Organic Agroforestry Coffee Prepares to Scale Production in the Amazon

Innovative investment round boosts coffee production combined with carbon credits

April, 2022 - IDESAM, Amazônia Agroflorestal, Mirova Natural Capital, and Axcell formalized a partnership attracting R$11 million in investment to expand the production of Café Apuí Agroflorestal, in a sustainable manner, with a return on investment in carbon credits.

Thanks to this capital injected into Amazônia Agroflorestal in partnership with IDESAM, more than 300 families will be included in coffee production in Apuí, in southern Amazonas, one of the municipalities most under pressure from deforestation in the state.

Café Apuí Agroflorestal is an impact business incubated by Idesam with the goal of seeking new markets for coffee. The new investment will allow its business model to be scaled, expanding planted agroforestry areas, increasing the number of families benefiting from the project, and improving the quality of their coffee. As a result, they expect to expand their production to more than 600 hectares over the next 10 years.

“Receiving investments of this magnitude is a reason of great joy for us, and shows the seriousness of all the work done in Apuí. Our mission is to leverage agroforestry production in Amazonas and monitor how these contributions can make our dreams come true. We will be able to invest in new machinery and training to increase the product mix and reach new markets, such as the green coffee foreign market”, celebrates Jonatas Machado, commercial director of Amazônia Agroflorestal.

In production terms, this could represent reaching over 12,000 bags of agroforestry coffee per year — a growth of more than 5,000 percent compared to the 231 bags produced in 2021. The investment will also help to expand the product mix and reach new markets by strengthening its presence in e-commerce.

“One of IDESAM's biggest challenges is to enable the continuity and expansion of projects that show both technical and economic feasibility, but are unable to access capital and investment to gain scale. Being able to attract funds from private investors such as Mirova and Axcell is proof that we are on the right path, and we hope that other organizations may follow suit,” explains Mariano Cenamo, New Business director at IDESAM.

Business Scale — The investment round was led by Mirova Natural Capital, the company responsible for managing the Amazon Biodiversity Fund (ABF), a private impact investment fund launched in 2019 and managed by Brazilian fund manager Vox Capital. 

Designed in partnership with USAID/Brasil and the Alliance of Bioversity International and CIAT, it is registered as an Investment and Participation Fund (FIP), valid for 11 years, and expected to raise up to R$ 300 million in the period. Fund managers have structured 4 deals, and another 20 are being developed.

“We are delighted to be able to invest in this iconic, high-impact project. This project will bring knowledge to small producers in an important region for the development of an Amazon bioeconomy, and will connect them to coffee markets and environmental services. The project's potential is enormous, strengthened by a group of partners with extensive experience in Amazonas,” said Nick Oakes, Investment Director at the ABF Fund.

The other investor, Axcell, is a newly created impact accelerator based in Manaus and focused on Amazon impact businesses. “Our investment in Café Apuí is part of our strategy to invest in sustainable and impact ventures, which strengthen the entire production chain in Amazonas, with the company having excellent governance and maturity,” highlights Átila Denys, Axcell shareholder and impact business angel investor.

The contract with investors is based on carbon credit returns. It will also benefit coffee producers, who will receive a return for the conservation efforts they make in all forest areas within their properties. The carbon project is still under development, and the terms for sharing benefits for environmental services have not been signed with the producers. However, the carbon credits generated by the project are expected to result in even more economic development and forest conservation.

“It is a very innovative arrangement, and in addition to being an interesting solution, it recognizes the role played by producers in forest conservation. IDESAM, as a technical partner of the carbon project, is very pleased to offer even more incentives to its partners in the field,” explains Victoria Bastos, Climate Change coordinator at IDESAM.

Other Contracts — Since it was launched, the ABF has benefited another three Amazon-focused businesses. At the end of last year, the fund closed a deal with INOCAS Soluções em Meio Ambiente, a company that applies a new concept to the use of pastures by small producers. The goal is to plant 5,000 hectares of macaúba in a crop-livestock-forestry system.

In April 2021, the ABF signed the first two contracts for long-term capital with a positive impact on biodiversity. One of the contracts was signed with Manioca, a company that promotes food products from the Amazon; and the other with Horta da Terra, a producer of dehydrated non-conventional food plants (NCFPs, or PANCs, as they are known in Brazil).