The full roadmap is available at [ROADMAP URL].
Latin America holds some of the world's most compelling carbon dioxide removal assets, from Amazonian biomass to sugarcane ethanol infrastructure, mining by-products suited to enhanced weathering, and a fast-growing pipeline of CDR developers. But strong fundamentals alone don't build projects.
The Carbon Business Council's Latin America Working Group spent eight months convening banks, insurers, developers, buyers, and policymakers around a single question: what does it take to make CDR projects in the region bankable? The result is the Latin America CDR Investment Roadmap, designed to provide a practical framework for moving the market from promising to financeable.
Ahead of Carbon Unbound East Coast next week, we sat down with Isaac De León Mendoza, Chair of the Latin America Working Group at the Carbon Business Council, to unpack the roadmap's key findings.
1. Why Bankability Was the Question
The Carbon Business Council's Latin America Working Group spent eight months convening banks, insurers, developers, buyers, and more around an important question: what does it take to make CDR projects in Latin America bankable? And why was that the right question to focus on?
Latin America has strong carbon removal fundamentals to support a diversity of pathways: biomass availability, industrial infrastructure, mineral resources, world class renewable energy and a growing pipeline of entrepreneurs. But this is not enough to build projects, we need capital too. To make the roadmap as accessible as possible across the region, we published it in Spanish, English, and Portuguese.
Too much of the global conversation has focused only on technology readiness or demand headlines, which of course matter, but developers in the region face a more practical question: can my project attract the financing that will allow it to be built and scaled?
We focused on bankability because it forces every stakeholder to speak the same language. Developers speak technology, corporates speak net zero targets, banks speak cash flow and revenue, insurers speak risk transfer and policymakers speak incentives. Bankability, or the way to think about money flowing into project buildout, is the common language that connects all of them.
We thought: if we work on answering this question, Latin America can move from being seen as a future opportunity to being viewed as an investable market for carbon removal today. Critically, that also means recognizing the role policy plays from the outset — well-designed frameworks can build demand, reduce risk, and give lenders and developers alike the confidence they need to commit capital.
2. Bridging Buyers and Projects
The roadmap aims to connect Latin American buyers (e.g., companies with net zero commitments that will need CDR) with the projects being developed in the region. Why is that buyer-project connection so hard to make today, and what structures does the roadmap propose to enable it?
Today, it seems that demand and supply often operate in isolation. While there are many efforts to close this gap, those needs do not naturally align yet. Buyers want confidence on quality, delivery timing, durability, and reputational risk covered. Developers need early revenue certainty, long term commitments and contracts that can support financing.
Some buyers also seem to know the North American and European markets better than Latin America, so projects in the region can be overlooked despite strong fundamentals. On the other side, some developers are building technical capability but not always packaging projects in a form procurement teams or credit committees can easily understand.
The roadmap proposes several bridges for these gaps. The market needs translation mechanisms between stakeholders, specially, demand and supply. So some of these bridges are:
- Long-term offtake structures with credible buyers that provide revenue visibility.
- Domestic aggregation models or buyers clubs that allow multiple buyers to participate and reduce concentration risk
- Stronger MRV and transparent project data so buyers can compare opportunities with confidence
- Blended finance and credit enhancement mechanisms that reduce risk during early deployment
3. Transactions, Gaps, Constraints
You’ve described the roadmap as grounded in ‘real transactions, real financing gaps, and real institutional constraints’. Can you give us one concrete example of each, i.e., a real transaction, a real financing gap, and a real institutional constraint, that shaped the roadmap's findings?
On transactions, it is hard to refer to just one. The roadmap is grounded on the experience that transactions bring, what has worked, what hasn’t and how working group members have dealt with challenges. It would be unfair to mention just one transaction as the breadth of transactions in the working group spans across pathways, jurisdictions and different types of buyers.
As for financing gaps, we found that members described over and over being able to raise grant money or founder capital, but struggled to secure the next layer of growth capital for commercial facilities. Some companies are too advanced for grants, but still too early or unfamiliar for conventional project finance.
