Posted on February, 02 2021

In recent years, our work has evolved to support greater collaboration and impact where it matters. WWF´s Forests Forward New Generation Plantations (NGP) concept is a good example of this, bringing together the private sector, civil society, governments, academia, and investors to develop solutions aimed at transforming whole landscapes.

In the Central Annamite mountains in Viet Nam, we are starting to see this come to fruition. Viet Nam has established over a million hectares of acacia plantations for timber production, offering a livelihood for tens of thousands of smallholders. But for individual growers owning just a few hectares, it’s not easy to make a living. Many opt to sell their trees at cheaper prices for woodchip after just four or five years because they need the cash, even though the timber would be worth three times as much if they could wait for another four years. Taking on other environmental improvements – like restoring native forest alongside their plantations and around watercourses – are actions well beyond the current financial capacity of most.

In partnership with IKEA, which commits to source all its timber from Forest Stewardship Council (FSC) certified or recycled sources, WWF has been supporting smallholders in Viet Nam to improve the way they manage their plantations and to achieve FSC certification. By organizing together as a cooperative, smallholders manage to achieve FSC group certification, and are able to sell timber to a furniture manufacturer that in turn supplies IKEA. As a cooperative, the group can negotiate better terms, access finance that allows them to grow their trees for longer, cultivate better quality seedlings and follow good environmental practices. In addition, the FSC standard sets down requirements for operational practices in acacia plantations to ensure there is no clear-cut harvesting and burning of vegetation. By planting native species, buffer zones and green belts are built and maintained around the plantations to avoid landslide. The planting of species also connects buffer zones and surrounding forests to minimize natural forest encroachment. Less chemicals and pesticides are also required in FSC certified acacia plantations. 
 
It’s a model that clearly works – but how can it be scaled up from a few hundred smallholders and a few thousand hectares, to tens of thousands of smallholders and hundreds of thousands of hectares? That question is being addressed through “WWF´s Bankable Nature Solutions”, a pipeline of “bankable” projects that offer an attractive return for private investors while providing environmental and social benefits including for those producers directly. Often, developing these projects requires initial support from other donors.  One such donor is the Dutch Fund for Climate and Development (DFCD), a €160 million fund from the Dutch government. Launched in 2020, the fund aims to mobilize more than €500 billion in private sector investment into projects that will boost the health of freshwater, forest, agricultural and ocean ecosystems, and improve water management. WWF is part of a consortium managing the fund, and is responsible for developing project ideas into bankable business cases.

The Central Annamites is one of the priority landscapes of the DFCD. On 4-5 November, 2020, with support from NGP and DFCD, the DFCD-CAL project team and WWF-Viet Nam organized a multi-stakeholder meeting in Hue City. Around 60 stakeholders, including private companies, governments, university, NGOs, civil society and business organizations and banks, and gathered in person and via digital connection to co-develop joint work plans for bankable projects. At the meeting, four potential bankable project ideas were show cased for private investment. These included a sustainable small farmers Arabica coffee production plantation and a coffee buying company in Quang Tri Province; a rattan afforestation and rattan processing project with solar energy in Quang Nam Province; a project looking to involve more smallholders in FSC certified acacia plantations run by a small forestry cooperative in Thua Thien, Hue Province; and the expansion of a number of wood processing manufacturing sites that operate on solar energy.  Private funding needs for those projects vary between USD $1- 20 million.

The bankable project ideas are currently being revised whilst some of them were presented by SME´s at the WWF Germany Investors Workshop that took place on December 1^st and gathered project developers and representatives from finance institutions to tap into the much larger flows of commercial finance. If enough funds are secured, the projects will be up and running by next year.

Building conservation into bankable projects represents a massive opportunity for producers, communities, business, and finance. It can deliver huge impacts from reducing pressure on ecosystems, driving resilience to mitigating climate change and sustainability for both people and nature, while generating positive financial returns for communities and investors.