Prolade Secures US$15 Million Financing from IDB for Sustainable Palm Oil Production

Prolade, a Mexican producer of sustainable palm oil, certified under the highest standards of the Roundtable on Sustainable Palm Oil (RSPO), celebrated the successful closure of a landmark US$15 million debt financing deal, marking IDB Invest’s inaugural investment in the palm oil sector. The IDB, headquartered in Washington, D.C., is the primary source of financing for social, economic, and institutional development in Latin America and the Caribbean.

The signing ceremony took place in Mexico City and featured the participation of Ilan Goldfajn, President of IDB, Luis Tejado, Chief Executive Officer of Prolade, and, in representation of the RSPO, Camilo Santos, Deputy Director for Latin America, along with delegates from the Canadian Climate Fund for the Americas (C2F) and the Finland-LAC Mixed Financing Climate Fund (FINLAC).

Commitment to RSPO Standards and Environmental Stewardship

As a proud RSPO Member, Prolade is dedicated to producing sustainable palm oil that meets the highest environmental and social standards. The funding will allow the company to expand its operations by an additional 2,000 hectares, implement advanced irrigation systems, and strengthen its commitment to local communities and environmental sustainability. This partnership reflects Prolade’s mission to lead responsible practices within the agricultural sector, helping to reduce 1.23 million tonnes of CO2 over 25 years, prevent deforestation, and create opportunities in rural communities in Mexico.

An Inspiring Tale of Community Involvement

On its path toward sustainable development, Prolade has encountered various challenges that have transformed into wonderful opportunities. One such opportunity has been building strong, trusting relationships with local communities. Marco Lucas, COO of Prolade explains, “When we began implementing our projects, we spoke directly with community members to explain our intentions and the positive impact we hoped to achieve. I understood that it was crucial to be present and listen to their concerns. This open dialogue was essential.”

This approach has fostered trust and led to tangible improvements in the community. Marco also highlights that, “Through communication and transparency, we have built a stronger, more collaborative relationship. The community is more willing to engage because they’ve seen the results of our work. This experience has taught us that trust is built gradually and is vital for project success.”

As a result, significant changes have taken place, with new services and businesses emerging in the area. Marco notes, “Today, we have several owned vehicles making daily trips to our extraction plant. The community has grown, with new taxi and van services, family home renovations, and even new restaurants and shops along the route.”

Fostering Development and Sustainability Involvement

Prolade’s commitment to social responsibility is underscored by the project’s potential to benefit rural employees and suppliers. The company is focused on converting previously deforested lands into productive perennial palm plantations, which will yield high-quality, RSPO Certified sustainable palm oil for the Mexican market.

Under IDB Invest’s technical guidance, Prolade has developed a comprehensive Environmental and Social Action Plan (ESAP) that aligns with RSPO principles. This plan includes biodiversity assessments, land acquisition procedures, community relations management, and pollution control improvements. Furthermore, the project features an innovative program utilizing biochar to enhance soil quality, alongside a Corporate Governance Action Plan to formalise decision-making processes and improve risk management.

As the second-largest economy in Latin America, Mexico holds significant potential for sustainable palm oil cultivation. Despite the challenges faced by the sector, initiatives like Prolade’s, backed by RSPO Certification, pave the way for a more sustainable future. By utilising degraded lands for palm oil production, Prolade exemplifies how agricultural practices can align with environmental sustainability and responsible consumption.

As the partnership progresses, Prolade and IDB Invest are poised to drive impactful change, fostering sustainable growth for both the region and its communities, with the RSPO playing a critical role in supporting their efforts.