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Superfoods also take care of Amazonia’s health
The development of sustainable value chains for quinoa, cocoa, sesame, and other high-nutritional-value crops can foster integration into international markets, benefit the region, and contribute to sustainable development goals.
By Adopting Traceability in Its Supply Chain This Company Managed to Become More Sustainable
In a world where sustainability is part of the DNA of business, an Ecuadorian company implemented standards to guarantee socially just and ecologically respectful practices throughout the value chain.
A Global Movement for Sustainable Growth Sprouts in the Heart of Amazonia
IDB Invest Sustainability Week 2024 brings together an array of public and private sector stakeholders, the impact investors community, governments, international organizations, and civil society in Manaus with one goal: scaling up impact.
What powers Chile's energy transformation?
Recently The New York Times highlighted Chile’s energy transformation. The profile told the story of Chile’s clean energy market revolution. However, missing from the story was one key component that facilitated Chile’s sustainable energy surge: donor funds. Donor funds supported by governments can lower cost and risk barriers, which limit financing for renewable energy projects. Donor funds invest in untested technologies and new markets, while also adhering to the highest social and environmental standards. Their purpose is to jumpstart climate-friendly investments in developing countries. In 2008, Chile had less than 20 megawatts (MW) of installed non-conventional renewable energy (NCRE), such as wind, solar and geothermal. The government’s Energy 2050 law set a target to increase Chile’s share of renewable energy to at least 60% by 2035. Despite developers’ enthusiasm for Chile’s stable political environment and resource endowment, which includes over 300 days of sunshine per year in the Atacama Desert, local banks had little or no experience with NCRE technologies. Donor funds: able to overcome cost and risk barriers But with access to donor funds, other organisms, such as multilaterals can deploy financial structures that overcome certain cost and risk barriers, making projects feasible for developers. Funds like the Clean Technology Fund (CTF) and the Canadian Climate Fund for the Private Sector in the Americas (C2F) allow us to “blend” our capital and ultimately take more risks. For example, in 2013, IDB Invest (formerly known as Inter-American Investment Corporation) used a C2F loan plus our own financing for Pozo Almonte and Calama Solar, Latin America’s first large-scale photovoltaic plants. The Chilean market evolved rapidly. By 2014, the Crucero solar project, which IDB Invest also financed, piqued the interest of a commercial bank. Soon commercial banks fully financed hundreds of megawatts of NCRE. Today, solar photovoltaic in Chile no longer needs donor money. Thanks in large part to donor funds, IDB Invest financed five photovoltaic projects in Chile and recently completed our first wind project, contributing to Chile’s 3,400 MW of NCRE. A recent Inspiratia article, which covered the Aela wind farm, recognized, “for Aela, the [IDB Invest] involvement was key, not only from a ticket size perspective, but also in helping the commercial banks get comfortable with the transaction. In the Cerro Pabellon geothermal plant, by channeling resources from the CTF, for which IDB Invest is the implementing entity, IDB Invest provided an insurance-like financial instrument to Enel Green Power to offset the high cost and risk associated with exploratory geothermal drilling — a risk most commercial lenders and insurance providers are typically unwilling to take. Development banks are one of the few players positioned to test first-mover risks and provide long-term tenors; however, it is the donor funds that are perhaps the unsung heroes of Chile’s energy transformation. Market forces taking over where donor funds left off is a trend that transcends Chile. Uruguay, Costa Rica and now El Salvador have all contributed to Latin America’s renewable surge which is 53% of total energy generation compared to the 22% world average. Back in Chile, the lure of cleaner, commercially-viable energy is now attracting the next generation of industry. Companies like Amazon and Alphabet Inc.’s Google would like to set up data centers powered by this renewable energy. These firms create jobs and offer training to the Chilean workforce. And so the renewable energy story continues. Subscribe to receive more content like this! [mc4wp_form]
Why is social inclusion good for agribusiness?
