The $600 million facility will include $279 million investment funds from GCF and be one of the financing vehicles of the IDB´s Amazon Initiative, benefiting six Amazon countries
The Board of the Green Climate Fund (GCF) has approved the Amazon Bioeconomy Fund, an ambitious initiative from the Inter-American Development Bank (IDB) to leverage investments in support to climate change adaptation and mitigation in the Amazon basin through innovative bio-businesses that seek to conserve the Amazon ecosystems and biodiversity, boost climate resilience, and improve local livelihoods in the Amazon countries.
The Amazon basin contains the largest continuous area of tropical rainforests in the world, and it has a crucial role in regulating the Earth’s climate. Efforts to conserve the Amazon ecosystems’ integrity through innovative climate finance instruments, is crucial for the level of ambition needed to avoid an Amazon tipping point.
The Amazon Bioeconomy Fund Program is a regional, multistakeholder platform seeking to catalyze the flow of private funds to bio-businesses that increase climate resilience and reduce emissions while keeping the Amazon forests standing. These biobusinesses are perceived to have a high-risk profile, and the GCF approved funds in the form of loans, grants and equity will address critical barriers for de-risking private investment.
These bio-businesses are structured under different bioeconomy value chain that prioritize natural capital and deliver climate benefits, including sustainable agroforestry, native palm cultivation, non-timber natural forest products, growing native species timber, aquaculture, and community-led nature tourism.
The fund will be one of the financing instruments of the IDB’s Amazon Initiative. Launched in March 2021 with the participation of several countries of the Amazon region, the Secretary General of the Green Climate Fund and the Secretary General of the Amazonian Cooperation Treaty Organization, the Amazon Initiative seeks to foster socio-environmentally sustainable and inclusive economic development models in the Amazon region that benefit its diverse communities.
“This is a milestone that shows how we can leverage our shared tools to promote bioeconomy and sustainable development in the Amazon, which is essential to the Latin America and the Caribbean region and the world as a whole. This approval is the GCF's largest contribution to the IDB since in 2017, and we are proud to be GCF’s implementing partner on this essential work. Together, we can start to make a difference that moves forward crucial steps on climate action and brings economic growth and the private sector alongside our efforts,” said IDB President Mauricio Claver-Carone.
“This ground-breaking initiative shows what is possible when we combine forces to address the climate crisis. GCF’s $279 million investment as part of this $598 million programme will attract new sources of private funds for bio-businesses across six countries to protect this vital part of the global ecosystem, reducing emissions and enhancing climate resilience. Our partnership with IDB reflects not only GCF’s commitment to protect the Amazon, but also acts as a model of how the private and public sectors can act in unison to protect the planet”, said GCF Executive Director Yannick Glemarec.
Some of the expected results of the program include:
- Reduce 6.2 million tCO2e annually - 123.4 million tCO2e over a 20-year lifespan of investments.
- Enhance carbon stocks of forests under improved management and restoration
- Leverage $719.1 M in addition to $279 M in GCF funding. Leveraged resources include $319.1 million Program co-finance and an additional $400 million in private capital.
- Increase resilience and adaptation of more than 670,000 direct and indirect beneficiaries in six countries: Brazil, Colombia, Ecuador, Guyana, Suriname and Peru.
- Create a foundation, institutional capacity, and framework for markets to value the fundamental role of natural capital in business. Such foundation is expected to enable profitable, scalable, and climate-friendly production models in which private actors will be willing to participate and co-create.
About the GCF
The Green Climate Fund is the world's largest climate fund, mandated to support developing countries raise and realize their Nationally Determined Contributions (NDC) ambitions towards low-emissions, climate-resilient pathways. GCF operates through a network of Accredited Entities and delivery partners who work directly with developing countries for transformational project design and implementation.
About the IDB
The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social, and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.