HACIENDA SAN JOSE
About HSJ
Hacienda San Jose (HSJ) is an innovative cattle business that cultivates and disseminates superior genetics and beef production in the Vichada region, located in the eastern Colombian plains. On 31 December 2021, &Green and HSJ concluded a COP 30 Billion (approximately USD 7.7 million at the time of execution) 12-year long-term senior secured loan to support HSJ’s ambition to disrupt the cattle sector in Colombia and become the market leader in sustainable deforestation-free beef production. As of 31 December 2022 HSJ has access to a USD 7.7 million facility as they unwound the hedge provided the previous year.
This transaction marks &Green’s first investment in Colombia, in a sector which is associated with poor land management, deforestation, and inefficient farming practices across the country, including in and around the Amazon biome.
Transaction Summary
KEY PERFORMANCE INDICATORS
FOREST PROTECTED
2,302 ha
CLIMATE BENEFITS
59,186 tCO₂e
ECOSYSTEM RESILIENCE
13,981 ha
PEOPLE RESILIENCE
1,016
PEOPLE BENEFITTING
1,016
CAPITAL MOBILIZED
USD 0.9 Million
INVESTMENT RATIONALE
&Green’s investment in HSJ aims to help transform the Colombian cattle sector, which is characterized by inefficient management practices, and associated with deforestation and ecosystem degradation. HSJ was operating on approximately 8,800 hectares of land at the time of investment from &Green, and during the period of the loan, the business intends to expand to have influence over up to over 150,000 hectares of productive land. HSJ’s expansion strategy involves acquiring land, implementing its sustainable development model, and then selling productive land in approximately 1,000-hectare units to private buyers. Buyers must commit to long-term operational and sustainability management under HSJ’s guidance.
HSJ commits to protect all forest areas under its current and future management; an area of up to 13,500 hectares of gallery forest. In addition, HSJ will set aside an equal number of hectares for forest restoration, promoting the natural regeneration of savannah next to the gallery forest. This allows for forest regrowth and serves as a buffer for the conservation areas.
HSJ will catalyze the development of the cattle sector in Colombia by expanding its sustainable intensification model, protecting and restoring forest, and fostering social inclusion and knowledge sharing.
HSJ’s production blueprint exemplifies how regenerative agriculture practices can be adopted in &Green’s investments:
Cattle ranching in Colombia’s Vichada region typically follows an extensive and low-intensity management approach, on large areas of land, with seasonal burning practices. This has led to detrimental effects on soil health, water management, and CO2 emissions from savannah grasslands. Data on fire incidents is alarming, with every hectare of grassland experiencing repeated burning, hindering the natural progression of the ecosystem. Over the past decade, more than 70,000 fires have been recorded in the project landscape .
HSJ’s Landscape Protection Plan, targets, developed together with &Green, include:
Land Acquisition Tool: It is critical that HSJ’s sustainability framework is fully integrated in scale-up processes. To ensure integration, a Land Acquisition Tool (LAT) has been developed to guide HSJ land acquisition processes. The LAT merges the IFC PS , sustainable cattle ranching certification requirements and additional social safeguards, such as a screening for relations with armed groups, into a comprehensive checklist.
Zero-Fire Policy: HSJ adopts a zero-fire policy on its farms to restore degraded soils and preserve soil nutrients and microbial life. HSJ mitigates fire risk in areas outside its direct management through awareness, training and support for fire-free production models.
Forest and savannah conservation: all natural forest areas are protected from livestock and wildfires through long-term conservation management. Buffer zones are established so forests can re-grow, soil can restore, and the savannah can develop naturally without being stunted by wildfires.
Emissions removal and avoidance: achieved through enhanced fire suppression, increased soil sequestration through soil restoration, sustainable intensification, and no- deforestation.
See how regenerative agriculture practices were adopted on Roncador’s farm:
HOW &GREEN’S TECHNICAL ASSISTANCE WAS USED IN THE HSJ TRANSACTION
&Green supported HSJ using the Technical Assistance (TA) budget to support its (prospective) borrowers design the Land Acquisition Tool (LAT) in collaboration with three organisations: Climate Focus, GANSO , and AMPLO.
Climate Focus is an international green advisory company who partnered with International Center for Tropical Agriculture CIAT to form GANSO. GANSO focuses on transforming degraded pastures into sustainable landscapes. AMPLO is a Colombian Environmental, Social and Governance (ESG) consultancy who contributed to the LAT social component by conducting a social risk assessment and stakeholder mapping exercise.
The LAT is designed to guide HSJ in its land acquisition processes. The LAT integrates the IFC PS , Aval GANSO requirements, and additional social safeguards, including screening for connections to armed groups, into a comprehensive checklist. LAT checks are made in a two-step process: an initial GO/NO GO on a desktop quick-screen which requires minimal resources, followed by a more thorough investment evaluation process. The evaluation requires site visits, stakeholder consultations, and a cost/benefit analysis to inform HSJ’s acquisition decision. The LAT tool has been integrated into HSJ’s existing systems, covering operational, financial, and legal checks.
LOOKING FORWARD TO 2024
ENVIRONMENTAL AND SOCIAL MANAGEMENT SYSTEM
SUSTAINABILITY DIRECTOR
SUSTAINABLE CATTLE RANCHING CERTIFICATION
INITIATIVES