&Green is financing the development of three sustainable rubber concessions operated by RLU in Jambi 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 as part of a larger capital raise. programme.
This is Indonesia, the region in green on the left is Jambi, on the right East Kalimantan

Project summary

COUNTRY Indonesia
INVESTEE COMPANY PT Royal Lestari Utama (“RLU”)
PROJECT SPONSORS Barito Pacific Group and Michelin Group
DATE OF NOTE PURCHASE 26/02/2019 (trade date)
&GREEN CONTRIBUTION USD 23.75 million (face value of Notes purchased).

RLU’s story

02 / blended finance


The RLU 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 company’s 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. The socio-economic benefits include the creation of an estimated 16,000 jobs and RLU’s commitment to the development of sustainable outgrower programs for smallholder farmers through their Community Partnerships Programme.

RLU’s ambition to create an inclusive and sustainable rubber plantation, with a positive impact on the local landscape and surrounding communities, fits well with &Green’s vision and mission to de-link commodity production from deforestation. The RLU plantation can be an example for other existing rubber operations to protect the landscape and the people in that landscape.

03 / the action plan


For more detail, including maps of the concessions and surrounding landscape, please refer to the RLU Landscape Protection Plan (LPP). RLU is currently updating its High Conservation Value (HCV) – High Carbon Stock (HCS) assessments and the LPP will be updated as soon as the results from those assessments are available (expected in Q3 or 4 2021).

&Green takes an active role in advising companies such as RLU on how to define their role as a key stakeholder within and surrounding their concession areas.

LPP – The LPP is a fundamental document for &Green that establishes and anchors RLU’s long term vision for sustainable development across the wider landscape of its concessions. An LPP was included in the Offering Circular, as required by &Green. It establishes a shared understanding of the concessions’ conservation and plantation zones and important stakeholders for better forest conservation in the landscape; and defines targets for conservation, smallholder schemes, intensified rubber production and social benefits.

ESAP – The ESAP is an Environmental and Social Action Plan which defines actions that RLU will implement to address E&S risks and shortfalls against international standards (in particular IFC Performance Standards), identified by a comprehensive third party E&S assessment. &Green requests the following improvements in targets and milestones for the ESAP prior to investment:

  • Improvements in the grievance mechanism, in particular culturally appropriate access for Indigenous People;
  • Development of safeguards to ensure that vulnerable people are not negatively affected by land acquisition;
  • Development of plans for the development of a smallholder in situ and a smallholder plasma scheme;
  • Development of plans for the development of a smallholder scheme
  • Development of an Indigenous People Framework and Plan, according to international good practice.

ESAB – monitoring and governance mechanism for RLU senior management and independent advisors to evaluate progress and effectiveness of the ESAP and LPP. The ESAB meets quarterly and reports to senior management and RLU’s shareholders on ESG related matters.

&Green has an observer role, alongside TLFF to ensure the ESAB and LPP link. &Green is continuously engaging with RLU to support their environmental and social efforts and help them improve on their journey towards international good practice.


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 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. RLU is currently updating its High Conservation Value (HCV) – High Carbon Stock (HCS) assessments and the LPP will be updated as soon as the results from those assessments are available (expected in Q3 or 4 2021).



The E&S risks of the RLU project are high due to the complexity of the landscape and the social dynamics in and around the concessions. Social risks relate to the development of plantation rubber estates within an area that is already highly encroached and the careful management of relations with surrounding communities, including Indigenous people who depend on these landscapes for their livelihood, to varying degrees. The most important environmental risks relate to biodiversity conservation, in particular regarding the impact on forests and endangered species. Other risks relate to erosion control and water management

RLU is addressing E&S risks with a commitment that exceeds business-as-usual efforts of concession holders in Indonesia: The company runs an extensive outreach programme to engage local communities and is committed to developing out-grower schemes to enhance opportunities for smallholder rubber farmers. RLU is investing heavily in environmental protection, in collaboration with the National Park Authorities and NGOs.

The E&S Action Plan agreed between &Green and RLU builds on and complements the E&S Action Plan RLU already committed to towards TLFF and Note holders. It reflects the actions most critical to achieving the &Green Fund’s objectives for its investment in &Green.