New Forests’ investment comes as the Government of Indonesia strengthens efforts to attract foreign investment as well as to improve forest management and to protect peatlands.
“This investment is among the first institutional investments in large-scale, sustainable forestry in Indonesia,” said New Forests’ CEO, David Brand. “We are excited to be part of the shift in Indonesia’s forest sector toward more productive and responsible operations.”
Brand continued, “We believe the HKI business will demonstrate how responsible forestry investment can produce better results for everyone involved, creating shared value for investors and local communities. The TAFF investment will improve the capital structure of HKI and fund plantation expansion. The agreement between New Forests and Sampoerna Agro will also ensure that local communities are consulted and positively engaged in the project and that important ecosystem services are not only maintained but enhanced.”
New Forests and Sampoerna Agro will develop a landscape approach to managing the estate with a combination of productive rubber plantation, conservation set asides, community forestry zones, and restoration of degraded areas. HKI is committed to conserving all remaining forest cover, including degraded and remnant natural forest. HKI will also adhere to the Forest Stewardship Council Principles & Criteria and follow the International Finance Corporation’s Environmental and Social Performance Standards.
TAFF is a $170 million investment fund backed by institutional investors, including European pension funds, development banks, and European and American funds of funds. TAFF is managed by New Forests with a mandate to invest in and establish a portfolio of high-quality sustainable timber plantations in tropical Asia and a focus on increasing asset value through improved technical, operational, environmental, social, and corporate governance management.
New Forests is a sustainable real assets investment manager offering leading-edge strategies in forestry, timber processing and infrastructure, land management, and conservation.
