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IFC Launches Program to Help Create Forest Plantations on Degraded Indonesian Lands

Jakarta, Indonesia, November 18, 2009 —IFC, a member of the World Bank Group, has launched the Sustainable Forestry Program in Indonesia to support the creation of viable forest plantations on degraded lands, helping reduce the impact of climate change and create jobs in rural areas.
IFC’s Sustainable Forestry Program was launched today at a workshop organized to address key challenges and increase investment in sustainable forest plantations. The workshop was attended by senior officials from the Ministry of Forestry of Indonesia, top executives of Indonesia’s forest concession companies, and leading nongovernmental organizations engaged in the sector.
Indonesia reportedly is the third-highest emitter of greenhouse gas in the world. Nearly 85 percent of this is from land-use change and deforestation. “This new program is part of IFC’s commitment to reducing greenhouse gas emission,” said Adam Sack, IFC Country Manager for Indonesia. “Establishing sustainable timber plantations on degraded land has several benefits. It reduces greenhouse-gas emissions, brings the land back into productive use, and produces much-needed jobs in rural areas.”
Indonesia’s natural forest area has declined significantly, creating a growing climate change challenge and new obstacles to promoting sustainable forestry practices. Today, there are 96 million hectares of degraded land in Indonesia, at least 8 million of which is coarse grassland. IFC’s Sustainable Forestry program in Indonesia promotes sustainable forestry practices by helping companies find ways to profitably establish sustainable plantations on degraded land, and reduce costs associated with these plantations.
The program will measure its progress through five- year targets of expanding plantation on degraded land by at least 250,000 hectares, generating employment opportunities for 90,000 people in rural areas, and reducing carbon emissions by a minimum of 90 million tons.
To achieve these targets, the program will work through a three-pronged approach—reducing greenhouse-gas emissions through commercial rehabilitation of degraded lands, improving the business environment for forest plantation investment, and increasing certified forest plantation areas.
IFC Advisory Services in Indonesia are supported by the governments of Australia, the Netherlands, New Zealand, and Switzerland.
IFC is the only international financial institution focused exclusively on the private sector, the engine of sustainable development in emerging markets. It is currently seeking a capital increase to strengthen its ability to create opportunity for the poor in developing countries—including by supporting sustainable forestry practices in Indonesia.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit .