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Investment and Business Model for Blue Carbon and Commodities

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Presented by Fitrian Ardiansyah at Blue Carbon Summit, on 17-18 July 2018 in Jakarta, Indonesia

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Investment and Business Model for Blue Carbon and Commodities

  1. 1. Investment and Business Model for Blue Carbon and Commodities Fitrian Ardiansyah Chairman of Executive Board IDH Indonesia (17.07.2018)
  2. 2. IDH Indonesia & partners FORESTRYPULP & PAPER PALM OIL COFFEE COCOA AQUACULTIRE SPICES CEO/Chairman: Fitrian Ardiansyah Commodities & Landscapes: Program Director: Zakki Hakim Managers: Eka Wijayanti (SPM, Palm Oil) Mila Nuh (SPM, Papua) Aris Wanjaya (PM, Forestry, Kal) Program Officers: Nadia Ridwan (FOP) Burhanuddin (Papua) Landscape Managers: Riswan (Aceh); Lorens (W. Kal); Khusnul Zaini (Jambi); Ifran (S. Sumatra) Other Commodities: Program Officers: Melati (Coffee & Cocoa) Trini Pratiwi (Aquaculture) Innovative Finance & Business Development: Zakki Hakim Operations: Andri Oarto (Director) Yashinta Wardhani (Finance Officer) Yuli Setyawati (PA for Chairman) DONORS PARTNERS GOVERNMENTS PRIVATE SECTOR CSOsCommunication: Manager: Komang Arianti
  3. 3. IMPACT THEMES Smallholders Deforestation Living wages Agrochemicals Genders Off-takers Input materials, GAPs, systems Farmers Financiers Agregators 1 2 3 4 5 Why? We believe sustainable production and trade can transform markets for the benefit of people and the planet. How? Approaches & impacts
  4. 4. 3 2 1 4 5 6 7 8 9 10 11 12 13 Landscapes 1. Aceh; 2. S. Sumatra/ Jambi; 3. W. Kalimantan; Green Growth Plans, 30 companies, peat/forest mgt, KEE, PPI compacts, VSA Palm Oil 2. S. Sumatra/ Jambi; 4. N. Sumatra; 5. Riau; 6. Sabah; 7. Europe (ESPO); 41,555 ha; 11,425 farmers; Mapping, traceability, legality, farmer organization, GAP, RSPO certification 0 1 2 3 4 5 6 7 8 2013 2014 2015 2016 Invesment(MilEUR) Year Financing for Projects Donor Private Sector Total Investment Coffee 2. S. Sumatra/ Jambi; 8. Lampung; 9. W. Java; 10. E. Java; ±54,000 ha; 831 kg/ha (>741 natl avg); National curriculum, GAP, innovative finance, trade links Timber, Pulp & Paper: 2. S. Sumatra/ Jambi; 3, 11, 12. W., C. & E. Kalimantan; 2.1 mil ha (FSC certified); 1.66 mil ha (in process); Certification, productivity, protection Cocoa 13. Sulawesi; Leading & supporting CSP (Cocoa Sustainability Partnership) Aquaculture 1. Aceh; 3. W. Kalimantan; 10,000 farmers, innovative finance Our interventions
  5. 5. Ecohub Farmers 1 2 3 4 5 Aquaculture model
  6. 6. Village forest model Village Forest Size: 76,000 HA Off-takers Farmers/ Villagers Financial institutions (e.g. Credit Union) Village forest institutions 6-10,000 HA (COCONUT, TIMBER, HONEY, CRABS & SHRIMPS) 2,802 ha (Mangrove) 4,918 ha Additional Forest Cover (Reforestation & Natural Regeneration 2015-17: 57,756 ha to 62,674 ha) 393 ha (Dry Forest) 1,723 ha (Peat Forest) IDR 0.7 bil Revenue: Honey (in 7 months) IDR 1.5 bil Revenue: Coconut charcoal (in 6 months)
  7. 7. VERIFIED SOURCING AREA (VSA) PPI AGREEMENT Government is key TANTANGAN BERSAMA PENGELOLAAN TATA AIR KARHUTLA NKT (NILAI KONSERVASI TINGGI) PEMETAAN PETANI, MASYARAKAT, GAP, LEGALITAS AKSES PEMBIAYAAN KOLABORASI KONSESI & MASYARAKAT Images: Flaticon Key interventions: Green Growth Plans, PPI (production-protection- inclusion) compacts with 30 companies, peat/forest management, KEE (Essential Ecosystem Area), VSA (Verified Sourcing Area) Landscape approach: beyond one supply chain
  8. 8. An AGREEMENTbetween public, private (incl. farmers/villagers), civil society stakeholders or a CONCESSIONto enhance the sustainability and productivity of land and secure community livelihoods in exchange for forest /natural resources protection. Protection Production Inclusion• A landscape governance structure is developed • Sustainable agricultural production and use of natural resources are actively contributing to forest protection • New sources of funding are mobilized to support production, protection and inclusion PPI compact & concessions
  9. 9. Agro//forestry products ANDGREEN.FUND, LDNF (LAND DEGRADATION NEUTRALITY FUND), SMALLHOLDER FUND, ETC• Total projected financing need for complete rehabilitation & replanting key commodities ± US$ 4billion (e.g. &GreenFund ≈ US$125 million) • Risk-layering critical to attract long-term private capital needed • Strong protection components KEY FOR SCALE: supply chain companies, government of Indonesia and donors must de- risk 3rd party financing Innovative financing: scaling up
  10. 10. Fitrian Ardiansyah Chairman of Executive Board of IDH Indonesia Ardiansyah@idhtrade.org Terima kasih

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