Responsible Commodities Facility (RCF)

proposed

The Responsible Commodities Facility (RCF)is a farmer financing program initially implemented in the 2022/2023 crops season, that promotes the responsible production and trade of Deforestation and Conversion-Free (DCF) soy in Brazil's Cerrado biome. Managed by Sustainable Investment Management Ltd. (SIM), the RCF offers lower-interest credit lines as a financial incentive to soy farmers committed to zero deforestation and no conversion of native vegetation.For the 2025/2026 season, the RCF plans to expand the program to US$200 million. IDB Invest aims to participate in this new funding round, contributing 12.5% of the total project cost through a 1-year bullet payment investment of up to US$25 million in the senior tranche, with US$10 million committed and up to US$15 million uncommitted credit lines.The program operates as a self-liquidating special purpose entity, providing loans to farmers for short-term crop financing. These loans are through Rural Product Certificates (CPRs) issued by farmers with pledges of crop or fiduciary liens as collateral, which serve as assets for the agribusiness receivables certificates (CRAs), like an ABS (Asset Backed Securities), issued by Opea Securitization company to fund the program. The CRAs are expected to be classified as Green Bonds.The specific objectives of the RCF 2025-2026 expansion include supporting approximately 500 farms with crop financing to produce 640,000 tons of DCF soy. The project will also conserve about 92,000 hectares of native vegetation, with at least 5% of excess native vegetation over the minimum required by local regulations, contributing significantly to environmental preservation. Additionally, it will help conserve over 38.9 Mt of CO₂ equivalent stocks on participating farms, further enhancing the program's positive climate impact