South East Asia’s First Sustainability Bond – Tropical Landscapes Finance Facility Fact Sheet

A multi-tranche, long-dated sustainability bond arranged in 2018 by BNP Paribas (BNPP) and issued by TLFF I Pte Ltd for RLU, a JV between Indonesia’s Barito Pacific Group and France’s Michelin Group. The RLU project is forward-looking and designed, in particular, to address the significant challenges of past deforestation and social conflict in the Bukit Tigapuluh landscape in Jambi, Sumatra by implementing rigorous environmental and social safeguards. The RLU project also helps protect the adjacent ±143,000 ha Bukit Tigapuluh National Park (BTPNP) from deforestation through collaboration with park officials and by serving as a buffer zone. At maturity, the RLU project will contribute to around 10% of Michelin’s natural rubber supply chain.

An estimated 50,000 people currently live in and adjacent to the three RLU concessions, LAJ, WMW and MKC. An extensive pre- investment document (the 2017 Environmental and Social Due Diligence Assessment (ESDD)) noted at the time the difficulties of determining attribution in the complex geographic context of the RLU project. It is based on this context that the financing structure for the RLU project set at its core the implemention of sustainability practices in the concessions and the protection of the BTPNP from encroachment. As a condition of the financing, RLU commits to manage the plantations to IFC Performance Standards (IFC PS) and to set aside more than half the concession area for conservation and community partnership programmes.