The fresh investment will help the sustainable agroforestry enterprise create further income-generating opportunities for smallholders in the mountain kingdom, while also arresting land degradation.
Mountain Hazelnuts (MH), a sustainable agroforestry social enterprise operating in Bhutan, has secured a $7.9m (€7.3m) equity investment from investors led by Mirova and Finnfund, which will be used to finance climate-resilient farming initiatives.
MH was established in 2009 by founders Teresa Law and Daniel Spitzer as a public-private-community partnership with Bhutan’s government to create a business generating income for vulnerable communities in Bhutan by planting 10 million hazelnut trees to restore degraded mountain slopes.
The company has been an important driver for Bhutan’s rural economy, providing hazelnut trees, agricultural inputs, and technical support to smallholder families and community groups to create further income-generating opportunities that also help to restore land.
Mirova, which is part of the Natixis group, has invested $3.9m in MH’s Singapore-registered holding company, while Finnfund has contributed $3m. The remainder of the $7.9m equity investment has come from MH’s management and founders, as well as an unnamed private investor. Mirova is now the largest shareholder in MH, followed, in descending size of holding, by management and founders combined, Finnfund, family office Ceniarth and the private investor.
The Mirova and Finnfund investments are backed by a guarantee from the EU’s European Fund for Sustainable Development Plus (EFSD+) under its Carbon Sinks programme which supports investments in forestry, agroforestry, carbon sinks ecosystems, and the blue economy.
While Mirova has been an investor in MH since 2020, this marks Finnfund’s first investment in the company.
Ilkka Norjamäki, associate director, head of Finnfund’s agribusiness and forestry portfolio, said the Helsinki-based development finance institution was confident the investment would catalyse further financing for sustainable, regenerative agriculture in Bhutan.
“We also appreciate the strong commitment that Mountain Hazelnuts has shown to increase share of women as farmers, community lead growers, employees and managers and look forward to supporting the company in reaching the agreed targets,” he said.
Funding certainty
MH said the investment meant its operations were fully funded for the next five years, allowing for the completion of climate adaptation grafting programmes, factory expansions and international certifications, such as Rainforest Alliance and Organic.
The company confirmed to Impact Investor that the funding would also allow it to strengthen its market position through investments in marketing and branding to help secure premium pricing for Bhutanese-grown hazelnuts internationally.
Sean Watson, Mountain Hazelnuts’ CEO, said the investment was indicative of the confidence Bhutan’s international partners had in the country’s potential to lead in sustainable agriculture.
“With this support, we can further empower rural communities, enhance climate resilience, and bring premium Bhutanese hazelnuts to global markets,” he said.
Previous financial support has come from, among others, the International Finance Corporation, Asian Development Bank (ADB), and the Global Agriculture and Food Security Program (GAFSP) via a blended finance package, Ceniarth and the UN-affiliated Land Degradation Neutrality Fund, which is managed by Mirova.
Bhutan, one of the world’s most climate-vulnerable countries, is currently working with international partners, including the EU and UN Food and Agriculture Organisation, on a wider programme to boost rural incomes though sustainable agriculture. Measures include the strengthening of high-value and export-oriented value chains, improving multi-stakeholder coordination and developing an enabling environment for investments and finance.
