Amazonia Impact Ventures is a private impact investment firm. It provides sustainable financial returns and investments that have a genuine impact on the ground. We had a chance to chat with one of the Co-founders Pajani Singah, to learn more about the firm.
The story of Amazonia Impact Ventures
What could be the best way to support local communities in developing areas of the world? Donations and charities might be a good short-term solution, but will they work in the long term?
According to Pajani Singah, entrepreneurs could have a much larger impact if working in a collaborative way with local entrepreneurs and that is exactly what Amazonia Impact Ventures does. In our chat with him, we had a chance to learn more about the journey of building an impact investing firm.
The turning point was when Pajani attended a course on Social Finance at Oxford University’s Saïd Business School. After fifteen years in the Financial markets, he was on the search for how he can make an impact to address climate change by using finance and business.
Two other experts that attended the same course joined along with him and they launched Amazonia Impact Ventures as co-founders: Aldo Soto, who has several years of experience working with local communities in the Amazon area, and Carla Koffel, a lawyer by background with vast experience on development finance and impact, helped established the organization.
Pajani decided to take this step because he felt “Annoyed and powerless by the greenwashing and talks about ESG in the stock market.” He actually wanted to make a difference using finance. “I wanted to invest capital directly in businesses rather than supporting NGOs already in the climate field. I felt that I couldn’t have any influence in directing the capital at the most needed businesses and communities in the Amazon,” he said during our chat.
During the course, Pajani and his co-founders were struck by the urgent need to de-fossilize capital. But how to achieve that?
Since 2020, they have invested five million USD of founder capital. This was deployed and invested in local communities in Ecuador, Peru, and Colombia through various Indigenous organizations. Covid was a pivotal moment to launch because at that time the local communities and businesses were finding it even harder to raise capital in the Amazon area due to restrictions in the respective countries.
According to an FAO report, around 35% of the Amazon’s forests are occupied by Indigenous groups. Deforestation rates are significantly lower in these areas (towards 2/3 lower on average), and there is clear evidence that the best stewardship for forest areas is under Indigenous control.
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Amazonia Impact Ventures’ approach is different from a foundation, it provides additionality to the organizations to expand their businesses and livelihoods. “Local people don’t want charity. They want to work and sell products and even export them abroad” he told us.
He believes the approach towards these communities should shift. “You can’t just turn up and tell communities to stop cutting trees down. You need to provide an economic path that demonstrates that standing forests are worth more to them.” As a privately run business, Amazonia Impact Ventures has a big advantage: it can deploy capital very quickly and assess projects faster than a social lender and this is crucial for farmers in negotiating prices with the buyers of their products.
How Amazonia Impact Ventures Differentiates from other organizations
Even if it is a private company Amazonia Impact Ventures’ main objective is still impact. They work closely with those they invest in and set specific goals towards addressing deforestation and deploying nature-based solutions over time. As part of the Impact linked loans provided, they also give technical assistance to the organizations to achieve those sustainability targets over time.
As part of their theory of change, Amazonia Impact Ventures hopes that their approach will incentivize more organizations like them to work in the Amazon and with local communities. Pajani believes that ‘’addressing livelihood first will help the fight against deforestation and climate change’’
There is no question they want to stay private even in the long term. “A lot of organizations do work for indigenous communities but the difference is as a private company we can grow much faster and tailor every investment according to the organizations’ needs,” Pajani said.
The dream of Pajani and his co-founders is becoming a solid reality, with the help of the Impact investment community, their mission of empowering social entrepreneurs in the Amazon will benefit the wider society.
Editor’s Note: The opinions expressed here by Impakter.com columnists are their own, not those of Impakter.com –In the Photos: The Amazon forest. All photos credit: Amazonia Impact Ventures.