The document discusses the AGRI3 Fund, which aims to catalyze $1 billion of public and private capital to support sustainable agriculture, forest protection, and rural livelihoods. The Fund provides guarantees and loans to commercial banks, development finance institutions, and microfinance institutions to de-risk eligible transactions that promote these goals. It is a joint effort between Rabobank, UNEP, FMO, and IDH, and has received $80 million from the Dutch government and Rabobank. The Fund works by providing up to $300 million in guarantees to partner banks to catalyze $1 billion in private commercial debt for sustainable land use projects. It also discusses the challenges of aligning incentives between impact goals and

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Proteção Florestal e Agricultura sustentável
Ivo Mulder, UNEP | March 2023 | Global Landscapes Forum, Luxembourg
Why, What & How: scaling sustainable and long-term
agricultural lending in developing countries

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AGRI3 Fund mission & objectives
The Fund will be used to catalyse USD 1 billion of public and private capital to support investments in sustainable
agriculture, forest protection and rural livelihoods by.
• Provides guarantees and subordinated loans to commercial banks, DFIs and MFIs to de-risk eligible transaction that promote forest
protection, sustainable agriculture and rural livelihoods
• Joint endeavour of Rabobank, UNEP, FMO and IDH. Investment advisors are Cardano Development and FOUNT.
• Dutch Ministry of Foreign Affairs and Rabobank contributed USD 80mn. The Fund is seeking to expand the investors up to USD 150m.

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How does it work?
$15 mln
Up to $1 bln
$300 mln
• AGRI3 is a blended finance fund which provides partial risk guarantees and credit enhancement instruments to Partnerbanks to
catalyse finance in sustainable land use projects
• AGRI3 will provide guarantees of USD 300 million which are used to catalyse private commercial debt to an amount of USD 1 billion and
thereby make projects and deals possible that would otherwise not have taken place.
AGRI3 is unique in its approach to mobilising investment in sustainable agriculture and forestry.
Financial Yield SDG Impact

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Renova Pasto
A new standardised loan product to scale finance for sustainable, deforestation free agriculture

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Challenges
There are a number of challenges to the fund
Aligning incentives
AGRI3 incentive focused on longer
tenor and TA support for transition –
but is this “carrot” enough for a farmer
Banking vs impact finance
Impact finance and banking are still
quite different worlds, but coming
together has great promise
Scalability
Whilst it is great to make an impactful
product, it is only impactful if there is
uptake by beneficiaries
Economic conditions
The world has changed in the last 6
months, and longer term, conditioned
finance has been harder to disburse.
E&S and Impact requirements
Making E&S and impact requirements
practical and achievable, whilst also
ambitious