Blended Finance solution boosts deforestation free soy production
Scaled Responsible Commodities Facility is now supported by AGRI3 Fund, Rabobank and Banco Santander to USD47 million.
The RCF is a highly innovative blended finance structure which is the product of pre-competitive, cooperation between the UK retailers who are all seeking to have positive impact upstream in the soy supply chain. The investment from the retailers is leveraged by the commercial banks and AGRI3 who support a mezzanine tranche. AGRI3 also provide funding for technical assistance to assist RCF farmers to start moving towards more sustainable agricultural practices.
The RCF offers low-interest loans to farmers in the Cerrado biome who comply with the ESG eligibility criteria and who commit to zero deforestation of native vegetation and to maintain in their farms forest cover over and above the minimum required by law.
The RCF is arranged by Sustainable Investment Management (www.sim.finance) and was originally launched in August 2022 for the 2022/23 Brazil soy growing season, with an initial investment of USD11mln by UK retailers Tesco, Sainsbury’s and Waitrose. After successful repayment of this first round of farmer loans, the RCF has now been expanded to USD47.2 mln for the 2023/24 season with an investment of USD36.24 million from commercial banks Santander, Rabobank, and impact fund AGRI3, thereby leveraging the impact of the initial investment made by the UK food retailers.
The impact of the RCF is measured using satellite imagery and CAR verification and then reported in a Statement of Environmental Impact which will be independently verified and discussed with an Environmental Committee which includes representatives of The Nature Conservancy, WWF, UNEP, Conservation International, Proforest, BV Rio and IPAM Amzonia.
Rabo Partnerships Blended Finance Team is proud to be associated with the RCF which is absolutely consistent with Rabobank’s strategy of accelerating sustainable agriculture and food supply and to assist corporate clients in meeting their sustainability ambitions. We look forward to working with SIM, the UK retailers and AGRI3 to scale the facility in future growing seasons.