Althelia Funds is now supporting the scale-up of the Sumatra Merang Peatland Project with an impact investment of EUR 5.1 million. Led by partners PT Global Alam Lestari (GAL) and Forest Carbon, this project will rehabilitate more than 22,000 hectares of peatland rainforest in the Merang biodiversity zone, one of the largest and deepest peat swamp areas in South Sumatra. The new initiative represents a major effort to protect an ecosystem home to hundreds of unique and endangered species that includes the Sumatran Tiger, securing an area more than 3.5 times the size of Manhattan.
An important focus is also placed on surrounding villages through the design and implementation of a community development fund, which supports community-selected projects in addition to new livelihood opportunities that help reduce the drivers of deforestation and poaching. The project’s impacts will be measured through traditional field based techniques as well as through remote sensing via drones, the use of camera traps to monitor wildlife and other innovations in sustainability tech.
The project will mitigate an estimated 1.2 million tons (tCO2e) of carbon emissions annually– the equivalent of taking 255,000 cars off the road for one year in the US. Over the initial 25-year license period, the project can generate 30 million tons of Verified Emissions Reductions (VERs), which can provide a source of long-term finance and permits cost recovery on Althelia’s initial impact investment. This deal structure establishes yet another proof of concept for a conservation-finance model in an emerging market, one considered increasingly viable by the commercial investment sector.
Technical implementation of Althelia’s investment in Indonesia is overseen by Forest Carbon, a leading forest conservation company with more than 10 years of project design expertise in Southeast Asia. Project partner and license-holder PT Global Alam Lestari lead ground operations, relying on a growing team of more than 30 forestry and landscape restoration professionals.
The project is expected to achieve gold status under the internationally recognized Climate Community and Biodiversity Standard (CCBS), and is also supported by the Zoological Society of London, which will lend staff and technical assistance to support biodiversity monitoring and endangered species protection. The Belantara Foundation is supporting the project through a concessionary capital investment, as part of the foundation’s wider efforts to support landscape rehabilitation in South Sumatra.