Impact Fund Denmark invests DKK 130 million (USD 20 million) in The Reforestation Fund (TRF), a forest fund that restores former rainforest areas in South America. The fund is expected to raise more than DKK 7.8 billion (USD 1.24 billion). It is the largest afforestation fund ever in South America.
Restoring land at scale
About 75% of deforestation in South America is due to increased cattle production. Areas for cattle are spreading at the expense of the rainforest, leading to loss of biodiversity, release of stored CO2 and destruction of local ecosystems. The investment targets the state of Mato Grosso do Sul in Brazil, with around 19 million cattle, representing almost 8% of the national population.
The fund buys land where cattle have grazed and plants forest instead. In full scale, the strategy aims to restore and replant about 267,000 hectares. Half, approximately 133,500 hectares, are reserved for the protection and restoration of native forests and natural habitats. The other half is planted with millions of trees as sustainably driven commercial forest production, generating ongoing revenue from timber and verified carbon credits. There is already demand for the credits from major tech companies, among others.
Returns aligned with climate and biodiversity
The fund expects to sequester 36 million tonnes of CO2 over 17 years of operation, corresponding to Denmark’s total annual CO2 emissions.
This is an investment where attractive returns and nature restoration go hand in hand. When land is revitalised as forest, long-term income is generated from sustainable timber and climate credits from CO2 storage, while nature is given room to return. This is exactly the kind of investment we want to support. Where capital works for returns as well as climate and biodiversity.
At the same time, the project is expected to create 2,700 local jobs per year.
Behind the fund is Timberland Investment Group, part of BTG Pactual and among the world’s largest forest investment managers, which gives the investment considerable industrial and financial weight.
This project benefits from EDFI Carbon Sinks, a guarantee managed by EDFI Management Company and funded by the European Union under the EFSD+ programme, as part of the EU’s Global Gateway strategy. EFSD+ (European Fund for Sustainable Development Plus) is a key instrument within the EU investment framework designed to mobilise private sector financing for sustainable development in partner countries.
External Communications Director
Thøger Kirk
+45 53 76 08 05
