Terra Bella Colombia Fund

Investment Strategy

The Terra Bella Colombia Fund is designed to mobilize private equity investments to finance smallholder agriculture, non-timber forest products, and climate change mitigation in Colombia. The Fund utilizes an innovative public-private partnership structure, combining anchor investments from USAID/Colombia with private funds to deliver Colombia’s first investment fund dedicated to smallholders.

The Fund aims to generate long-term returns for investors while delivering measureable environmental and social benefits.  The fund’s investments target the production-end of value chains, focusing on the stages that are managed directly by the smallholder producers – enabling transformation to sustainable landscape management and increased rural incomes. The Fund also seeks to generate financial returns through the sale of emission reductions that are generated from avoiding deforestation, promoting reforestation, and adopting climate-smart agriculture.

The Fund contributes to rural development, especially in post-conflict areas of Colombia, through generating alternative income opportunities for smallholders, including Afro Colombians, Indigenous and other community groups and cooperatives. The Fund has the support of USAID and has strategic alliances with national and international entities that strengthen the processes of selection, evaluation and implementation of investments.

Linked Technical Assistance Facility

In order to support the Fund’s projects, a Technical Assistance Facility has been established to “bridge the gap” that smallholders face in achieving readiness to access investment capital. The Fund will leverage Terra’s experienced international and local portfolio management team to identify and deliver the support required to make projects bankable. This technical assistance facility is awarded to eligible projects after close evaluation and determination by the Fund’s portfolio management team.

Generating Financial, Social, and Environmental Returns

The Terra Bella Colombia Fund is the only fund that combines investments in smallholder’s production of sustainable agricultural crops and non-timber forest products that also reduce greenhouse gas emissions through reduced deforestation, increased tree cover, and climate smart agriculture.  Investing in projects with multiple revenue streams provides greater diversification of financial returns. The Fund delivers far-reaching social benefits, developing livelihoods and alternative incomes from sustainable landscape management through providing access to inputs, technical assistance, quality processing, expanded market links, and certifications. Furthermore, formalizing investments to local smallholders strengthens local land tenure rights.

Fund Manager’s Comparative Advantage

The Fund’s manager, Terra Global Investment Management, was founded in 2006. In the past decade Terra has become a world leader in agriculture, forestry, and land-use emissions reductions program development. Terra employs an exceptionally inter-disciplinary, multi-location team to implement market-based solutions to rural development and environmental stewardship.  With experts in finance, forestry, agriculture and offices in Bogota, Guatemala City, Washington D.C., and headquarters in San Francisco, Terra is positioned to be a highly effective Fund manager for this smallholder agroforestry-focused climate change mitigation private equity fund.