Santander, BNDES back Mombak reforestation, drawing on Brazil climate fund

By Gabriel Araujo

SAO PAULO (Reuters) -Reforestation startup Mombak has secured 100 cardinal reais ($17.8 million) successful a woody with Santander Brasil and Brazilian improvement slope BNDES, it said connected Monday, eyeing accelerated maturation successful the c removal market.

Mombak, which buys degraded onshore from farmers and ranchers oregon partners with them to replant autochthonal taxon successful the Amazon rainforest, volition beryllium the archetypal to money a reforestation task with the backing of the Brazil's "New Climate Fund".

Brazil's authorities launched the 10 billion-real inaugural successful 2023 to concern climate-related projects. Santander is serving arsenic fiscal intermediary for the deal, underscoring increasing involvement from backstage lenders successful the nascent sector.

BNDES had offered a recognition enactment for up to 160 cardinal reais to Mombak successful August, but the startup needed a fiscal cause providing required guarantees to entree the capital.

"There is simply a situation betwixt getting this support and really being capable to usage the capital. We are reaching a precise important milestone," Mombak co-founder Gabriel Silva said successful an interview.

Mombak presently has 45,000 acres nether management, an country 3 times the size of Manhattan, and by June expects to person planted 8 cardinal trees successful the world's largest rainforest.

By turning degraded onshore into forests, the institution is moving to make "carbon credits" that companies tin bargain to offset their greenhouse state emissions.

Mombak, which has deals with buyers specified arsenic Microsoft, Google and McLaren, has inked $150 cardinal worthy of c removal offtake contracts - a fig it expects to triple oregon quadruple this year, CEO Peter Fernandez said.

Some firms successful Brazil's nascent c marketplace person complained of trouble getting loans to trim superior costs and concern operations, arsenic galore investors inactive spot it arsenic risky.

BNDES manager Tereza Campello said the Mombak woody should acceptable a precedent helping to easiness immoderate of those concerns. The slope sees Brazil, location to astir 60% of the Amazon rainforest, arsenic good positioned to beryllium a starring subordinate successful c offset markets.

"This is the relation of a improvement bank. We are taking the initiative," Campello said successful an interview. "This woody shows the marketplace is viable and that not lone BNDES believes successful it, but different fiscal institutions too."

Santander sustainability caput Leonardo Fleck said caller backing reflected an progressively established marketplace successful Brazil.

"Capital is flowing, companies are planting and getting offtake contracts with ample planetary firms. I spot it a batch similar a puzzle - you commencement to acceptable the pieces together."