01 / Cattle production

HACIENDA SAN JOSÉ (HSJ)

&Green’s financing will be used by HSJ to sustainably scale up their operations in the Vichada province of Colombia, ultimately impacting up to 180,000 hectares by the end of the loan tenor. The project objectives include protecting and restoring forest; fostering social inclusion through knowledge sharing, employment creation and community engagement; and sharing data and learnings to encourage positive change in the cattle industry.
This is Colombia, in green are the Vichada and Meta regions, where HSJ will expand its operations

Project summary

Country Colombia
Jurisdiction Colombia
Investee company Agropecuaria Bambusa S.A.S (Hacienda San José (“HSJ”))
Supply chain Cattle Production
Total &Green investment COP 30 billion (approx. USD 7.7 million)
Effective Date 31 December 2021
Loan Terms 12-year tenor
Co-investors Through the sale of cow-calf farms to local and international investors, HSJ will raise an additional USD 240 million over the period of the &Green’s investment.
02 / blended finance

INVESTMENT RATIONALE

&Green’s investment in HSJ will help transform the Colombian cattle sector from a low quality, inefficient sector associated with deforestation in the Amazon rainforest, to a sustainable, inclusive, deforestation-free and efficient supply chain that produces high-quality beef.

HSJ intends to expand to have influence over approximately 180,000 hectares of sustainably managed livestock farming at the end of &Green’s loan period, which will include more than 13,000 hectares of forest conservation, as well as material gallery forests; but more importantly, will set the bar for the expansion of sustainable livestock management in Colombia.

HSJ’s commitments have been detailed in two documents: the Landscape Protection Plan (“LPP”) and the Environmental and Social Action Plan (“ESAP”). Through these public documents, HSJ is committed to the protection and restoration of up to 27,000 hectares of tropical forest in Colombia’s underdeveloped Orinoquía region at the end of the loan tenor. As &green’s first investment in Colombia, this transaction sends a message about supporting players that operate beyond “Business-as-Usual” from a production and protection perspective.

03 / the action plan

ENVIRONMENTAL RETURN & SOCIAL INCLUSION

HSJ is committed to meeting the highest sustainability standards throughout their supply chain. This includes a commitment to ensure No Deforestation, No development of Peatlands, and No Exploitation (NDPE) within any of their operations and supply chains.

The Environmental Return and Social Inclusion targets HSJ has committed to reflect the expected impact on forest, cattle production and social inclusion, and are described in the LPP and detailed in the ESAP; these are the key documents which &Green uses to work towards transformational impact with HSJ.

ENVIRONMENTAL RETURN

Conservation and restoration are key component in HSJ’s sustainable intensification model, and an integral part of &Green’s Theory of Change.

The business intends to expand to have influence of around 180,000 hectares of sustainably managed livestock farming at the end of &Green’s loan period, which will include conservation and restoration of up to 27,000 hectares (ha) of natural forest and adjacent buffer zones. In general, these are gallery forests flanking upland spring catchments, which serve as buffer zones for riverine ecosystems, and as biodiversity corridors for local wildlife.

Regenerative agricultural practices applied by HSJ ensure enhanced soil biodiversity, soil fertility and below-ground carbon capture. Their no-fire policy further optimized soil health and reduces GHG emissions significantly.

These benefits accrue most directly to properties that HSJ manages, but also result in reduction of risks and positive impacts on biodiversity, soil and water in areas outside their direct influence.

Environmental Targets:
Forest conservation                   13,500 ha
Agricultural intensification       180,000 ha
Forest restoration                      13,500 ha

04 / biodiversity conservation

ENVIRONMENTAL & SOCIAL RISK ASSESSMENT

An ESG review will be undertaken annually by an external expert, selected in consultation with &Green. This review includes a full IFC PS compliance update, progress updates on impact targets and other action items of the Environmental and Social Action Plan (ESAP). A different reviewer will be selected every 3 years to ensure continued objectivity. HSJ will have their own internal monitoring framework to track their progress against the ESAP items and will report their updates annually to &Green.

To guide the expansion of HSJ’s operations, a team of experts also developed a tailored Land Acquisition Tool (LAT) that allows HSJ to do a structured assessment of each new plot of land prior to acquisition. The LAT is composed of two sections; a Go/No Go analysis, focusing on critical conditions and a viability analysis, assessing the inputs needed to ensure all impact and compliance obligations are met. The LAT is developed in accordance with the IFC Performance Standards and the Aval GANSO standard for sustainable cattle management.