The World Bank’s Board of Executive Directors has approved a USD 100 million project in Paraguay to expand long-term financing for sustainable agroforestry and support job creation in rural value chains. The project, to be implemented by Agencia Financiera de Desarrollo, Paraguay’s national development bank, combines a credit line for producers, an investment fund for larger plantation projects, and support for project management and safeguards. The credit line is designed to encourage smallholder and medium-scale producers to invest in commercial or mixed plantations, restoration of natural forests, silvopastoral systems, and value chain processing. A Forestry Investment Fund will mobilize equity for larger-scale plantation projects by attracting institutional and private investors. The project also provides funding to strengthen AFD’s Environmental and Social Management System and technical oversight. Loan pricing is linked to environmental and social performance targets, with Forest Stewardship Council certification set as a baseline requirement for financing, and additional interest-rate reductions available for developers that aggregate smallholders and conserve natural habitats beyond legal requirements. The loan is a variable spread loan with a 17.5-year term, including a 3-year grace period.

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