Description financing model: Intermediated Financing Facility

Commercial capital is channeled through a facility that extends loans to farmers. These facilities often pool funding from both commercial and catalytic sources, enabling greater scale while balancing risk and return

Applicability: Well-suited for a range of asset owners (e.g., pension funds, institutional investors) who seek to support farmer financing without direct engagement

Considerations: Success is dependent on effective matching of stakeholders with different risk-return expectations

Description of de-risking tool(s):

Tranching: Investment structure split into tiers with different risk-return profiles, enabling blended capital participation by matching investor risk appetite

Offtake agreements: Contractual commitments by value chain actors to purchase sustainably produced outputs at pre-agreed terms, providing revenue certainty and improving bankability

Case study description: 

This model supports soy farmers in Cerrado, that forego their legal right to clear native vegetation in their farms (preserving > 5% than legally required)

1. SIM and Traive screen farmers against the RCF’s environmental eligibility criteria and conduct credit analysis
2. SIM approves loans, and farmers enter into loan agreements with the RCF, backed by collateral worth 115% of loan value
3. 
   
   1. (3a) Once a pool of loans is formalized, OPEA issues Certificates of Agricultural Receivables (CRAs) and register them in the Vienna and Brazil Stock exchange
   2. (3b) Investors subscribe to the CRAs and deposit funds in a bank account managed by Paying Agents (UMB)
   3. (3c) Capital raised is immediately transferred to farmers’ accounts
4. 
   
   1. (4a) Farmer enters into offtake agreement with traders and deliver them soy at harvest
   2. (4b) Farmers assign offtake agreements to RCF that receives payment directly from traders
   3. (4c) After harvested, traders pay RCF to repay investors
5. At the end of each cycle, independent verification of impacts and confirmation of RCF alignment with Green Bond Principles

RCF 2025-26 crop cycle: Supported 280 farms; Raised ~$60M