The Reforestation Fund I LP

Customer

The Reforestation Fund I (TRF I), established in 2022, is a private equity timberland fund focusing on the ac-quisition of degraded land and the subsequent establishment of sustainably managed greenfield commercial tree farms on ~50% of the portfolio, and restoration of native forests and ecosystems on ~50% of the portfo-lio. The Fund targets the generation of high-quality forest carbon credits from both the restored areas and commercial tree farms. The Fund will invest in Brazil (≥ 50%) and Uruguay as well as potentially in other Latin American countries.
The fund will be managed by BTG Pactual Timberland Investment Group, LLC (“TIG”), part of the asset management vertical of Banco BTG Pactual S.A., a publicly listed Brazilian financial company. 

Funding Objective

DEG will participate with 20mln USD in TRF I. The funds will be used to acquire deforested and degraded land, restore and permanently protect natural forest on ~50% of acquired land and plant FSC-certified commercial tree farms on the remaining ~50% of acquired land. Additionally, they will be used to generate high-quality forest carbon credits and invest in processing facilities to manufacture climate-positive forest products.
This investment is supported by a guarantee from the European Fund for Sustainable Development Plus (EFSD+).

Reasons for financing

TRF I’s innovative investment model contributes to the mitigation of climate change (SDG 13) and the conservation of biodiversity (SDG 15) by restoring natural forest on previously degraded lands, thus sequestering carbon and returning valuable habitat to local species. Through the creation of sustainably managed commercial tree farms and processing facilities, the fund promotes jobs and local income (SDG 8) in rural regions, while contributing to the creation of a sustainable industry (SDG 9) that can provide products that substitute for less sustainable products such as cement or plastics.

DEG’s investment helps to fill a funding gap in underserved sectors (forestry, restoration and carbon credits).

The investment in TRF I contributes to DEG’s Impact and Climate Strategy and the achievement of its net-zero goal 2040, in alignment with global objectives under the Paris Agreement.

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