HACIENDA SAN JOSE
Hacienda San Jose (HSJ) is an innovative cattle business that cultivates and disseminates superior genetics and beef production in the Vichada region of 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 and 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.
KEY PERFORMANCE INDICATORS
&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 180,000 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.
HOW &GREEN’S TECHNICAL ASSISTANCE WAS USED IN THE HSJ TRANSACTION
&Green supported HSJ using the Technical Assistance (TA) budget to support its (prospective) clients 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.