A real institutional constraint is the absence of development banks in the capital stack. While we did have support from KfW (Kreditanstalt für Wiederaufbau) and their support and perspective has been key to translate findings into terms development banks would understand, meaningfully engaging multilateral development banks at the project level has been very difficult.
While Development Financial Institutions (DFIs) are identified throughout the roadmap as critical actors, securing their active participation proved to be more challenging than anticipated, reflecting the reality that CDR does not yet sit clearly within their existing mandate priorities or deal pipelines in Latin America. Closing this gap is itself a market formation task, and one that requires sustained institutional engagement.
4. What Bankability Actually Means
'Bankability' is a term people use freely but define differently. For the banks and institutional lenders in your working group, what does a bankable CDR project in Latin America actually look like, and how far are most projects from meeting that bar today?
I think your question is the crux of the issue, and it's what we tried to tackle in the roadmap.
First, we needed a definition of bankability, a good one, a bad one, any definition. If every actor is using that word differently projects will never “graduate” into something financeable. So we anchored our definition in World Bank practice and standard commercial lending criteria: a project is bankable when its operating cash flows are expected to cover debt service with a comfortable margin (typically a debt service coverage ratio is 1.20-1.40) and those cashflows are backed by contracted revenues, adequate security and insurance. In other words, lenders can reasonably trust the project to pay them back over the life of the loan.
When we applied that lens to CDR in Latin America, we saw a very clear gap. Most projects today are too capital intensive and too risky to be financed purely with early stage equity, but still too early and too unproven or even too unstructured for conventional project finance. One of our goals in the working group is precisely to close that gap.
Our view is that in Latin America, bankability for CDR will almost always require blended finance. That means using public or concessional capital to absorb a portion of the early stage and policy risk, so that private lenders and investors can come in on terms they recognize.
There is nothing exotic about this: first loss and catalytic capital structures already exist across climate finance in the region (i.e. renewables, efficiency, land use) and the data has showed that relatively modest concessional tranches can mobilize much larger volumes of private capital (blended finance funds have historically leveraged approximately $4 of total capital per $1 of concessional capital deployed).
One way to think about it is as a ladder to bankability:
- At the bottom you have ideas, pilot plots, scientific partnerships, and early community engagement.
- Then come projects that have issued verified credits and maybe secured small offtakes from climate‑leading buyers.
- The next rung is robust MRV, multi‑year offtake contracts, and cleaned‑up land tenure and community engagement. .
- Above that, you start to see a real blended‑finance structure: guarantees or junior capital defined, and institutions willing to play those roles.
- At the top, you have a full project‑finance package – contracts, financial model, legal opinions, risk‑mitigation – that you can actually take to a lender’s credit committee.
Most CDR projects in Latin America today are somewhere between step two and early step three. So, in the context of the roadmap, a bankable CDR project in Latin America is one where: rights, MRV, and social safeguards are clean enough for a conservative development bank; there is at least one strong multi‑year offtake that can underpin senior debt; a blended‑finance structure explicitly pushes downside risks away from the senior lender; and the whole thing is documented in a language (legal, financial, risk) that credit committees recognize.
Most projects aren’t there yet, no. They have solid climate logic and, increasingly, willing buyers, but they still come with messy land and legal structures, soft or short‑term offtakes, weak risk‑mitigation, and no clear ask for senior debt. The whole purpose of the roadmap is to move more projects up that ladder, from “interesting climate story” to genuinely bankable transactions.
5. The Insurer's Role
As part of your stakeholder group, what role did insurers say they could play in making Latin American CDR projects bankable, and what conditions would they need to be met before actively writing policies?
Insurers see themselves as enablers of bankability. Their value is in taking specific, well-defined risks off the table (e.g. durability risk, some reversal risk, and parts of the technology and operational risk) so that banks and development finance institutions can lend against more predictable cash flows.
At the same time, they were candid about the conditions they need before they can do that in Latin America: robust MRV and methodologies, delivery track record to calibrate risk, clean legal and contractual structures so insurable events are clear, and enough project pipeline to justify developing products.
