Project detail - Castanheiras Serviços Ambientais, Restauração e Carbono Ltda.

Who is our prospective customer?

Castanheiras Serviços Ambientais, Restauração e Carbono Ltda. ("Castanheiras") is the project implementation and financing vehicle for a large-scale ecological restoration project in the Brazilian Amazon. The project is developed and technically managed by Biomas, a Brazilian restoration platform.

What is our funding objective?

FMO, through the Mobilising Finance for Forests Fund (MFF), proposes to provide a USD 25mln guarantee. The financing will support land restoration activities required to generate afforestation, reforestation and revegetation (ARR) carbon credits. The project will restore degraded land using more than 100 native Amazonian species and is expected to generate carbon credits over a 60-year period while delivering biodiversity and ecosystem restoration benefits.

Why do we want to fund this investment?

FMO's guarantee enables Castanheiras to access long-tenor, concessional local-currency financing that would otherwise not be available for a first-of-its-kind restoration project of this scale. The transaction is expected to mobilize funds from both private and public parties and demonstrates a scalable commercial model for large-scale restoration in the Brazilian Amazon. The project is expected to restore degraded pastureland while contributing to biodiversity conservation and improved ecosystem connectivity in a priority conservation region. FMO’s investment aims to support activities that contribute to climate mitigation and biodiversity, contributing to SDG 13, in line with FMO's methodology to determine the green finance attribution.

What is the Environmental and Social categorization rationale?

This investment has been categorized as Environmental & Social Category B+. The project involves large-scale ecological restoration activities in the Brazilian Amazon in a region of high biodiversity value. Relevant environmental and social topics include labour and working conditions, biodiversity conservation, management of restoration activities, stakeholder engagement, Indigenous Peoples considerations, community health and safety, management of contractors and supply chains, carbon project integrity, and biodiversity monitoring. IFC Performance Standards 1 to 4, 6, 7 and 8 are triggered. IFC Performance Standard 5 is not triggered since the land acquisition has been confirmed as being a willing seller- willing buyer transaction, and during the due diligence no risks of physical or economic displacement were identified. Extensive environmental and social due diligence has been conducted with support of specialized local consultant teams and a comprehensive Environmental and Social Action Plan (ESAP) will be implemented to strengthen environmental and social management systems.