Major UN-Backed Land Fund Targets the Coffeelands of Peru

Daily Coffee News photo.

Four coffee cooperatives and their surrounding lands in Peru have been identified for the first investment from a massive private and public development fund backed by the United Nations.

The Land Degradation Neutrality Fund (LDN Fund), which is operated by the French investment company Mirova, is seeking to generate and invest some $300 million USD by 2030 to work toward UN Sustainable Development Goal number 15. In particular, the fund supports the sustainable development of land, including reforestation, while reducing CO2 emissions by 35 million tons.

For its first major investment, the fund is devoting $12 million to a project in the coffeelands of Peru that will run for the next 15 years and involve some 2,400 smallholder coffee farmers who are part of four separate cooperatives, according to a Thomson Reuters report.

The nonprofit IDH, which is managing the technical assistance facility for the fund, said that the Peru project will attempt to transform 9,000 hectares of degraded land into productive agroforestry systems, while sequestering and reducing CO2 emissions by 1.3 metric tons.

According to project leaders, coffee farmers associated with the four cooperatives in Northern Peru will be trained in sustainable farming practices, the use of organic fertilizer and will be provided new disease- and climate-resilient seeds.

While technical assistance and the distribution of seeds or seedlings are common investments in the coffee sector, the LDN Fund represents a new mechanism for such agricultural development projects. When it was formally launched by the United Nations in 2017, the fund had already reached more than $100 million in investments from both the private and public sectors.

Pooling from investors committed to the goal of stopping land degradation, the fund is designed to offer financing solutions that can deliver longer-term impacts through longer project periods, longer grace periods or more flexible repayment schedules than may be offered by banks or other financiers, according to IDH.