The Rainforest Foundation UK, the Common Fund for Commodities and the Schmidt Family Foundation have launched a development impact bond to support indigenous livelihoods and protect rainforests. It will be implemented this summer and will finance a range of activities to benefit indigenous Asháninka families in the Peruvian Amazon, strengthening their livelihoods and enabling them to continue living in harmony with their forest environment.
The Rainforest Foundation UK (RFUK) is working with indigenous Asháninka families in the Ene River Valley to produce fine flavour cocoa for sale on the premium international market. This summer, RFUK will deliver a range of additional activities designed to boost cocoa quality thanks to $110,000 of initial financing provided through this prototype development impact bond. If successful, it will be scaled through additional financing.
Development impact bonds (DIBs) are a new type of development finance. They provide a means for investors to provide upfront funding for development programmes; investors are then remunerated by donors upon delivery of pre-agreed and verifiable results. This DIB is jointly financed by the Schmidt Family Foundation’s Mission Investing Portfolio and the Common Fund for Commodities.
‘The DIB will finance improvement in cocoa fermentation processes and increase the amount of cocoa supplied to the indigenous growers association,’ says Adam Colling of the Rainforest Foundation. ‘Increasing the quality and consistency of cocoa is vital to access the international fine flavour cocoa market, where higher prices can return higher incomes to Asháninka growers.’
The London-based NGO has worked in the Peruvian Amazon since 2008 and has secured government-approved rights to land and resources for indigenous Asháninka people. It is also working with investors and donors to develop new DIBs that deliver social, environmental and financial returns in the Congo Basin and Andean Amazon.