French insurer AXA (AXAF.PA) has committed to making a significant impact in reforestation efforts in Brazil by injecting USD $49M into the reforestation projects led by the local startup Mombak. This alternative investment vehicle, AXA IM Alts, boasts an impressive portfolio of over EUR $185B (USD $208B) under its management. The funding will be utilized to take a minority stake in Mombak, providing crucial support for the startup to scale up its operations and technology.
Mombak, backed by both AXA and Bain Capital, is set to lead ambitious projects aiming to reforest more than 10,000 hectares of degraded pastureland in Brazil. This undertaking is expected to generate up to 6 million carbon credits, making it one of the most significant carbon removal initiatives globally.
In an interview, Mombak co-founder Peter Fernandez expressed his vision, stating, "We are building the largest carbon removal projects in the world. The single largest opportunity for reforestation lies in Brazil." The company's approach involves acquiring degraded land from farmers and ranchers or collaborating with them to replant native species in the Amazon rainforest, which has been severely affected by deforestation in recent times.
Mombak's business model proves to be innovative and sustainable. By generating CO2 removal credits through their reforestation efforts, the company can participate in carbon markets, mitigating some of the risks faced by non-governmental organizations in their mission to reforest the Amazon.
The partnership between AXA and Mombak marks a significant milestone in the battle against deforestation and climate change. With the combined expertise and financial resources, they aim to make a substantial and positive impact on the environment while contributing to global carbon reduction efforts.