6. Near-Term Bankable Pathways
Latin America has genuinely distinctive CDR assets, such as the Amazon, vast agricultural biomass, significant mining by-products suited to enhanced weathering, and sugarcane ethanol infrastructure that could anchor BECCS. Which pathways did your working group identify as most bankable in the near term, and which pathways have the potential but can't yet clear the financing bar?
In the roadmap we tried to be very honest about which Latin American CDR pathways are actually financeable in the near term. The most bankable pathways are the ones that piggy‑back on assets and value chains the region already understands: high‑integrity reforestation and restoration on relatively clean land; biochar built on existing agricultural and agro‑industrial residues; and enhanced rock weathering that uses by‑products and logistics from the mining sector. Those can be turned into project‑style deals if you combine long‑term offtake from strong buyers with blended finance and insurance to take the early‑stage risk.
Other pathways like sugarcane‑anchored BECCS, absolutely have huge potential, but they’re not quite bankable in the region yet. The constraints are less about technology and more about tenure and social complexity in the region, and about missing policy and revenue frameworks. Those will likely need policy frameworks, sovereigns and multilaterals to move first before banks can follow.
So in the next few years, if you ask where the first truly bankable, project‑financed CDR deals in Latin America will come from, I’d bet on “grounded” pathways that look and feel like enhanced versions of projects the region already finances today.
7. Confidence and Timeline
You've spent eight months in structured conversation about why CDR financing in Latin America isn't working yet. What gives you confidence that it can work, and what's your honest timeline for seeing the first generation of genuinely bankable, project-financed CDR deals close in the region?
The main thing that gives me confidence is that the problem is no longer conceptual. We’re not debating whether CDR has a role or whether there’s demand. The pieces we need for bankability already exist in the region; they’re just fragmented.
On the demand side, you now have serious buyers (tech companies, international corporates, sometimes even sovereigns) willing to sign multi‑year offtakes for high‑integrity removals.
On the supply side, projects in Brazil, Mexico, Colombia and others are already issuing verified credits across biochar, enhanced rock weathering, soil carbon and reforestation, not just pitching.
And on the policy and finance side, Latin America already knows how to do blended climate finance. Development banks in the region have been using guarantees, concessional tranches and structured funds for renewables and land‑use for more than a decade.
What’s missing is not a new instrument, it’s connecting those dots into a coherent architecture for CDR. That, for me, is a solvable problem.
In terms of timing, I don’t think we’ll see dozens of project‑financed CDR deals next year. But I also don’t think we’re ten years away. My honest view is that we’re on a two‑to‑five‑year clock for the first generation of genuinely bankable, project‑finance‑style CDR transactions in Latin America.
- In the next 12–24 months, I’d expect to see a handful of structured pilots that deliberately test the building blocks we outline in the roadmap. Currently, our working group is finding sponsors for first‑loss or guarantee facilities wrapped around early CDR projects, performance or reversal insurance layered in, and multi‑year offtakes used as the backbone for quasi‑project finance, even if the initial lenders are DFIs or national development banks rather than pure commercial banks.
- In the 24–60 month window, after we see those pilots perform, we will start to see the first true “project finance” deals: an SPV in the region with long‑term offtake to an investment‑grade buyer, a blended capital stack with public or concessional money taking the first hit, insurance covering well‑defined risks, and senior debt coming in on terms that look very familiar to anyone who has financed renewables or infrastructure in Latin America.
So my confidence comes from the fact that all the ingredients we describe in the roadmap meaning: anchor demand, layered capital, guarantees, insurance and MRV that stands up to scrutiny, are already present in the climate sectors and in the region; CDR is now catching up in terms of track record and sophistication.
The honest caveat is that moving from “ingredients” to “first full recipes” will take time, but that we’re also on track.
The full roadmap is available at [ROADMAP URL].
Isaac will be speaking at Carbon Unbound East Coast next week, taking to the stage to explore the roadmap's findings in more detail. Book your ticket now.
