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Private equity invests $20M in Amazon reforestation

Rescuing the Amazon from logging, ranching and climate change has captured the hearts of activists around the world. It’s also opened the wallets of capitalists.

Why it matters: The Amazon’s survival is pegged to critical, and expensive, reforestation efforts that would restore a vital carbon sink and ecosystem.

  • Firms like re.green are among the companies pooling money aimed at revitalizing rainforests, and making investment returns in the process.

What’s happening: Re.green says it has raised $76.8 million from four investors to invest in Brazil’s Amazon and Atlantic rainforests.

  • The company aims to reforest 1 million hectares over the next 12 years, and to ultimately fund the effort through the sale of carbon credits.
  • It’s bought an initial 3,000 hectares — or about 11.5 square miles — of land in Bahia, where it plans to spread 1,600 seedlings of native plants per acre.

Zoom out: Lanx Capital and its private equity arm, Principia, led the Series A funding round in March.

Zoom out: Terraformation and DroneSeed, startups based in Hawaii and Seattle, respectively, are among the dozen or so companies that have attracted investor backing for reforestation.

Yes, but: The Amazon, due to deforestation, is now believed to emit more CO2 than it absorbs.

  • Meanwhile, a credit or offset can overstate the amount of carbon a tree captures, especially if it doesn’t adjust for the limited amount of carbon that a younger tree can absorb.

What they’re saying: Re.green says that it’s taken those factors into account, and that the buyers who have purchased credits already have effectively paid in advance.

  • “Ecological restoration, which is the most demanding type of bringing back nature, that’s what we’re doing,” co-CEO Bernardo Strassburg tells Axios.

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