ADM Capital Foundation and ADM Capital, in partnership with UN Environment, BNP Paribas and ICRAF established TLFF I in 2016 to look to provide simple, scalable routes to generate long-term blended finance for commercial projects in Indonesia that help reduce emissions from land conversion (forests to agriculture), support rural livelihoods and provide access to energy for off-grid communities. The social and environmental objectives of the private sector facility respond to the government of Indonesia’s development and conservation objectives.
TLFF I was Southeast Asia’s first corporate sustainability bond, issued to help the PT Royal Lestari Utama (RLU) produce sustainable natural rubber according to clear environmental and social safeguards, with a total project size across 88,000 ha in two provinces in Indonesia. With the support of TLFF, the government of Indonesia, key noteholders and the impact-driven &Green Fund, the PT Royal Lestari Utama (RLU) project, originally a joint venture between Indonesia’s PT Barito Pacific and France’s Michelin Group, demonstrated a new benchmark for sustainable land use models in Indonesia.
The RLU project has, to date, achieved significant positive environmental and social impacts including:
- Planting rubber trees over more than 23,000 hectares, while setting aside over 54,000 ha for community livelihoods and conservation
- Creating approximately 4,000 jobs, largely within the local community
- Training 3,600 farmers under a Community Partnership Program
- Establishing a 9,700 Wildlife Conservation Area in collaboration with the Provincial Government of Jambi, the Indonesian Ministry of Environments and Forests, NGOs and Indigenous community leaders
- Further impacts can be found our Fact Sheet
In addition, adjacent to the 142,000 ha Bukit Tigapuluh National Park, the Wildlife Conservation Area helps protect high levels of biodiversity and serves as a transit corridor for unique wildlife such as the Sumatran elephant, Sumatran tiger, orangutans, Clouded leopard, Helmeted Hornbills and various other endangered bird species.
In August 2022, TLFF successfully discharged its inaugural transaction (USD 95 million loan), with the bond repaid in full to support Indonesia’s first sustainable natural rubber plantation.
NOTE: On 21 June 2022, the Michelin Group announced that it had acquired PT Barito Pacific’s shareholdings in RLU, making it the sole owner of the project. The change in ownership structure triggered the repayment on 18 August 2022 of the long-dated sustainability bond, which was arranged by BNP Paribas and issued to RLU as TLFF I in 2018. Read press release here.
