To halve deforestation globally, an estimated US$45 billion is needed annually. Indonesia, home to some of the most biologically diverse forests in the world, the third-largest emitter of greenhouse gases (largely from land conversion and other forest burning) and where 50% of the population live on US$2 a day, is of course a critical target. The country alone needs an estimated $10 billion by 2020.
This includes smallholder/community development investments to provide income to rural communities to intensify agriculture on existing land and remove pressure from forests via expansion. Furthermore, Indonesia is committed to a 29% reduction in its carbon emissions and an estimated 87% of this will need to come from reducing emissions from land conversion and other forest burning.
ADMCF and ADM Capital along with partners UN Environment Programme (UNEP), The World Agroforestry Centre (ICRAF) and BNP Paribas in October last year launched the Tropical Landscape Finance Facility (TLFF) to provide a simple, scalable route to generate long-term, private sector finance to projects in Indonesia.
Pipeline Projects aim to help reduce emissions from land conversion, provide support to rural livelihoods, offer access to energy for off-grid communities. Expectations are for a commercial return to investors. Although it is a purely private sector initiative, TLFF has received considerable support from the Government of Indonesia (GOI). Consequently, we believe TLFF will provide a replicable and scalable model for stimulating private sector finance into projects with development and conservation objectives.