Mercado Libre Invests $8 Million in Rainforest Restoration with Pachama

Mercado Libre Partners with Pachama for Ecosystem Restoration

Mercado Libre, a leading e-commerce and financial services firm in Latin America, has chosen Pachama, a startup and Y Combinator graduate, as a key partner in initiatives focused on restoring ecosystems throughout Latin America.

Regenera America Initiative

This collaboration stems from Mercado Libre’s Regenera America program, an undertaking designed to address environmental concerns in the region. A significant investment of $8 million will be allocated to two distinct reforestation projects.

• The “Mantiqueira Conservation Project,” overseen by The Nature Conservancy.
• The “Corridors of Live Project,” developed and executed by the Instituto de Pesquisas Ecologicas.

These projects are geared towards the revitalization of over three thousand hectares of land. This will be achieved through both natural regeneration processes and the planting of more than 1 million trees.

Restoring Biodiversity and Protecting Water Resources

The combined efforts will concentrate on restoring vital biodiversity corridors and safeguarding crucial hydrological basins within the Atlantic Forest region of Brazil, as detailed in a joint statement released by the two companies.

Pachama’s Role in Verification and Monitoring

Pachama will leverage its advanced satellite and machine learning technologies to verify and meticulously monitor the carbon sequestration resulting from these extensive reforestation endeavors. This partnership elevates Mercado Libre to become Pachama’s largest client, surpassing even Microsoft in terms of investment.

Enhanced Efficiency and Transparency

The software solutions provided by Pachama are also expected to significantly enhance the efficiency and transparency of the reforestation work being carried out on the ground, according to the companies’ announcement.

Sustainability Bond Funding

The announcement of this agreement occurred at a press conference held in Argentina. It signifies the first allocation of funds from Mercado Libre’s recently issued $400 million Sustainability Bond. This bond was specifically created to finance projects delivering “triple impact” benefits across Latin America, with JP Morgan and BNP Paribas acting as issuers.

Mercado Libre’s Long-Term Strategy

Pedro Arnt, chief financial officer of Mercado Libre, explained that this initiative represents a foundational step in a broader, long-term strategy. He stated the company had engaged in internal discussions regarding the optimal timing for purchasing carbon offsets and credits.

Arnt further emphasized that supporting the development of projects generating carbon credits in Latin America presented a more substantial challenge and a more sustainable, long-term solution.

Four Pillars of Regenera America

Arnt outlined the four core components of the Regenera America project:

• Internal measurement and reporting of the company’s emissions.
• Procurement of clean energy to power the company’s operations.
• Deployment of electric vehicles for the company’s fleet.
• Assistance to last-mile and logistics partners in transitioning to electric transportation.
• The advancement of reforestation initiatives throughout Latin America.

A Regional Example

“This initiative serves as a model for more conventional industries across Latin America,” commented Diego Saez-Gil, co-founder and CEO of Pachama. He highlighted Mercado Libre’s position as the largest company by market capitalization in Latin America and its role as a leader for progressive businesses in the region.

Saez-Gil added, “Latin America possesses some of the world’s greatest biodiversity and carbon reserves and should be actively involved in climate mitigation efforts.”

A New Phase for Pachama

This deal also marks a significant milestone for Pachama, representing its first involvement in project origination and establishing a new revenue stream to complement its existing business lines.

“We are thrilled to begin supporting new reforestation projects capable of planting millions of trees and removing millions of tons of CO2 from the atmosphere. Scaling projects like these is crucial to addressing climate change,” stated Saez-Gil. “We believe that technologies like AI and satellite imagery are essential for achieving this at scale with integrity, efficiency, and transparency. Collaborating with organizations like Mercado Libre, The Nature Conservancy, and IPE for our initial projects is an exceptional opportunity.”