Pre-investment Technical Assistance by LDN TAF

Country:

印度尼西亚

部门：

农林业

语境

In many Indonesian landscapes, including in Central Kalimantan, deforestation, slash-and-burn practices, illegal mining and large-scale agricultural have negatively affected Indonesia’s forests, leaving behind degraded fallow land and a lack of income opportunities for local communities. One policy response has been to grant forest-dependent communities’ access to forest land through social forestry permits. However, not only has the distribution of permits been slow, but concrete economic benefits for households and communities also remain largely absent. There is therefore a need for project developers looking to utilize the social forestry scheme to create attractive economic benefits for local communities in balance with natural resource protection. This project is demonstrating such a scalable commercial model for landscape restoration with community participation on land issued through social forestry permits, and is preparing to attract additional (impact) investment.

该项目旨在通过种植快速生长的树种和农林业的现金作物来恢复4,000公顷的退化土地，并通过非timber森林产品（NTFPS）通过富集的种植林（NTFPS）来增加二级森林的价值。该项目是一个潜在的创新恢复金融案例的一个很好的例子，该案例由非政府组织发起，并变成了营利性社会企业。该业务目前正在寻求确保融资以显着大小实施成功的展示，然后是最初的私人投资，以扩大对LDN的影响并为当地社区创造收入机会。

Smallholder / community engagement

该项目与印尼政府获得社会林业许可的社区合作。社区为投资案例提供土地，并有权提供必要劳动的最大部分。作为回报，他们从销售中获得工资和一部分利润。项目运营商还明确部署员工，以帮助社区了解其权利和责任并进行FPIC流程。

商业模式

The investment in this project is expected to be recovered through sales revenues from fast-growing light wood after an initial growth period of seven years. Additional income is generated from the sale of intercropped agricultural crops (e.g., peanuts) and NTFPs (e.g., rattan), and sale of carbon credits (potential for sale not yet fully developed). This is combined with active protection of remaining forests. Specifically, the revenue is expected to result from:

  • 可持续木材（82％）；
  • Cash crops (16%);
  • Carbon credits (2%);
  • Potential from NTFPs (not yet included in baseline scenario).

资本和服务流

Investment need

该项目通过通过商业农林业和活跃的初级和次要森林保护恢复以前退化的土地的恢复创造了经济价值。该项目的当前业务模型的目标内部回报率约为10％。该项目的初始投资总额为500万欧元，主要由赠款，股权和软贷款组成。种子资金用于为前4,000公顷的开发提供资金。主要的资金需求是增长融资可扩展多达100,000公顷。预期的投资工具是一种无声的合作伙伴关系，可为项目运营商提供股票融资或软贷款，以资助资本和运营支出，以发展业务。此外，作为混合金融元素作为混合金融要素的赠款或公共补贴将使该模型能够为较少的商业工作和与企业概念概念相关的任务付费。

Risk management

The project is planning to deploy several risk mitigation strategies to reduce investment risk. These include:

  • Direct supply agreements with industry partners to reduce offtake risks for timber sale;
  • 卫星和无人机映射以选择降级区域仅用于农林业，并进行主动监测以降低森林砍伐的风险和火灾风险；
  • Diversification of revenue streams to mitigate underperformance of specific crops and risk of defaults on repayments.

Most importantly, the project operator allows for direct support of communities in the social forestry scheme, and the active management and reduction of risks in the underlying model.

Technical assistance

The focus is on cash-crop operations in the project’s agroforestry approach to improve early cash flows of the model as well as to significantly improve the payback period. The technical assistance will consist of a market evaluation, defining soil conditions and fertilizer options, field testing, post-harvest processing, and financial modelling to include cash crops into the overall investment proposal. Specifically, the technical assistance provided will allow:

  1. Selection of the most appropriate (shorter rotating) cash crops with strong market linkages, to ensure offtake and significantly improve cash flows to shorten the payback period and increase repayment security for investors;
  2. Identification of best-practice soil preparation and fertilizer options, to reduce costs and optimize yields, as well as to ensure positive environmental impact;
  3. 该项目模型的现场测试，特别是在当地条件（气候，土壤）下使用各种现金作物，鉴定出肥料选择和土壤制备的各种现金测试，以在寻求增长融资之前加强基本的商业模式；
  4. Provision of research on best-practice post-harvesting processes for the selected cash crops;
  5. Financial modelling of the impact of an intensified cash crop approach under the current business model.

Projected impact

  • LDN
  • 森林
  • Community livelihoods
  • Climate
短期：
  • 1,500 hectares of degraded land reforested through agroforestry, and measurably improved soil fertility and soil organic carbon (SOC) content;
  • 1,500 hectares of secondary forest managed as protected areas with enrichment plantings of NTFPs in suitable areas;
  • 1,000 hectares of primary forest protected, contributing to the conservation of biodiversity in the area, and restoration of key ecosystem services (erosion control, moisture cycle, microclimate);
  • Job creation and income generation for local communities.
Long term:
  • 11,000 additional hectares of agroforestry, sustainable forest management, and forest protection in five years, and another 85,000 hectares in ten years;
  • Sequestration of up to 212,880 MtCO2eq from restoration (excluding carbon stores in protected forests);
  • Project benefits extended up to 50,000 residents;
  • Replication of the project’s model by other actors.

Technical assistance support from the LDN TAF does not constitute a commitment from the LDN Fund, or Mirova, to finance directly or indirectly the project described above. Any such commitment shall be subject to inter alia, a detailed technical, financial and legal due diligence of the company and the project, as well as all required LDN Fund investment committee approvals and satisfactory documentation.