mobilizing capital to scale responsible expansion of crop livestock in brazil

BOSTON CONSULTING GROUP 25 Call to action: USD 2B of catalytic capital by 2030 The ambitious objective of investing USD 120 billion to restore degraded pastures calls for prompt and strategic intervention. The first step is to build a solid track record of financings through blended finance, paving the way for further purely-private financings. Our call to action is to reach USD 2B of catalytic capital, with subordinated position at affordable rates, by 2030. Considering a leverage between 1:2 and 1:4, where USD 1 of catalytic capital mobilizes from USD 2 to USD 4 from other commercial financial sources, this strategy shall lead to USD 6 to USD 10 billion in innovative financial products, with the purpose of further unlocking the private flows to bridge the USD 120B gap. To make this happen, a collective effort is required: Producers: They are at the center of this agenda as they will be the ones implementing the agricultural transition in practice. Therefore, understanding their needs, capabilities, and asks is the foundation for a successful transition. DFIs: They shall have an instrumental role in providing this catalytic capital, as they have the financial strength to provide it at this scale. Companies of the supply chain: Engaging with producers to promote good practices and help build a pipeline of transactions. To a lesser extent, they can also take some limited participation in risk in some pilot financing. Private banks: Participating as commercial capital in the new financial mechanisms. Their proximity and knowledge of the producers make them make them natural partners for this agenda. Taking some limited participations as well in subordinated tranches, as part of their innovation effort, will also be welcomed as it would stimulate other catalytic capital providers to enter. Private investors in capital market: Their participation as commercial capital will be key to scaling the agenda to its full potential. Indigenous People and Local Communities: People living in the areas of expansion on degraded pastures shall always be associated with the decision-making process. Brazilian Government: The participation of the government will be an essential factor for the success of this agenda. It shall have a role in implementing public policies to support the agenda and conducting a thorough socio-environmental risk mapping at the scale of the Brazilian territory to orient and monitor the expansion in a responsible manner, hence maximizing all aspects of the socio-environmental benefits alongside economic development.