Project detail - Smallholder Agroforestry Finance B.V.

Who is our prospective customer?

Smallholder Agroforestry Finance B.V. (SAF) is a dedicated financing vehicle established to provide upfront financing to smallholder agroforestry projects developed and managed through the Acorn platform. Acorn works with a network of Local Partners ("LP"), including NGOs, cooperatives, farmer organizations and agricultural value chain actors, to support smallholder farmers across Africa, Asia and Latin America in transitioning from conventional agricultural practices to agroforestry systems while connecting them to voluntary carbon markets.

What is our funding objective?

FMO proposes a USD 17.45mln loan to SAF. SAF will provide financing to a portfolio of agroforestry projects where financing will be used for farmer input packages and selected operational costs of LPs, enabling smallholder farmers to establish and maintain agroforestry systems. The projects are expected to generate carbon credits while improving farm productivity, climate resilience, soil quality, biodiversity outcomes and farmer livelihoods.

Why do we want to fund this investment?

FMO's investment provides catalytic financing to a market segment that remains largely underserved by traditional financing. SAF addresses a key market challenge by providing long-term upfront financing to smallholder farmers and LP, allowing them to participate in high-integrity carbon markets. FMO, together with other DFIs, will contribute to strengthening governance, environmental and social standards, carbon integrity practices, client protection standard and broader market development for nature-based carbon finance. The investment is expected to contribute to climate mitigation through carbon removals and sequestration, while simultaneously supporting adaptation, improved agricultural productivity and enhanced resilience of smallholder farmers. FMO's investment aims to support activities that contribute to climate mitigation, contributing to SDG 13, in line with FMO's methodology to determine green finance attribution. In addition, FMO's investment aims to support activities that contribute to financial flows to smallholder farmers, contributing to SDG 10.

What is the Environmental and Social categorization rationale?

This transaction is classified as E&S Category B+ due to the geographic diversity of the underlying portfolio and the environmental and social risks associated with implementing smallholder agroforestry and carbon projects across multiple jurisdictions. SAF portfolio consists of smallholder agroforestry projects located across Africa, Asia and Latin America, implemented through LP and targeting low-income farming communities. Material E&S issues may include land and carbon rights, stakeholder engagement and benefit sharing, labor and working conditions, biodiversity impacts, community health and safety, and management of farmer expectations regarding carbon revenues. The projects are expected to operate in alignment with the IFC Performance Standards and are subject to Acorn's environmental and social management framework. Particular attention will be given to IFC PS1 (Assessment and Management of Environmental and Social Risks and Impacts), PS2 (Labor and Working Conditions), PS3 (Resource Efficiency and Pollution Prevention), PS4 (Community Health, Safety and Security), PS5 (Land Acquisition and Involuntary Resettlement/Livelihood Impacts), PS6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources), and PS7 (Indigenous Peoples). Given the nature-based and smallholder-focused character of the portfolio, biodiversity outcomes, stakeholder engagement, benefit sharing and climate resilience are expected to be key areas of monitoring. FMO, together with other DFIs, and Acorn have agreed an Environmental and Social Action Plan ("ESAP"), including actions related to environmental and social management, biodiversity monitoring, client protection principles and carbon integrity requirements. Compliance with these requirements will be actively monitored throughout the life of the investment.

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Date	Total FMO financing
10/13/2026	USD 6.98 MLN