Mirova’s Land Degradation Neutrality Fund exceeds USD200m of commitments for final close
Mirova, an affiliate of Natixis Investment Managers dedicated to sustainable investing, has held the final close of the Land Degradation Neutrality Fund (LDN Fund), an impact investment fund that invests in profit-generating sustainable land use and land restoration projects in developing countries.
The fund’s final commitments are now over USD208 million.
The LDN Fund, promoted by the United Nations Convention to Combat Desertification, and independently managed by Mirova, was launched in 2017, as part of One Planet Summit’s commitments to mobilise public and private capital in order to provide long-term financing to land-based projects that meet strict environmental and social standards. The fund invests in enterprises involved in sustainable land use – agroforestry, regenerative and sustainable agriculture, sustainable forestry on degraded lands, etc – and aims to improve their sustainability and efficiency. Value is created through sustainable production, increased quality and market access within sustainable supply chains. Positive impacts targeted include climate mitigation and adaptation, biodiversity protection, rural development and gender equality
Gautier Quéru, Director of the LDN Fund at Mirova, says: “There are many solutions available to preserve and enhance natural capital. The LDN Fund’s final close allows us, with the support of our investors, to accompany talented entrepreneurs through dedicated impact investments bringing much needed long term finance and spreading best practices.”
Philippe Zaouati, CEO of Mirova, comments: “The amount raised for a first fund of this type, unique in the world, demonstrates investors’ appetite for impact solutions. Blended finance helps in securing private investors thanks to the participation of major public investors. It is a powerful instrument to drive funds in new asset classes such as biodiversity and climate”.
As a purpose-native and impact-driven asset manager, Mirova has identified early on the potential of investing in Nature-based Solutions. For more than eight years its teams have worked to create strategies to finance and bring to scale economically viable projects with a positive impact on natural capital and on communities.
The fund is structured as a blended finance vehicle, mixing commercial and concessional capital. In addition to initial public investors, the European Investment Bank and Agence Française de Développement, the fund is supported by the British Government and more recently by the Canadian Government. Such public support has helped Mirova convince private investors to allocate more capital to sustainable land use, which represents over 60% of the fund’s total commitment.
The LDN Fund has already committed to investments in eight countries in areas ranging from sustainable coffee and cocoa production, restoring deforested areas in Latin America, through to sustainable forestry projects and tree nuts production in Africa and Asia, each time with a strong focus on smallholders inclusion.
The first impact report has just been published, demonstrating tangible impact on the ground generated by innovative and promising entrepreneurs.
The LDN Fund is actively seeking new investable opportunities that bring both measurable and quantifiable impacts to land rehabilitation and natural ecosystems restoration as well as establish sustainable business models with development benefits for communities and a commercial return for investors.
The fund represents one of the three investment pillars of Mirova’ natural capital platform, which, in addition to the ‘sustainable land use’ pillar, counts the ‘blue economy’ pillar and the ‘carbon and environmental assets’ pillar.