Boris Spassky on building the biggest organic almond farm in France and making it investable

Boris Spassky, cofounder of Greenpods, joins us to talk about the critical role of project developers in creating bankable investable projects, the funds being raised and the missing deal flow.

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Big funds are being raised, but they all complain about the missing deal flow. So we need more project developer, disciplined people, who put together the business plan, organise the permits, figure out the seed or tree genetics, the irrigation equipment, organise the off-take agreement, and, while it gets delayed, don’t take a salary or a very low one for a few years. Boris is one of those project developers in France!

THE ROLE OF THE PROJECT DEVELOPER

The project developer role seems to be under the spotlight in the sector. In renewable energy, developers have always been a crucial piece to put all the different puzzle pieces together. In the regenerative agriculture and agroforestry space, the developer role hasn’t really been filled yet, but it seems to be emerging and some people are starting to take that role. GreenPods is a fully integrated regenerative agriculture farm developer specializing in tree nuts and servicing the growing demand for plant-based products, providing full traceability back to the farm.

‘After five years, we saw that there was more money wanting to flow to reg ag than actual developers […] I felt more compelled to go back to operations than stay as a financier […] And it was definitely… finding land, finding the right irrigation equipment, the right genetics…’ – Boris Spassky

HOW THEY STRUCTURED THE FINANCING OF THE FIRST FARM

GreenPods received a fund from France and had two years of reduced salary paid to launch their venture and they raised around 1 million in equity. In tree crops, CAPEX is quite high, between 10 and 15,000 euros per hectare. So it quickly becomes a 2/3 million euro project.

‘So, 1 million equities, we just got 1 million in debt from a syndicate of French banks made of Crédit Agricole and Banque Populaire. But because they didn’t know almond trees really well […], they thought that the risk was too important. So they made sure that they could apply bank guarantees from the European Investment Bank to secure the loan. So they’ve got an 80% first loss. It’s called guarantee enough. In France it’s a program so banks basically applied to the European Investment Fund. And they apply guarantees on the back of the loans so they don’t take any risk basically.’ – Boris Spassky

‘We went from that really flat piece of land that had been basically depleting the soil resources for 30 years, and we converted it. We entered in April 2021 and we started rotating crops again, we planted buckwheat, soy, and sunflower. And then we had winter crops and we planted oats, spelt winter wheat, and others, so already you tried to regain a bit of life’ – Boris Spassky

WHAT BORIS WOULD DO WITH 1 B EURO INVESTMENT FUND AND WHY HE PREFERS FOCUSSING ON TREE NUTS

According to Boris tree nuts capture carbon, it’s easy to get good prices as you stop tilling very quickly, your soil gets better, and biodiversity is brought back because there’s much more biodiversity in an orchard than in a cornfield. And it also contributes to the much needed shift toward plant-based diets instead of having soy feeding animals that are then fed to us.

‘I like nuts because they’re non-perishable. So it reminds me of my years in coffee and cocoa. You can store them. I wouldn’t be able to do fresh fruit because I think there’s certain anxiety after 24 hours, you know that you’ve only got 24 more hours left before it rots. I’ll stay away from this business, I think it’s for artists.’ – Boris Spassky

‘First, I would choose a geography that I love which is central Asia, you get Uzbekistan, Tajikistan, you get plenty of water in the Himalayas, two huge rivers flowing which are called Amu Darya and Syr Darya. And with 1,000,050,000 euro CAPEX, I think you could do 20,000 hectares, or you could do a lot. And I would do orchard because back in the days, it was an intensive cotton monoculture that has ruined DRC (Democratic Republic of the Congo).’ – Boris Spassky

‘I’ve worked in this space for many years even before and we have forgotten we always insist in France and horticulture and permaculture, but we’ve lost some acreage as well, I think it was maybe two and a half or 3% of our agricultural surface. We’ve lost I think one percentage point on this and relegating these crops to Europe.’ – Boris Spassky

ONE THING BORIS WOULD CHANGE IN THE FOOD AND AGRICULTURE

‘I would ask people to reallocate some of their disposable income to food […] I think that people have forgotten that you’ve got lots of different ecosystem services provided by agriculture, between water regulation, air regulation, co2 capture […] In the 50s, maybe the share of disposable income that a household would put in food was 30%, and now it’s maybe less than 10%.’ – Boris Spassky

OTHER POINTS DISCUSSED

Koen and Boris also talked about:

  • Greenpods’ next projects;
  • Organic orchards;
  • The future of mechanization;
  • What Boris would say to smart investors;
  • What he would say to people who want to get activein the space.

To know more about Boris Spassky and GreenPods, download and listen to this episode. 

LINKS:

LINKED INTERVIEWS:

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The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

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