Nine countries have backed the Brazil-led RAIZ accelerator that aims to galvanise public and private sector investment for the restoration of degraded farmland.
Last week, nine countries announced they would back the launch of the ‘Resilient Agriculture Investment for Net-Zero Land Degradation’ (RAIZ) accelerator that will assist participating governments to unlock and strategically allocate public and private investment for the restoration of degraded agricultural land at scale.
The announcement was made at a ministerial meeting at the COP30 climate summit in Belém, where the Brazil-led initiative received the support of the governments of Australia, Canada, Germany, Japan, the Kingdom of Saudi Arabia, New Zealand, Norway, Peru and the UK.
The accelerator, which is modelled on the Green Way and Eco Invest initiative in Brazil, aims to address the widescale degradation of the world’s farmland to strengthen food security, tackle climate breakdown, and protect biodiversity.
It is designed as a technical assistance facility to help governments and financial partners co-design tailored financing solutions at national level and will be hosted by the Brazilian Ministry of Agriculture and Livestock (MAPA) in partnership with several international organisations, including the Food and Land Use Coalition (FOLU).
Morgan Gillespy, executive director of FOLU, told Impact Investor that RAIZ will support countries that express interest in receiving the RAIZ service offering.
“We will continue to liaise with interested countries and directly engage those with significant rates of farmland degradation and potential for restoration to explore opportunities for collaboration,” he said, explaining that the objective is to support six countries, representing around 30% of degraded farmland, by 2030.
Asked by this publication whether the initiative was a positive signal for impact investors, Agustín Vitórica, co-founder and co-CEO of GAWA Capital, the Madrid-based impact investor, said: “An initiative like RAIZ sends a strong signal to the impact investing market that restoring degraded agricultural land is now a political priority and a compelling opportunity for impact investors, rather than a niche topic.”
Paul McMahon, managing partner at natural real assets investor SLM Partners, also welcomed the initiative but told Impact Investor that the challenge will be in seeing how this type of high-level, inter-governmental initiative translates into action on the ground.
“There is often a big gap between the noble aspirations of UN conventions and the realities of farming and land use across the world,” he said.
Financing gap
According to the Food and Agriculture Organisation (FAO), over 20% of the world’s agricultural land, around 1 billion hectares, is currently degraded. The reduced productivity and resilience of degraded soils is said to contribute to food insecurity and leads to the expansion of farmland into natural ecosystems, causing widespread land degradation, including deforestation. The FAO says that reversing just 10% of cropland degradation could restore 44 million tonnes of annual food production and meet the nutritional requirements of 154 million people.
To address these challenges requires both public and private sector investment, with one estimate putting the financing gap for the restoration of farmland at $105bn.
Key stakeholders behind the RAIZ initiative say the private sector could invest up to $90bn in on-farm nature based solutions, but struggles to mobilise funds due to high upfront costs, long payback timelines and variable returns. They see governments as having a critical role to play in de-risking private capital and have called on governments and investors to work together to co-design and launch tailored national mechanisms for farmland restoration.
Development banks, private investors and philanthropic partners are also highlighted as key players in unlocking solutions that bring finance to farmers and restore the world’s productive farmlands.
Gillespy underscored the importance of a diversity of financial actors to scale funding for farmland restoration, given the different risk and return profiles of investments.
“Impact investors are one such actor and can play a crucial role in funding farmland restoration efforts that are at an early stage or have lower financial returns but deliver high social and environmental value,” he said, adding that the relevance of impact investors within RAIZ will depend on the country of interest, the prioritised areas for restoration and their risk and return profile.
“However, it should be noted that the ambition of RAIZ is a wider systems change approach to redirecting financial flows, where public funds align with private investment and impact funds to deliver solutions at scale. Impact investors can provide catalytic capital that supports farmers in the short term, while helping unlock larger flows of public and private finance in the longer term,” he added.
Technical assistance
The technical assistance provided by RAIZ will help governments to map degraded landscapes to prioritise areas for investment; identify investable restoration solutions and assess the financing needs; design optimal co-investment mechanisms and scale proven solutions; and foster collaboration and knowledge exchange within the ecosystem.
Responding to questions from Impact Investor, Gautier Queru, managing director at sustainable investment manager Mirova, commented: “RAIZ’s focus on mapping degraded landscapes, identifying investable solutions, and designing co-investment mechanisms aligns perfectly with the challenges we face in scaling regenerative agriculture.”
Queru said that RAIZ is a major step forward, but ambition must match urgency and that beyond technical assistance, there was a need for strong policy signals and regulatory frameworks that incentivise nature-based solutions and penalise practices that degrade land.
“Governments should prioritise blended finance structures that leverage public funds to de-risk private capital, as well as robust monitoring systems to ensure integrity and impact. International organizations can help by harmonising standards for restoration outcomes and scaling biodiversity credits alongside carbon markets,” he said.
“We must integrate the value of nature into the economy, not to financialize the commons, but to prevent its destruction,” he added.
