Mirova

Document Summary: 

Organizational profile: Mirova is a conviction-based asset management firm dedicated to sustainable investment. As a pioneering impact-investing company, With more than €14 billion in assets under management, Mirova has become a European and international leader in sustainable finance. Although Mirova remains independent in all its decision making, the UN continues to play an important role through the Strategic Board. This governance body, which includes representatives of WWF, the UNFCCC and CBD, ensures that the Fund remains aligned with the SDGs, and it provides access to pipeline opportunities and expertise from its members.

Through Mirova's subsidiary Mirova Natural Capital, Mirova designs solutions for public and private investors willing to invest in nature-based solutions. Mirova's strategies are aimed at Financing projects that combine profit with purpose: ecosystem conservation, restoration and sustainable livelihoods for local communities. Mirova Natural Capital current has €396 million in assets under management, spread across 20+ investments. The sectors targeted include forests, land, and oceans.

The Land Degradation Neutrality (LDN) strategy within Mirova Natural Capital brings public and private capital together to provide long-term Financing to sustainable land-use projects that will reduce or reverse land degradation through sustainable agriculture, sustainable forestry and other land-use related sectors (AFOLU). The LDN Fund provides long-term debt and equity Financing for sustainable land use projects that reduce or reverse land degradation. It is structured as a blended finance fund, pooling resources from both public and private investors committed to the goal of stopping land degradation. The LDN Fund is designed to offer Financing solutions that are not readily available in the market, providing finance and strategic benefits in ways other investors or banks might not, e.g. longer tenors, longer grace periods, more flexible repayment schedules. The LDN initiative is a public-private vehicle managed by a private company, 

Through Althelia Funds, Mirova addresses the drivers of deforestation and unsustainable land-use. Through a focus on blended­ value investments that deliver the highest calibre social, environmental and economic performance, Althelia aims to demonstrate that financial performance can be fully aligned with sound environmental stewardship and social development. The climate strategy supports sustainable innovative agroforestry in buffer zones, and the restoration and protection of biodiversity and its habitats. It also enables the use of carbon credits from the protection of standing forest to support the development of livelihoods based on sustainable land use, and protection of ecosystems and the services they provide. 

The Althelia Biodiversity Fund Brazil aims to deploy R$400 (US$100) million of blended finance into sustainable activities that protect, restore or otherwise improve biodiversity and community livelihoods in the Legal Amazon of Brazil. The fund benefits from a partnership with the U.S. Agency for International Development (USAID), who helped co-design the fund, convene partners, and mitigated risk through a portfolio guarantee provided by USAID’s Development Credit Authority (DCA), and a partnership with the Center for Tropical Agriculture (CIAT), the fund's cornerstone investor.

In collaboration with the  UN Environment Programme, Rabobank, the Dutch foundation IDH, and the Dutch development bank FMO,  Mirova created the AGRI3 Fund 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. Mirova manages the finance portion of the AGRI3 Fund.

Financing Instrument: Debt (mezzanine, profit sharing loans) and equity (minority or majority position).

Project scale: For the LDN strategy:

- Long-term debt or equity Financing can be provided, for up to 15 years.
- Investment tickets are ideally between US$10m and US$30m.
- Interest rates / expected returns will be market-based, not concessional
- Repayment schedules can be flexible, with long grace periods if required.
- Investees must be private-sector entities.

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

Recipient countries/ regions/country groups: Global

Eligibility Criteria: Investments must meet impact and financial/risk criteria. Projects meet fit within the targeted theme of each investment fund, while producing financial returns. 

Application guidelines: If you have a project that meets the criteria presented in Mirova's guidance for project developers document, you are invited to send a summary, including key commercial and Environmental and Social information, as well as Financing needs, to ldn@mirova.com. All potential projects will be reviewed, and feedback provided. 

The investment process has five main steps.
1. Deal Sourcing
2. Preliminary analysis- This phase will focus on whether the project appears to meet the eligibility criteria.
3. In-depth analysis- In this stage there will be an in-depth analysis of all aspects of the project, including commercial, governance, risk, ESG, etc. A site visit will be carried out at this stage. 
4. Due diligence- Due diligence will be led by the LDN Fund investment team, including a site visit from both investment and E&S staff. Third party service providers will be engaged to assess specific aspects, such as land tenure or agronomy concerns. 
5. Contracting and Investment

The LDN Technical Assistance Facility (TAF) was established to help project developers get ready for investment, and link projects to the LDN Fund and LDN impacts. TA is essentially advisory, assistance or training that is provided to enable the investment transaction, reduce risk and increase development impact. The LDN TAF can provide grants and reimbursable grants to (potential) LDN Fund investment projects, to improve technical quality, and strengthen the environmental and social impact, so that the investment project meets the Fund investment criteria. The TAF is managed separately by the Dutch foundation IDH.

Publication Date
Monday, 19 April 2021
Applicable location
Africa
Americas
Asia
Europe
Oceania
Topic/Theme
Forest landscape restoration
Sustainable land use
Forest conservation and management
REDD+
Database
Financing opportunities