INSTRUMENT ANALYSIS SEPTEMBER 2021 AMAZONIA SUSTAINABLE SUPPLY CHAINS MECHANISM

The Amazônia Sustainable Supply Chains (AMSSC) Mechanism, proposed by Natura and Mauá Capital, aims to scale the bioeconomy in the Brazilian Amazon by addressing financing gaps for smallholder cooperatives. The instrument consists of a receivables fund that provides upfront payments based on off-take agreements and an Enabling Conditions Facility (ECF) for technical and community support. The pilot targets 3 million hectares of forest conservation by 2030, potentially avoiding 1.4 billion tons of CO2 emissions. It employs a blended finance structure with subordinated, senior, and potentially mezzanine tranches to de-risk investments and catalyze further corporate and philanthropic capital.

• The AMSSC mechanism consists of two primary components: a receivables fund (structured as a FIDC or Fiagro) that provides upfront payments to suppliers in exchange for receivables, and an Enabling Conditions Facility (ECF) that provides technical assistance and community investments in education, healthcare, and infrastructure.
• The pilot project aims to conserve three million hectares of the Brazilian Amazon by 2030, which is estimated to indirectly avoid 1.4 billion tons of CO2 emissions, representing approximately 2.7% of total annual global emissions.
• The mechanism targets the transition of 41,000 hectares of degraded or monocrop areas to agroforestry systems through Natura's SAF Dendê project, with the potential to sequester over 2 million tons of carbon in the soil alone.
• The instrument uses a blended finance structure where Natura acts as the initial off-taker and investor in the subordinated tranche to de-risk the fund for other investors. Two modeling scenarios were considered: a two-tranche fund (30% subordinated, 70% senior) and a three-tranche fund (20% subordinated, 10% mezzanine, 70% senior).
• The pilot will initially operate as a USD 50 million fund targeting at least 34 cooperatives in the Amazon region, focusing on bioingredients such as andiroba, cupuaçu, murumuru, ucuúbu, babaçu, tucumã, and maracujá.
• The mechanism addresses critical barriers to the Amazonian bioeconomy, including the limited capacity of banks to originate deals with forest-compatible suppliers and the high bureaucratic burden of federal subsidized credit lines like Pronaf.

APA

Climate Policy Initiative (2021). INSTRUMENT ANALYSIS SEPTEMBER 2021 AMAZONIA SUSTAINABLE SUPPLY CHAINS MECHANISM. https://www.climatepolicyinitiative.org/wp-content/uploads/2021/10/Amazonia-Sustainable-Supply-Chains-Mechanism_Instrument-Analysis.pdf

Chicago

Climate Policy Initiative. INSTRUMENT ANALYSIS SEPTEMBER 2021 AMAZONIA SUSTAINABLE SUPPLY CHAINS MECHANISM. 2021. https://www.climatepolicyinitiative.org/wp-content/uploads/2021/10/Amazonia-Sustainable-Supply-Chains-Mechanism_Instrument-Analysis.pdf.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=INSTRUMENT ANALYSIS SEPTEMBER 2021 AMAZONIA SUSTAINABLE SUPPLY CHAINS MECHANISM |date=September 2021 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2021/10/Amazonia-Sustainable-Supply-Chains-Mechanism_Instrument-Analysis.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2021instrument, author = {{Climate Policy Initiative}}, title = {{INSTRUMENT ANALYSIS SEPTEMBER 2021 AMAZONIA SUSTAINABLE SUPPLY CHAINS MECHANISM}}, institution = {Climate Policy Initiative}, year = {2021}, month = sep, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2021/10/Amazonia-Sustainable-Supply-Chains-Mechanism_Instrument-Analysis.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }