INSTRUMENT ANALYSIS SEPTEMBER 2021 AMAZONIA SUSTAINABLE SUPPLY CHAINS MECHANISM

The Amazônia Sustainable Supply Chains (AMSSC) Mechanism is a blended finance instrument designed to scale the bioeconomy in the Brazilian Amazon. Proposed by Natura and Mauá Capital, it combines a receivables fund to provide upfront financing to smallholder cooperatives with an Enabling Conditions Facility (ECF) that provides technical assistance and community infrastructure investments. The mechanism aims to reduce deforestation pressure by strengthening value chains for non-timber, forest-compatible products.

• 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). The ECF provides technical assistance to cooperatives and investments in community infrastructure, such as education, healthcare, and internet access, to overcome socio-economic barriers.
• The instrument's pilot phase is designed as a USD 50 million fund targeting at least 34 cooperatives in the Amazon region. It focuses on bioingredients such as andiroba, cupuaçu, murumuru, ucuúba, babaçu, tucumã, and maracujá, with a goal to expand from 39 to 55 forest-compatible bioingredients.
• The mechanism 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.
• A specific component of the pilot, the SAF Dendê project, aims to transition 41,000 hectares of degraded or monocrop land to agroforestry systems by 2030. This transition is expected to sequester over 2 million tons of carbon in the soil alone, compared to 1.2 million tons under a business-as-usual scenario.
• The AMSSC addresses critical financing barriers for Amazonian cooperatives, such as the limited capacity of banks to originate deals with forest-compatible suppliers and the high bureaucracy of federal credit lines like Pronaf. It provides a direct market link through the off-taker and offers upfront payments, which are rarely available in existing financial products for these cooperatives.
• The financial structure utilizes a blended approach with different tranches to manage risk. In one modeled scenario, the fund includes a subordinated tranche (20%), a mezzanine tranche (10%) for concessional capital, and a senior tranche (70%), with the off-taker participating in the subordinated tranche to de-risk the instrument for other investors.

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} }