A special purpose vehicle (SPV) to provide long-term financing and technical assistance for cattle farms to transition to silvopastoral systems (SPS) in Colombia. Repayments will come from profit-sharing flows from productivity gains and the issuance of high-quality carbon credits.

In Colombia, SPS are a well-known alternative to improve productive, environmental, and social outcomes in grazing systems. Despite the proven benefits, SPS adoption is limited by compounded financial and knowledge barriers, with ranchers lacking access to investment capital and technical assistance. In Colombia, <25% of agricultural loans go to ranching, loan conditions (interest rates, collateral, repayment) are often misaligned with ranchers’ needs, and credit is frequently limited to working capital, excluding technical assistance.

SPV for Silvopasture Scaling acts as a market enabler that: 1) attracts impact capital seeking positive environmental and social returns; 2) provides enrolled farmers direct on-farm SPS and restoration implementation with technical assistance, overcoming the capital and knowledge barriers. The SPV is repaid over time through performance-based contracts via a mix of profit-sharing on yield improvements and high-quality carbon credits. The long-term nature of the agreement allows time for SPS to mature and thrive, as well as relieves pressure on the rancher.

The idea focuses on a crucial sector for emission abatement in Colombia and LAC, which is cattle ranching and the associated risk of deforestation and changes in land use. It has an impact on climate mitigation with reduced emissions from cattle enteric fermentation (gasses produced from cattle digestion) through improved diets, carbon storage in restoration, and reduced pressure for additional land conversion. Initially, the project aims to impact 500,000 hectares of land.