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TLFF issues $95 million sustainable rubber bond in Indonesia

The Tropical Landscapes Finance Facility has issued a $95 million sustainable rubber bond in Indonesia. The bond will pay for wildlife-friendly, socially inclusive and climate-sensitive rubber production in two Indonesian provinces.

The financing, arranged by BNP Paribas, will fund PT Royal Lestari Utama, a joint venture between Michelin and Indonesia’s Barito Pacific Group. Working with the World Wildlife Fund, the venture has preserved high carbon stock and high carbon value forest, along with wildlife and riparian zones and expects to support 16,000 jobs. About half of the 88,000 hectares are to be preserved for community development.

Restoring forests is investable

The bond was the first transaction for the Tropical Landscapes Finance Facility (TLFF), a partnership between UN Environment, the World Agroforestry Centre, ADM Capital and BNP Paribas, that supports long-term finance for rural development in Indonesia. A lending platform is run by ADM Capital and BNP Paribas and a grant fund is managed by the UN.

The complex structure “demonstrates that our institutional investor clients have the appetite to invest in projects and companies that combine commercial and financial performance with clear environmental and social purpose and impact,” BNP Paribas’ Eric Raynaud said in a statement.

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