Impact Fund Denmark has committed DKK 130 million (USD 20 million) to The Reforestation Fund (TRF), a vehicle dedicated to restoring former rainforest areas across South America, according to a press release by Impact Fund Denmark. The fund is expected to raise more than DKK 7.8 billion (USD 1.24 billion), making it the largest afforestation fund ever assembled in South America. The initiative targets the Brazilian state of Mato Grosso do Sul, where cattle ranching has driven significant rainforest loss. It aligns financial returns with climate and biodiversity goals. The investment marks a major step in large-scale reforestation finance.
Around 75% of deforestation in South America stems from increased cattle production, with grazing areas expanding at the expense of the rainforest. This dynamic has caused biodiversity loss, the release of stored CO2, and the destruction of local ecosystems. Mato Grosso do Sul alone hosts roughly 19 million cattle, close to 8% of Brazil’s national herd. The region, therefore, sits at the center of the fund’s intervention. Restoring degraded pasture is the core of the strategy.
The fund acquires land previously used for cattle grazing and replants it with forest. At full scale, the strategy aims to restore and replant about 267,000 hectares. Roughly 133,500 hectares are reserved for the protection and restoration of native forests and natural habitats. The remaining half is planted with millions of trees for sustainably managed commercial forest production, generating ongoing revenue from timber and verified carbon credits. Demand for those credits has already come from major tech companies, among others.
The fund expects to sequester 36 million tonnes of CO2 over 17 years of operation, corresponding to Denmark’s total annual CO2 emissions.
“This is an investment where attractive returns and nature restoration go hand in hand. When land is revitalised as forest, long-term income is generated from sustainable timber and climate credits from CO2 storage, while nature is given room to return. This is exactly the kind of investment we want to support. Where capital works for returns as well as climate and biodiversity,” said Lars Bo Bertram, CEO of Impact Fund Denmark. The project is also expected to create 2,700 local jobs per year.
The fund is managed by Timberland Investment Group, part of BTG Pactual and among the world’s largest forest investment managers, giving the initiative considerable industrial and financial weight. It also benefits from EDFI Carbon Sinks, a guarantee managed by EDFI Management Company and funded by the European Union under the EFSD+ programme, as part of the EU’s Global Gateway strategy. EFSD+ (European Fund for Sustainable Development Plus) is a key instrument within the EU investment framework designed to mobilise private sector financing for sustainable development in partner countries. Together, these backers provide scale and credibility to the venture. The project positions South America at the forefront of global reforestation finance.
