• The project seeks to promote sustainability and low-carbon practices in palm oil production.
• IDB Invest supports innovative projects in this sector, combining blended finance and climate advice. 

IDB Invest granted a total financing of US$15 million through three mezzanine loans of US$5 million each to Prolade S.A.P.I. de C.V. (Prolade), a Mexican company producing sustainable palm oil, certified under the highest standard of the Roundtable on Sustainable Palm Oil (RSPO). The signing ceremony took place in Mexico City. It was attended by Ilan Goldfajn, President of IDB, Luis Tejado, Chief Executive Officer of Prolade, as well as representatives from the Canadian Climate Fund for the Private Sector of the Americas (C2F) and the Finland-LAC Climate Fund (FINLAC).

The project aims to promote sustainability and low-carbon practices in palm oil production, increase productivity, and benefit employees and suppliers from low-income rural areas in southern Mexico.

The financing will allow Prolade to acquire land, develop biological assets, and expand its oil extraction plant. The loan terms are tailored to the company's cash flows and industry dynamics. Additionally, the blended financing incorporates financial incentives based on the company's performance and is designed to support Prolade in adopting low-carbon agricultural practices. These include generating carbon removal credits following investment in and production of biochar, being the first palm oil project in Latin America to do so, and cogenerating energy from industrial waste.

The financing includes a loan provided by IDB Invest and the other two from blended financing, one by the Canadian Climate Fund for the Private Sector of the Americas (C2F) and the other by the Finland-LAC Climate Fund (FINLAC).

Mexico, the second-largest economy in Latin America, has a high potential for sustainable palm oil cultivation. Despite this crop's global environmental and social challenges, the region has demonstrated a more sustainable model by leveraging degraded lands for its expansion. In Mexico, the sector's productivity, dominated by small farmers, remains low compared to international levels.

Companies like Prolade, certified by the RSPO, lead the way towards sustainable production, leveraging the high efficiency of palm oil compared to other oilseeds. Prolade converts previously deforested lands used for cattle ranching in southeastern Mexico into perennial palm plantations. These plantations will produce high-quality, sustainable palm oil certified by the RSPO for the Mexican national market.

With technical advice from IDB Invest, Prolade developed an Environmental and Social Action Plan (PAAS) that includes biodiversity analysis, land acquisition procedures, community relations management, and pollution control improvements. Additionally, the project includes an innovative program for using biochar as a soil enhancer and a Corporate Governance Action Plan to formalize Prolade's decision-making process, improve risk management, and increase transparency.

IDB Invest supports innovative projects in this sector, combining blended financing and climate advisory to demonstrate that promoting sustainable agricultural practices can generate high economic, social, and environmental impact, attracting new investments in the region.

The operation is expected to contribute to the following United Nations Sustainable Development Goals (SDGs): Decent Work and Economic Growth (SDG 8), Responsible Consumption and Production (SDG 12), and Climate Action (SDG 13).

About IDB Invest

IDB Invest is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social, and environmental development in the region. With a portfolio of US$21 billion in managed assets and 394 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that respond to the needs of its clients in various sectors. Visit our website idbinvest.org.

About Prolade

Prolade S.A.P.I. de C.V. (Prolade) is a Mexican company committed to the sustainable production of palm oil, leading the way as the only one in the country certified with the RSPO IP (Identity Preserved) standard, the highest level of traceability and sustainability. Since its inception, Prolade has focused its efforts on soil regeneration, responsible agricultural development, and the creation of premium products such as superior quality crude palm oil (CPO), positioning itself as a reference in the global market. With a firm commitment to innovation, quality, and the environment, Prolade continues to consolidate its leadership in the agro-industry on the way to the ultimate goal: transforming the palm oil production paradigm in Mexico towards regenerative agriculture.

About the Canadian Climate Fund for the Private Sector of the Americas (C2F)

The Canadian Climate Fund aims to catalyze greater private investment in climate change mitigation and adaptation projects in Latin America and the Caribbean, offering concessional financing to projects that do not benefit from sovereign guarantees and paying particular attention to the poorest and most vulnerable countries. The primary investment areas are renewable energy generation and storage technologies, energy efficiency, sustainable transport, and greenhouse gas reduction projects, including reforestation, sustainable agriculture, improved land use, and supporting adaptation to climate change vulnerability. The resources have a cross-cutting mandate to invest in promoting gender equality.

About the Finland-LAC Climate Fund

The Finland-LAC Climate Fund is a trust fund supported by the government of Finland with the aim of catalyzing greater private investment in climate change adaptation and mitigation in Latin America and the Caribbean, with a focus on poor and vulnerable countries and communities, gender equality, diversity, inclusion, and biodiversity.

About RSPO

The Roundtable on Sustainable Palm Oil (RSPO) is a global association to make palm oil sustainable. Formed in 2004, the RSPO is a multi-stakeholder non-profit organization that brings together members from across the palm oil value chain, including palm oil producers, processors, traders, consumer goods manufacturers, retailers, banks, investors, environmental or nature conservation non-governmental organizations (NGOs), and social or development NGOs. As an association for progress and positive impact, the RSPO facilitates global change to make palm oil production and consumption sustainable. To inspire change, we communicate environmental and social benefits. To advance, we catalyze collaboration. To provide security, we establish certification standards. The RSPO is registered as an international association in Zurich, Switzerland, with main offices in Malaysia and Indonesia, and offices in China, Colombia, the Netherlands, the United Kingdom, and the United States.