In a first for agtech, Solinftec secures $27m climate bond funding

Disclosure: AFN’s parent company, AgFunder, is an investor in Solinftec.

Brazilian farm management platform Solinftec has raised 140 million reals ($26.6 million) in the form of a Green Agribusiness Receivables Certificate (CRA-Green). CRAs are fixed income instruments which allow businesses in the agrifood sector to securitize the payments they are owed by their customers. The CRA-Green is a version overseen and certified by the global Climate Bonds Initiative (CBI).

Solinftec said in a statement that it will use the funds to improve and develop its precision agriculture technologies “with a focus on mitigation, adaptation, and resilience to climate change.”

It continued, “the funds raised will be used for environmental projects that fall into the categories of environmental management of living natural resources and land use, adaptation to climate change and eco-efficiency, pollution control and prevention, renewable energy, and water management.”

The financing was led and structured by Itaú BBA — the corporate investment arm of Brazilian financial services giant Banco Itaú Unibanco — and Planeta Securitizadora Agro, an affiliate of Grupo Gaia.

“This ‘green bond’ represents Solinftec’s commitment to making the use of cutting-edge technology accessible to all agricultural producers, so that food production is increasingly sustainable. By exploring new technological frontiers, we are helping change the way food is produced around the world,” said Britaldo Hernandez, CEO at the Araçatuba, São Paulo-based startup.

Renato Barros Frascino, director oat Planeta Securitizadora Agro, said the firm was “very happy” because the Green CRA “is in line with our purpose: it shows that a small investment in technology can generate a very positive impact on the environment, by optimizing the application of inputs and reducing diesel consumption.”

Solinftec said the process of securing the CRA-Green began at the start of this year. It followed the announcement of the startup’s first CRA in February 2020, which was also structured and led by Itaú BBA and Gaia and saw it secure 80 million reals ($18.6 million) of funding.

According to Solinftec, its tech platform has allowed its customers to avoid over 680,000 tons of carbon dioxide emissions over the past five years. The benefit of this reduction is about the same as planting 30 million trees or electrifying 700,000 cars each year, the startup suggested.

This allows “rural producers [to] be more sustainable, using less inputs, reducing costs, and increasing productivity in real time,” it said.

Solinftec claims it is the first agricultural products and services company in the world to receive CBI certification. Since it is issued in accordance with CBI standards, the CRA-Green is considered a ‘Certified Climate Bond’. The startup said that during the bond application process it received ESG advice from Itaú BBA with SITAWI Finanças do Bem, which is a CBI-accredited company, acting as external evaluator and verifier.

“The issue of Solinftec’s CRA-Green confirms that green financing is a reality for agribusiness,” said Leisa Souza, head for Latin America and the Caribbean at the CBI.

“This is the second operation certified under the Climate Bonds Standard Agriculture Criteria, and is a great example of how agribusiness has the potential to boost the Brazilian economy in a resilient way.”

Solinftec also received the International Certification of Sustainability and Environmental Responsibility from Control Union Certifications in March 2020.

Comment? News tip? Story idea? Email me at [email protected] or find me on LinkedIn and Twitter