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September 13 2018

The Tropical Landscapes Finance Facility aims to source projects that transform lives and environments, and to securitize the project loans into bonds that will be sold to investors through the MTN markets. It all starts with a rubber plantation in Sumatra.

“For your grand plan on climate change to succeed, people must have livelihood opportunities. Because if their children are dying of malnutrition, all your stories about how nice a forest it will be will make no sense at all to their lives.”

Satya Tripathi has earned the right to speak so plainly about the realities and complexities of conservation. He spent several years in charge of UNORCID, a UN system office established to support work on the conservation of forests and the preservation of biodiversity in Indonesia. Before that he was the UN recovery coordinator for Aceh and Nias for three years, organizing the deployment of $7.2 billion in funds to rescue those regions from a devastating tsunami and years of bitter conflict.

Today he is the executive secretary of the Tropical Landscapes Finance Facility (TLFF), which seeks to combine well-intended money with innovative financial thinking, partnership and practical solutions to both environmental and social challenges. It is in its early days, but if it proves to be successful it could be highly influential around the world.

TLFF has so far backed just one project, but it serves as a useful microcosm of what the facility is intended to do. In 2015, Michelin and Barito Pacific Group, an Indonesian conglomerate with forestry origins that now operates across energy and real estate, announced a joint venture to develop a new kind of rubber plantation. It will take shape across three concessions, covering 88,000 hectares between them, mainly in the Jambi province of central Sumatra and partly in East Kalimantan on the Indonesian part of Borneo.

These are blighted places ruined by rampant deforestation. The idea is to do something different here: to reforest the concessions, planting sustainable high-yielding rubber trees on only about half of the available area and leaving much of the rest as a buffer to nearby national parks where orang-utans, elephants and desperately endangered Sumatran tigers roam.  Along the way the plan is to create more than 16,000 jobs.

“Fair wage jobs, not just jobs,” says Tripathi. “This is not people working for a dollar a day to produce nice Nikes and Pumas. That doesn’t work.

“These people will become custodians and protectors.”

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Chris Wright
Chris Wright
Chris is a journalist specialising in business and financial journalism across Asia, Australia and the Middle East. He is Asia editor for Euromoney magazine and has written for publications including the Financial Times, Institutional Investor, Forbes, Asiamoney, the Australian Financial Review, Discovery Channel Magazine, Qantas: The Australian Way and BRW. He is the author of No More Worlds to Conquer, published by HarperCollins.

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