AXA Commits $11 million USD to Forest Carbon for Wetland Forest Restoration Projects in Indonesia
Investment builds momentum for project development benefitting climate, biodiversity and communities
JAKARTA – Forest Carbon closed an $11 million investment today with AXA IM Alts1, locking in a combination of debt and equity from a global leader in alternative investments, with €153 billion of assets under management.
The AXA IM Impact Fund Climate2 and Biodiversity made the investment. The Fund was launched in 2019 as part of the company’s growing commitment to natural capital, resource efficiency and improving the resilience of communities that are vulnerable to climate change and biodiversity loss.
The equity will support Forest Carbon’s proven approach to large-scale wetland forest restoration. A new series of bonds will be launched for each project, with AXA IM Alts as the first subscriber.
“AXA’s commitment is a huge vote of confidence and the bond structure shows the sector is maturing,” said Jeffrey Chatellier, Chief Executive Officer of Forest Carbon. “The equity funds – along with AXA’s ongoing role on our board – will support Forest Carbon’s push to secure a portfolio of new restoration projects that can be financed by a growing community of investors, on the way to our goal of 250,000 hectares under management.”
Forest Carbon was founded in Indonesia because the country contains one-third of the world’s peat and mangrove wetlands, offering vast potential for globally significant climate and ecological impact. Forest Carbon’s first project, the Sumatra Merang Peatland Project, has now secured premium carbon offset buyers to restore a globally significant peatland forest with habitat for Sumatran tigers and many other species. AXA’s investment will build on this success and reduce the time required to bring new projects to market by leveraging new technology such as machine learning and Internet of Things (IoT) sensors for real-time impact verification.
“Climate change is one of the most urgent risks facing the world,” said Jonathan Dean, Head of Impact Investing at AXA IM Alts. “We wanted to test the potential of green bonds to scale up project financing and drive growth in the climate mitigation sector. We’re excited to see our investment in Forest Carbon create impact on several fronts. We can restore wetland forests, conserve biodiversity and help develop rural economies. We see this as an important model for climate change mitigation at scale, which is why we are so excited about supporting growth in Indonesia and wider Southeast Asia.”
Mirova Natural Capital – a pioneering asset manager specializing in technically sound forest, biodiversity and ocean funds – structured the deal with Forest Carbon and AXA IM Alts. The investment was also secured with technical support from USAID’s Green Invest Asia Program.
“Forest Carbon’s business model, especially its on-the-ground expertise in Southeast Asia, offers increasingly attractive opportunities for investors,” said Vincent Gradt, the Managing Director of Mirova Natural Capital. “We are channeling investment into market-based approaches to forest restoration and conservation because of the potential to generate strong returns from efforts to protect vulnerable ecosystems.”
The AXA IM Impact Fund Climate & Biodiversity will subscribe to restoration project bonds for at least two new projects, unlocking finance for high-priority biodiversity and wetland areas in Indonesia. Forest Carbon is evaluating projects now. The company will secure areas under threat of forest fires and conversion to commercial plantations, launching its second major project in the first quarter of 2021.
- AXA IM Alts is part of AXA Investment Managers, and a global leader in alternative investments with c. €153 billion of assets under management as at 30 September 2020(1), across real assets (real estate & infrastructure), private debt & alternative credit and private equity & hedge funds. AXA IM Alts employs over 700 people located in 16 offices around the world and serve the needs of more than 350 clients from Europe, North America, Asia Pacific and Middle East. We are a global leader in real assets (real estate) investment with c. €102 billion of assets under management, the number one property portfolio and asset manager in Europe(2), and one of the largest worldwide.
- Source: AXA IM data (unaudited). All figures as at 30 September 2020.
- Source: INREV Fund Manager Survey, June 2020. #1 Real estate manager headquartered in Europe based on total assets under management.
- AXA Impact Fund Climate and Biodiversity is not registered in France. This fund is not open to retail investors
Devan Wardwell, Director of Growth
+1 503 810 1072
About Forest Carbon
Forest Carbon restores degraded wetland forests. The company is a premium restoration project developer in Southeast Asia that delivers benefits for local communities, biodiversity and investors through a proven business model. Based in Jakarta and Singapore, Forest Carbon is built on a track record of success in the region. The team brings a decade of experience working on the ground, mapping wetlands and assessing below-ground carbon storage, hiring local workers and obtaining community support.
Forest Carbon’s Sumatra Merang Peatland Project is now a proven business model for large-scale restoration, with more than 5 million Euro in investment capital raised. Sales secured from major global brands support restoration efforts on more than 22,000 hectares, which reduces the risk of fire, strengthens the rural economy and creates jobs, and delivers returns for investors and partners. Forest Carbon is now scaling this approach by investing in technology with the potential to transform the way restoration is delivered at scale. http://forestcarbon.com/
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