DFCD to support financing solutions for forests, wetlands and community resilience

In Southeast Asia, vital forests and wetlands are under increasing pressure from deforestation, biodiversity loss, and climate change, threatening the livelihoods of local and indigenous communities. Forest Carbon, a leading environmental asset manager, is addressing these challenges through innovative conservation and restoration models.

By scaling its impact through structured financing solutions, Forest Carbon aims to protect critical ecosystems, reduce greenhouse gas emissions, and enhance community resilience.

With support from the DFCD Origination Facility, Forest Carbon is developing a Forest and Biodiversity Bond, paving the way for large-scale investment in nature-based solutions that benefit both the planet and its people.

The Dutch Fund for Climate and Development (DFCD) Investment Committee has approved a proposal to support Forest Carbon in the development of a Forest and Biodiversity Bond. This bond will enable Forest Carbon to raise $100m in blended finance to secure and manage one million hectares of forests and wetlands across Southeast Asia, scaling their impact on biodiversity conservation, climate adaptation, and community resilience.

Grant proceeds will fund the development and launch of a green bond structure, funding key design elements to ensure the instrument is bankable. Key activities include further strengthening Forest Carbon’s Environmental and Social Management System (ESMS), while further building out community benefit-sharing frameworks to ensure meaningful and guaranteed community benefits.

The partnership aims to create a replicable model for nature-based financing, developing key strategies to de-risk large scale investments into forest and biodiversity conservation that enhance resilience of local communities to climate shocks and stresses. This market creation work ensures the sector can broaden participation and fund critical climate adaptation efforts with capital from institutional investors.

SNV's commitment

To support the final development of this investment proposal, SNV intends to sign a EUR 429,500 reimbursable grant funding agreement with Forest Carbon. Additionally, SNV will provide a technical assistance package, including support for financial product design, legal framework development, and ESMS enhancement.

This initiative will help accelerate the protection and restoration of critical ecosystems such as peatlands, mangroves, and tropical forests. The project is expected to create meaningful impact, including protecting critical biodiversity habitat, reducing greenhouse gas emissions, and enhancing livelihoods for local and indigenous communities.

Outcomes of the origination project:

• Development of an investment-ready green bond structure.

• Establishment of a replicable Special Purpose Entity (SPE) for investment.

• Strengthening of Forest Carbon’s ESMS and benefit-sharing frameworks.

• Market analysis of emerging non-carbon revenue streams from a wider range of environmental credits (Biodiversity and Insetting Markets).
  
  

Expected outcomes of the fully funded $100M investment proposal:

• Reduction of 4.2 million tonnes of CO2e annually.

• Sustainable management of one million hectares of forests and wetlands.

• Enhanced livelihoods for over 23,000 people, including marginalized groups.

• Protection of critical biodiversity areas, including IUCN-listed species.

Jeffrey Chatellier, Forest Carbon's CEO, said: "The DFCD grant and technical assistance package will help Forest Carbon move closer to achieving our goal of protecting one million hectares of tropical forests and wetlands. By funding key elements of the green bond design, we are able to launch a structured finance model that can be scaled across our sector. We are excited to collaborate with DFCD to deploy capital on the ground for a premium environmental asset portfolio that promotes climate adaptation, biodiversity protection, and improved livelihoods."

Alex Downs, Business and Investment Officer at SNV for DFCD, said: "This Origination Facility support will accelerate the creation of a truly scaleable solution to fund protection of critical ecosystems and biodiversity habitat, while delivering returns for investors and vulnerable communities. Forest Carbon’s vision aligns perfectly with DFCD’s mission to de-risk and unlock high-impact investments in climate and biodiversity projects."

About the DFCD

The Dutch Fund for Climate and Development (DFCD) is a climate resilience fund, dedicated to supporting climate adaptation and mitigation projects which benefit vulnerable communities and landscapes. It is funded by the Dutch government and managed by a pioneering consortium of Climate Fund Managers (CFM), Worldwide Fund for Nature Netherlands (WWF-NL) and SNV, led by the Dutch Entrepreneurial Development Bank, FMO. For more information, please visit the DFCD website.

About SNV

SNV is a global development partner deeply rooted in the African and Asian countries where we operate. With 60 years of experience and a team of approximately 1,600 people, we strengthen capacities and catalyse partnerships that transform agri-food, energy and water systems. Working on the core themes of gender equality and social inclusion, climate adaptation and mitigation, and strong institutions and effective governance, we tailor our approaches to different contexts to achieve large-scale impact and create sustainable and more equitable lives for all.

About Forest Carbon

Forest Carbon is a leading environmental asset manager in Southeast Asia. With over 14 years of experience, the company manages 187,000 hectares of critical ecosystems and specializes in designing scalable, high-impact conservation and restoration solutions. Forest Carbon’s mission is to deliver measurable climate, biodiversity, and social benefits through innovative financial instruments and best-in-class environmental standards.

For more information and if you want to share any confidential information you may have regarding the intended project or company, please contact: SNV - Dutch Fund for Climate and Development: dfcd@snv.org