View the map of the project area here.
Provincial Jurisdiction: Jambi
Investee Company: PT Royal Lestari Utama (“RLU”)
Project Sponsors: Barito Pacific Group and Michelin Group
Supply Chain: Rubber
Date of Note Purchase: 26/02/2019 (trade date)
Total Project Requirement: ~ USD 400 million
&Green Contribution: Purchase of Notes with a Face Value of USD 23.75 million
Description: &Green is financing the development of three sustainable rubber concessions operated by RLU in Jambi and East Kalimantan through the purchase of 15 and 7 year Notes, organized by BNP Paribas and monitored by ADM Capital under the Tropical Landscape Financing Facility (TLFF). The Notes allowed TLFF to provide a loan of USD 95 million to RLU.
View the Project Structure here.
The project aims to deliver ambitious environmental and socio-economic benefits: At the heart of these efforts is the establishment of a wildlife conservation area on the Jambi concessions as a buffer to the Bukit Tigapuluh National Park in Jambi, which is a habitat for critically endangered fauna such as tigers, orangutans and elephants. This will help protect the southern border of the National Park from encroachment in a landscape with high population pressure and severe degradation of other existing forest conservation areas. In addition, RLU has set aside all High Conservation Value (HCV) and High Carbon Stock (HCS) Areas, as well as riparian areas for protection on both the Jambi and East Kalimantan concessions. These conservation areas add up to 31% across all concessions. In terms of socio-economic benefits, besides the creation of an estimated 16,000 jobs, RLU is committed to the development of sustainable out grower programs for smallholder farmers through their Community Partnerships Programme.
The map below shows existing forest cover on the RLU concessions and in the surrounding landscape in Jambi Province. Due to high levels of historic deforestation over the past two decades, only small parts of the concessions are currently forested. The other parts contain a mix of RLU rubber and land claimed by local community members or land speculators – some of it bushland, some of it planted with rubber or (illegal) oil palm. In those parts of the concessions that RLU controls, including all intact forest cover remaining at the outset of the project, forest will be actively protected. In total, RLU has set aside 18,370 ha for conservation on the Jambi concessions, based on High Conservation Value (HCV) and High Carbon Stock (HCS) studies. RLU strives to gain control over these areas over time, however progress will be influenced by the need to balance conservation targets with social dynamics. As a result, it is possible that not the entire area set aside for conservation may ultimately be restored during the tenor of the &Green financing.
Beyond its own concessions, RLU aims to contribute to forest protection in the surrounding landscape through the creation and management of a Wildlife Conservation Area (WCA) of approximately 9,700 ha located in the part of the concession that is directly adjacent to Bukit Tigapuluh National Park and to two Ecosystem Restoration Concessions under management of PT Alam Bukit Tiga Puluh (PT ABT). With this, RLU and its partners are working to reduce encroachment pressure on all protected areas in the landscape. For more detail, including maps of the concessions and surrounding landscape, please refer to the Landscape Protection Plan.
Intensified Agricultural Production
RLU Plantations (in hectares)
Smallholder Plantations (in hectares)
Note: The Smallholder element of RLU’s Community Partnerships Programme is being planned in 2019 and expected to commence on the ground in 2020.
View the historical track record here.
Third Party Verification of Environmental and Social Return Progress
A third party specialized consulting firm is assessing RLU’s progress with the Environmental & Social Action Plan, Landscape Protection Plan and other internal environmental and social policies and plans on a yearly basis. A summary of their conclusions will be published here annually.