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Brazil’s Acre gets $72 million IDB loan for Sustainable Development Program

IDB to support second phase of successful program to reduce poverty and promote sustainable forestry

The Brazilian Amazon state of Acre will receive a $72 million loan from the Inter-American Development Bank (IDB) to finance the second phase of its sustainable development program, which seeks to boost the contribution of the forestry and agroforestry sectors to economic growth and poverty reduction, while keeping deforestation under control. 

The program, whose first phase also received IDB financing, will support measures to generate business opportunities in the protected areas that have been created to enable an environmentally sustainable supply of forest products (timer, and non-timber) and ecosystem services. Measures to be supported by the project include land tenure regularization and development of a forest concession system. 

The project will also provide technical assistance, financial support and basic infrastructure (rehabilitation of secondary roads) to help rural producers gain access to viable forestry value chains. Moreover, the project will support the development of a $60 million private equity fund, the first in the country to be supported by a state government. The fund will finance commercial reforestation projects, paving the way for the creation of partnerships among the public sector, smallholders, and competitive value chains to leverage resources to fund land recovery projects. 

In order to ensure sustainability, the program will improve the capacity building activities of the state government to improve land titling and administration, environmental licensing, monitoring and law enforcement, and management of the state forests. The project will support the streamlining of legislation and regulations, improvements in administrative processes, and strengthening technical capacities and facilities as well as the adoption of new technologies. 

As many as 300.000 hectares of state forests are expected to be auctioned in sealed tender biddings for sustainable forest management. The bidding conditions will be tailored to support the state industrial and environmental strategies. In addition, the project will support 8,000 rural producers to join sustainable agroforestry value chains by the end of the project. The project is expected to boost the contribution of the forestry sector to economic growth by 6 percent and income of rural households by 12 percent. 

The IDB loan is for a 25-year term, with a 5.5-year grace period and an interest rate based on LIBOR. Local counterpart funds total $48 million.The program will be carried out by the state’s Secretariat for Planning and Coordination (SEPLAN).

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