Canadian public pension investment manager La Caisse is doubling down on Australian agriculture with its second platform launch in the country in just over two years.
Its latest platform, Meldora, sees La Caisse (formerly CDPQ) move into the realm of nature-based solutions with a mandate to produce carbon credits, which has been structured with an offtake agreement with a major mining group.
As the investor pursues its new approach, it will lean on its established Australian partnerships – although it also remains open to new collaborations in the country.
Earlier this month, La Caisse contributed A$200 million ($132 million; €112 million) to its new Meldora platform, with Australia’s Clean Energy Finance Corporation topping this up with an additional A$50 million.
The platform, run by Australian farmland manager Gunn Agri Partners, will combine farming operations with large-scale environmental plantings to generate Australian Carbon Credit Units, partially backed by a long-term offtake agreement for these ACCUs with mining group Rio Tinto.
To get started, Meldora has already bought the 15,601ha Arcturus Aggregation in Central Queensland.
Across its portfolio, the partnership aims to plant about 30 percent of Meldora’s land for carbon projects, alongside cropping and grazing operations.
Meldora is one of about seven platforms that make up La Caisse’s sustainable land management strategy, led by Nicolas Leyssieux, who joined the firm five years ago.
Leyssieux tells Agri Investor that previously, La Caisse had no dedicated team for this strategy.
The unit, which sits within La Caisse’s infrastructure division, started with a goal to invest globally in both farmland and timberland.
This mandate has now expanded to include nature-based solutions, which Leyssieux says is “almost becoming an asset class by itself.”
Its target markets include the US, New Zealand, Latin America and Europe, while Australia plays a “key role” in the strategy.
“It’s a country that we like, where La Caisse is already heavily invested, and we believe that there are good opportunities for us not only to deploy capital, but to deploy capital in a meaningful way,” Leyssieux says.
‘Constructive capital’ is a catchphrase La Caisse directors like to use – Jean-Étienne Leroux, managing director, infrastructure, Australia and New Zealand, has also used the term to describe the social impact of infrastructure investments.
Leyssieux says partnerships are the means by which the sustainable land management unit achieves constructive capital.
“People ask me, ‘What kind of assets are you looking for?’ Usually, our reply is, ‘Well, we’re looking for the right partners.’
“We believe strongly in partnerships – we believe that one plus one equals three, and that it creates synergies.”
Credit where it’s due
In Australia, La Caisse’s chosen partners to date are farmland manager Gunn Agri Partners and the Clean Energy Finance Corporation, with whom it made its first investment in Australian agriculture in 2023.
La Caisse and CEFC also took a stake in Gunn Agri at the time of the deal.
The Gunn Agri-managed Wilga Farming platform, which attracted a A$150 million commitment from La Caisse and A$50 million from CEFC, is now almost fully deployed.
Although Wilga has started to generate ACCUs, carbon is not at the core of its mandate. Meldora, by contrast, explicitly includes ACCUs among its other natural capital strategies.
Leyssieux says CEFC’s “double mission” to decarbonize the Australian economy while also attracting more capital to the cause aligns well with La Caisse’s own focus on sustainability.
The two teams talk at least once a week, he said, and it was through this close collaboration that Meldora came about.
“They know the ACCU system very well, they were able to share their knowledge of the ACCU system with us, and it gave us a lot of comfort to go into something relatively new.”
Meldora’s long-term offtake agreement with Rio Tinto helps to de-risk the project, Leyssieux adds.
He says the platform’s combination of scale, profitability and underpinning credit, within the context of Australia’s relatively mature carbon credit market, makes it a difficult model to replicate anywhere else in the world.
While La Caisse seeks to deepen its relationship with both CEFC and Gunn Agri, Leyssieux says the partnership is not exclusive, and La Caisse is open to other collaborations in Australia.
Asked what La Caisse looks for in a potential partner, Leyssieux says: “Very high professionalism, expertise in a specific strategy, long-term vision – we don’t want to set up a partnership for a few years only – and the same ethical values.”
Looking forward, La Caisse will also be considering opportunities in Australian timberland to fulfils the other side of its sustainable land mandate.
