IDH, The Sustainable Trade Initiative

Document Summary: 

Organizational profile: IDH, The Sustainable Trade Initiative, is supported and endorsed by multiple European governments, including institutional donors: BUZA (The Netherlands) SECO (Switzerland) and DANIDA (Denmark). Other donors and funders are (e.g.) NICFI (Norway). DFID (UK), USAID (US), Rockefeller, and the Bill & Melinda Gates Foundation. IDH’s mission is built upon three core values: convening, co-financing and learning & innovating. They convene public-private partnerships to jointly set ambitious targets and formulate co-investment plans that unlock scaling of sustainable production & trade to deliver large scale impact on the Sustainable Development Goals.

The IDH Tropical Timber program promotes the use of sustainable tropical timber. IDH focuses on 3 main targets: to increase the uptake of Sustainable Forest Management timber products by 150,000 m3, to support the development of economically viable and sustainably managed forests via effective public private platforms, and to develop a direct sourcing connection between end-buyers and producing regions.

The IDH  IDH Landscape program uses an innovative, integrated approach to sustainable natural management. It also works towards preventing deforestation, improving smallholder and community livelihoods, and ensuring supply security for businesses.  IDH supports this through co-funding scalable joint activities and projects to sustainably manage the landscapes, based on well researched proofs of concept.

In collaboration with the  UN Environment Programme, Rabobank, Mirova, and the Dutch development bank FMO,  The AGRI3 Fund was created to catalyze private financial resources or forest protection and sustainable agriculture, with the aim of unlocking at least USD 1 billion in finance towards deforestation-free, sustainable agriculture and land use. The Fund is a public-private partnership with a related layered financing structure. IDH manages the Technical Assistance Facility of the AGRI3 Fund.

Financing Instrument: Debt (first loss loan, subordinated loan)

Project scale: In 2019, IDH contributed €434,257 within the tropical timber program and €9,086,269 within the landscapes program. Information on individual project scale is not currently available. 

The AGRI3 Fund targets investments in the USD 2 – 15 million range.

Recipient countries/regions/country groups: Global

Eligibility Criteria: A  strict rule is that companies need to cover at least 50% of the costs. IDH only co-funds innovative approaches that have a strong social and environmental added value: they don’t fund business as usual and their investments must stretch the public good agenda of companies. Co-funding programs and projects trigger other investors to step in.

Within the tropical forest and agriculture focused fund, projects will typically be required to protect 4 ha of forest for every 1 ha of production land, equating to over 5 million hectares of tropical forest under protection.  The Fund expects to provide mainly long-term (5-15 years) debt.

Application guidelines: IDH occasionally announces calls for proposals in the news section of their website. See https://www.idhsustainabletrade.com/?s=call+for+proposals

Publication Date
Thursday, 01 April 2021
Applicable location
Africa
Americas
Asia
Europe
Oceania
Topic/Theme
Sustainable land use
Forest conservation and management
Database
Financing opportunities