By 2050, a 60% increase of food production will be required, with only a 12% increase in arable land. Considering the social and demographic implications for agricultural producers, finding solutions to include them in production chains is a must. Latin America and the Caribbean region is the largest net exporter of food worldwide. Furthermore, the region has a third of the global fresh water resources, more than a fourth of high-to-medium potential production lands, and around 40% of biodiversity. However, the region has 14 million small-scale family farming, in vulnerable situation, who occupy 80% of the farms, produce 35% of lands, and provide between 40% and 50% of food, according to the study “The Next Global Breadbasket: How Latin America can Feed the World”. Gaps among agricultural producers Whether to raise cattle in Paraguay, grow coffee in Colombia or soy in Brazil, all kinds of agricultural producers are involved in the process, from large businesses to small producers and smallholders, including cooperatives. Although there are also intermediary actors, like in Argentina or Uruguay where larger scales are achieved by leasing lands. This is an already proven business model where the producers are not necessarily land owners. However, among these different types of producers there are gaps that are increasingly evident in terms of scale, access to financing and markets, and technology application. This issue is even more evident among small producers: only 5% has access to formal borrowing, and the continuous fragmentation of land ownership due to the inheritance factor (many times resulting in flawed titles) works against them when trying to achieve minimum scales. The key factor of this gap arises from the climate change effects (which is more evident in Central America due to the narrow distance between both oceans) that, together with scarce and expensive financing, price volatility, increasingly sophisticated technological advances, and climate insurance limitations, impact family farms income. As result, younger generations choose to migrate to large urban centers instead of continuing working in family farms, and thus an important social structure of rural communities keeps on deteriorating. In Mexico alone, the number of people living in rural areas decreased from 57% in 1950 to 29% in 1990, and 22% in 2010, according to the Instituto Nacional de Estadística y Geografía de México (Inegui). David and Goliath’s tale Meanwhile, the consolidation of producers could help the so-called “new generation of cooperatives” and other association forms to achieve larger production volumes to leverage their negotiation power. Along these lines, geopolitics and the global struggle to supply commodities continue being strategic for certain countries, and could become an opportunity for producers. The entry of the Chinese company, COFCO, after acquiring Nidera and Noble Agri, or the purchase of Agro Amazonia in Brazil by the Japanese Sumitomo Corp., are proof of this situation. While on the other side of the chain, if the regulating entities approve the mergers of Bayer-Monsanto, Dow-Dupont, and Syngenta-Chemchina, these companies would control 60% of the seed/biotechnology business, and 70% of the agrochemical industry. How to promote inclusion in production chains So, what can be done to promote inclusion in production chains? While some companies focus their acquisition strategies to purchase commodities from large-scale producers, other companies seek to develop their smaller clients, not only driven by a more social approach, but also because according to FAO, they have a productivity growth potential of 30% to 50% in sugar cane, dairy, and cattle production. To close the productivity gap, a likely and sustainable solution for small producers is long-term financing, provided by investment banking —through trust funds or similar vehicles—, in association with anchor businesses assuming part of the risk and supporting them with technical assistance programs. An example of this trend is the structured financing implemented by IDB Invest (formerly known as Inter-American Investment Corporation) and the International Finance Corporation (IFC), together with ECOM —a global coffee business— and Starbucks for coffee producers that have been affected by rust disease in Nicaragua. This article was originally published at the Huffington Post. Subscribe to receive more content like this! [mc4wp_form]
Soy: Paraguay’s “Green Gold”
This is the story of a small seed from Asia that has transformed the economy of a country in the heart of South America. Soy, a legume brought to Paraguay in the 50’s by immigrants from Japan, is today the country's main export product.
Three trends to impact business in 2017
The year 2016 marked a time of new beginnings, rapid changes and uncertainty. This is especially true in Latin America and the Caribbean’s private sector. Looking back, we see three trends that impacted the year and will define what is to come.
The best of 2015: Quinoa a super-food and super-solution to food security
Two years ago, the Food and Agriculture Organization (FAO) declared 2013 theInternational Year of Quinoa. Before then, it was scarcely found outside of colorful Andean marketplaces except at boutique shops in the U.S. and Europe. Now, many international food companies are embracing quinoa and exporting this super-food from Andean countries like Bolivia, Peru and Ecuador.
Infrastructure 360º Awards: promoting best practices in sustainable infrastructure
* By Ana María Vidaurre-Roche A sustainable approach to project design has allowed a metro line in Peru to reduce greenhouse gas emissions up to 80% above what regulations require. The line connects 11 districts across Lima and improves access and mobility, increasing the city’s productivity level by reducing commuting times by almost four times. The project has created meaningful actions that go beyond its immediate business: engaging community groups in cultural and reforestation programs to enhance public space, and helping address other visible problems such as social insecurity, youth unemployment, traffic chaos, and pollution. In the Dominican Republic, a wind farm project driven by a sustainable strategy provided an agrarian, low-income region with power and brought added value to the communities through educational and social programs, rehabilitation of community assets, and support of local businesses.