IFC - International Finance Corporation : IFC Advises Two Indonesian Companies on Sustainable Forest Plantation Management

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Novita Wund                                                    
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Jakarta, Indonesia, January 9, 2013 - IFC, a member of the World Bank Group, is advising two Indonesian companies - PT Mayangkara Tanaman Industri and PT Wana Subur Lestari - on how to manage their forest plantations sustainably, which will improve their land productivity, help reduce their carbon emissions by an estimated 8 million tons a year by 2018 and create jobs in rural areas.

As part of an agreement signed in August 2012, IFC is helping to evaluate the carbon balances of the two companies' forest plantations in West Kalimantan and guides them in adopting sustainable forest management practices with a focus on biodiversity conservation. Both companies are joint ventures between Japan's Sumitomo Forestry Co., Ltd. and Indonesia's Alas Kusuma Group.

"We realize the importance of incorporating environmental issues into our business strategy," said Jacub Husin, president director of PT Mayangkara Tanaman Industri and PT Wana Subur Lestari. "Our cooperation with IFC allows us to balance our economic gain with promoting sustainable forestry, as well as contributing to the development of local communities."

Indonesia's natural forests have declined in size significantly, exacerbating climate change and creating new obstacles to promoting sustainable forestry practices. The country is reportedly one of the top emitters of greenhouse gas in the world, with nearly 85 percent of the emissions coming from deforestation and land-use change. Indonesia has around 50 million hectares of degraded land with reduced biodiversity and carbon stock, referring to the quantity of carbon dioxide contained in a system with the capacity to accumulate or release it.

The latest project with PT Mayangkara Tanaman Industri and PT Wana Subur Lestari is part of IFC's sustainable forestry program in Indonesia, which was launched two years ago and aims to help companies establish financially viable plantations on degraded land.

"Reducing the impact of climate change is one of IFC's focus areas in Indonesia," said Sarvesh Suri, IFC's country manager for Indonesia. "Our cooperation with the two companies in establishing sustainable forest plantations on degraded land provides several benefits: It reduces greenhouse-gas emissions, brings the land back into productive use, and produces much-needed jobs in rural areas."

IFC Advisory Services in Indonesia are supported by the governments of Australia, Canada, Finland, the Netherlands, New Zealand, and Switzerland.

About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world's most pressing development challenges. www.ifc.org.

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