Finnfund has signed a $15 million loan agreement with Toucan Forestal Panama S.A., a forestry company managed by The Rohatyn Group, to fund afforestation, restoration and conservation work in Panama’s Darién region.
The loan will partly finance purchases of landholdings that include remnant natural forests for long-term protection, and it will also support conversion of degraded pasture into teak plantations and restoration of natural forest where feasible. The project will operate under FSC certification and uses an integrated model that combines commercial forestry with conservation and restoration.
Toucan Forestal’s existing assets include more than 1,600 hectares of teak plantations and 1,300 hectares of natural forest. The company expects to expand through a greenfield program that includes 1,500 hectares of new teak plantations and 1,000 hectares of natural forest designated for restoration and long-term conservation.
Across its landholdings, about 40% is expected to consist of protected or restored natural forest. Finnfund said the Toucan Forestal transaction is the first investment assessed comprehensively under its Planetary Boundaries investment framework, which it developed in cooperation with Security Trading.
Finnfund said the financing aims to support carbon sequestration through teak plantations and restored natural forests, and to support biodiversity and sustainable land use in an area it described as biodiversity-rich and affected by rapid deforestation.
