Indonesia: invests USD 23.5 million for sustainable deforestation-free rubber

The, which aims to drive green and inclusive agricultural investments, has made its first investment to protect around 56,000 ha of forest of the 90,000 ha concessions by PT Royal Lestari Utama, an Indonesian joint venture of the French tire manufacturer Michelin and Indonesian Barito Pacific Group. This landscape project in Jambi province, Indonesia, will follow IDH’s Production, Protection and Inclusion (PPI) approach, and is also expected to create some 16,000 jobs.

 Fitrian Ardiansyah, Chairman of Yayasan IDH (IDH Indonesia), said:

“We are pleased to see that our collaboration with the, the Tropical Landscape Finance Facility (TLFF), PT Royal Lestari Utami and local governments has brought this investment for driving sustainable deforestation-free rubber in Indonesia. IDH helped the Jambi provincial government in fulfilling the Jurisdictional Eligibility Criteria (JEC), which is one of important elements to meet the investment requirements.”

As one of the founders of the, IDH see it as instrumental to redirecting financial flows towards combining forest conservation with increased food production and economic growth, thus creating long lasting system change.

The will make this investment in Jambi through the purchase of notes issued by TLFF I Pte Ltd under the TLFF. This is the first investment of the Netherlands-based, whose current investors are the Government of Norway, Unilever and the Global Environment Facility, that will catalyze the completion of a successful notes issue by TLFF.

The TLFF notes are used to finance a USD 95-million loan to RLU for the development of their sustainable rubber plantations in Jambi (Sumatra) and East Kalimantan. The loan is partially guaranteed by USAID.

IDH’s PPI approach is expected to improve sustainable rubber production, to protect the conservation area within the concessions that is adjacent to the National Park of Bukit Tiga Puluh, and to create around 16,000 jobs in the region.