Agri3 Fund

AGRI3 Fund aims to mobilise additional public and private capital at scale, to contribute to sustainable agricultural value chains and avert deforestation.

The AGRI3 Fund aims to mobilise USD 1 billion of financing by providing credit enhancement tools and technical assistance to enable a transition to more sustainable practices in agricultural value chains and avert deforestation.

The Fund will provide guarantees to commercial banks and other financial institutions, and subordinated loans to customers of these institutions, which will become known as ‘partner-banks’, to mobilise financing by de-risking and catalysing transactions that actively prevent deforestation; stimulate reforestation; contribute to efficient sustainable agricultural production; and improve rural livelihoods.

A Technical Assistance (TA) facility has also been established to accelerate the development of investable opportunities and maximise their impacts. The TA Facility is managed by IDH The Sustainable Trade Initiative and works closely with the Fund Manager and Investment Advisers.

The Fund was born out of a partnership between UN Environment and Rabobank, who came together in 2017 to announce an ambitious partnership with the aim to unlock at least USD 1 billion in finance towards deforestation-free, sustainable agriculture and land use. The partnership has since expanded to include the Dutch development bank (FMO) and IDH The Sustainable Trade Initiative.

The Rationale
Dramatic increases in human population has led to a rapid expansion of agricultural production, which continues to be among the most powerful drivers of environmental degradation. As more land has been brought under cultivation and production is increasingly industrialised, agricultural production has become a major cause of deforestation, habitat loss, greenhouse gas emissions, soil and water pollution.
The transition to a more sustainable agricultural system that can meet future demand and promote economic development without exacerbating environmental degradation is therefore an urgent priority. However, such a largescale transformation, will require significant amounts of financing.
The financial sector can play a critical role in financing projects and solutions needed by farmers to change to more sustainable practices. This often requires long-term finance to make changes to key areas, such as irrigation, replanting, soil quality, forest and ecosystem protection, and new more efficient farm equipment. Yet there is a severe lack of commercial finance focused on promoting sustainability in agriculture.
Mission

The mission of AGRI3 Fund is to mobilise additional public and private capital at scale, including commercial banks, development finance institutions (DFIs), impact investors and institutional investors to: actively prevent deforestation; stimulate reforestation; contribute to efficient sustainable agricultural production and value chains; and reduce carbon emissions and improve rural livelihoods.

Objectives
To contribute to sustainable land use practices at scale, which means balancing enhanced sustainable agricultural output with forest protection and reforestation as well as improving rural livelihoods;
To provide credit enhancement tools (such as guarantees) to catalyse private funding from commercial banks and their eligible partners to qualified initiatives;
To stimulate initiatives that contribute to existing and innovative best practices in order to lower agriculture’s footprint and restore land use for agriculture and forest protection;
To reach farmers as priority beneficiaries; each investment should improve rural livelihoods and on top of that focus on at least one of the two following objectives: (i) sustainable land use and (ii) forest protection and reforestation;

To generate substantial, measurable environmental and social (E&S) impact by meeting the key performance indicators.

News

Rabobank closes transactions with de-risking by AGRI3 Fund

PRESS RELEASE 22 DECEMBER 2020
Rabobank, the bank specialized in financial solutions for agribusiness, in partnership with the AGRI3 Fund has just closed two transactions with de-risking by the Fund. The AGRI3 Fund, initiated by UN Environment Programme (UNEP) and Rabobank, facilitates collaboration between public and private parties and aims to unlock USD 1 billion in capital to speed up investment in farms that pursue more sustainable practices, including forest protection and improving rural livelihoods.