The Japan International Cooperation Agency earlier this year made very clear its opinion on the investment opportunity in Latin America.

The Japanese development finance institution committed $1 billion to IDB Invest to launch the JICA Trust Fund Achieving Development of Latin America and the Caribbean, or TADAC, a co-investment fund for the two organizations. It also invested in Mexico-based Dalus Capital’s third fund for the region’s early stage impact and climate tech startups, and Amazonia Impact Ventures, a new fund manager investing in sustainable livelihoods in the Amazon (for background, watch ImpactAlpha’s interview with JICA’s Michiko Kogure).

ImpactAlpha has been keeping tabs on nearly two dozen investors – from institutional LPs to small foundations – that have been active this year in just as many impact investment strategies in Latin America. Some highlights:

Natural capital

The biodiversity-rich region has become a proving ground for nature-based solutions and conservation finance models. Mombak’s Amazon Reforestation Fund, which buys and reforests degraded land in the Amazon, reached its $100 million fundraising goal with backing from AXA, Canada Pension Plan, Bain Capital, Union Square Ventures, the Rockefeller Foundation and others.

EcoEnterprises Fund reached a $50 million first close for its fourth fund with backing from IDB Invest, the Finland-LAC Blended Finance Climate Fund, FinDev Canada, Visa Foundation, Wire Group and FMO.

New fund manager Regenera Ventures secured investments from IDB Lab, the Green Climate Fund and the US International Development Finance Corp. to support regenerative agriculture and land restoration in Mexico.

Blended finance

The region’s fund managers face difficulty raising catalytic capital from philanthropic and development finance institutions to derisk emerging strategies. Mombak succeeded in securing a guarantee from Santander for its Amazon Reforestation Fund. Kawá Fund, launched by Arapyaú Institute, Violet and MOV Investimentos, is leveraging philanthropic funding and Agribusiness Receivables Certificates to crowd private investors into a planned $175 million fund to lend to Brazil’s cocoa producers. The Nature Conservancy and the Moore Foundation have supported Vox Capital’s blended finance fund for sustainable land use in the Amazon.

Local investors

Almost 20% of capital in blended finance transactions in the region now comes from local foundations, corporations, family offices and other investors. Impaqto Capital is among the region’s fund managers who can speak first hand to local investors’ growing appetite for impact investing. The Quito-based firm in January closed its first investment fund at $2.1 million, 40% of which came from investors in the region, including ​​CREAS Ecuador.

“The majority of capital still comes from the outside,” says Impaqto’s Justin Schwartz, “but we’re seeing progress in terms of local corporates and foundations investing in funds here.”