Amazonia Sustainable Supply Chains will be a mechanism that provides upfront finance for input providers in sustainable value chains in the Brazilian Amazon, based on offtake agreements. Such upfront financing will be conditioned on fostering sustainable supply chains that contribute to forestry preservation, engaging forest input off-takers from the start of the supply chain cycle as enablers and economic developers.
One of the greatest challenges in the Amazon is the development of economic models that combine the sustainable use of existing native forests (preserving over time its natural cycles, its resources and biodiversity) while supporting social and economic inclusion of local communities whose livelihoods depend on these standing forests. However, such communities and their small local businesses and cooperatives that they are part of in the region have limited access to credit. Simultaneously, even if some financial resources are available, limited understanding of how to develop sustainable bio-economy models leads small suppliers to the inefficient use of those resources.
Amazonia Sustainable Supply Chains provides upfront financing to cooperatives, small producers and farmers from the Amazon Forest. Backed by long-term purchase agreements coming from companies that depend on forest-based inputs in their supply chains, small suppliers will have access to resources they otherwise would not or would at a greater cost. Alongside a technical assistance facility, these resources will be applied to these suppliers, increasing productivity while fostering the development of a sustainable bio-economy of the forest.
“The Lab will be a crucial partner for refining and stress-testing our proposed solution, so that we can launch a robust, replicable, and scalable financing mechanism to develop resilient and sustainable supply chains in the Amazon and other similar regions,” – Carolina da Costa, Partner, Mauá Capital.
The proponent estimates over 10,000 families will benefit from income improvement because of increased productivity, strengthened cooperatives with technology and management installed near field production. Off-takers will benefit from increased reliability of their supply chains (due to the sustainable use of natural resources), increased productivity and enabling supply chains that deliver socio-economic and environmental benefits to their participants.
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