucial and highly biodiverse ecosystem. Approximately half of the Cerrado has already been converted to other uses, making this initiative critical for ecological preservation.

The strategy involves investing in sustainable commercial tree farms on half of the targeted land, while the other half focuses on restoring and protecting native ecosystems. This integrated approach aims to blend commercial, social, and environmental goals, including biodiversity and greenhouse gas sequestration.

This engagement marks IFC's first partnership with an institutional timberland investment manager and is expected to generate carbon credits through nature-based solutions. The investment will support climate mitigation efforts, enhance sustainable forest management, and create economic opportunities in rural Brazil. The application of IFC's Performance Standards will ensure that sustainability risks are identified and mitigated.

The IFC loan is structured to offer BTG Pactual TIG better financial outcomes if the strategy meets specific targets for enhancing biodiversity, watershed health, and ecosystem services.

Alfonso García Mora, IFC's Vice President, stated, "Driving ecosystem restoration is essential for building a sustainable future. Our partnership with BTG Pactual TIG will leverage our expertise to promote environmental and social sustainability in Brazil and beyond, advancing our global strategy for a livable planet."

Roberto Sallouti, CEO of BTG Pactual, expressed enthusiasm about the partnership: "IFC's commitment supports our goal of delivering impactful outcomes and making the business case for large-scale nature-based solutions. Together, we aim to drive transformative change in Brazil and across Latin America."

Dr. M. Sanjayan, CEO of Conservation International, praised the investment: "IFC's support for TIG's ambitious strategy highlights confidence in innovative large-scale forest restoration. This funding will demonstrate how such projects can rejuvenate vital habitats, promote sustainable production, and benefit local communities. Conservation International is proud to contribute to this pioneering initiative."

The strategy aims to protect and restore approximately 135,000 hectares (over 330,000 acres) of natural forests and to plant millions of trees on an additional 135,000 hectares of previously deforested and degraded land. To date, TIG has invested in 37,000 hectares, planted over 7 million seedlings, and initiated restoration of about 2,600 hectares of natural forest.

This announcement follows a recent $50 million commitment from the U.S. Development Finance Corporation (DFC) to the same strategy.