&Green’s inaugural investment in early 2019 was to support the Indonesian business PT Royal Lestari Utama (RLU). Established in 2015 as a joint venture between the tire producer Michelin and the Indonesian industrial conglomerate Barito Pacific Group, RLU set out to develop a new model for inclusive and sustainable rubber concessions. The company currently has two concessions covering approximately 88,000 hectares across the provinces of Jambi and East Kalimantan, and it intends to plant up to 34,000 hectares of rubber trees in the long-term.


PT Royal Lestari Utama (RLU)
Barito Pacific Group and Michelin Group
E&S Risk Category
&Green Investment
USD 23,75 million
Investment Term
15 and 7 years
Financial Structure
&Green purchased 15 and 7 years Notes organized by BNP Paribas and monitored by ADM Capital under the Tropical Landscape Financing Facility (TLFF).


Tables summarizing the portfolio’s total impact progress following the previous and the revised KPI frameworks are available in the Annual Impact Report.


Conservation Management

Engagement With Stakeholders

In 2021, RLU has worked together with an independent expert in social forestry from Jambi University to optimize livelihoods for smallholders through a Community Partnership Program (CPP). In the past year, more than 700 farmers joined RLU’s CPP covering over 700 hectares of land; however, to meet the ambitious CPP targets set with RLU upon investment, this program needs to significantly increase the numbers of participants in the coming years. This will likely require a revision of RLU’s approach to the CPP, with a fuller integration into RLU’s growth strategy.

RLU, together with &Green and IDH, commissioned MFC, a leading environmental and social consultancy, to develop a Land Return Roadmap and Framework that will help the company implement its land development approach. Following the IFC Performance Standards , this framework allows RLU to manage robust stakeholder engagement processes with land claimants and farmers in and around RLU’s concessions. The CPP will have a prominent feature in this Framework, alongside other benefit sharing models that have been designed for the different smallholders in the landscape . RLU has appointed resources to assess commercial feasibility of several benefit sharing models, and &Green will be closely involved to ensure that community partnerships are and will increasingly become an integral part of the business. This will be a priority in 2022.

In 2022, smallholders will be mapped out in more detail in a socio-economic baseline study. An Indonesian consultancy appointed by MFC in the Land Return Project was also chosen by RLU to carry out this baseline study on 500 households in and around RLU’s concessions in Jambi. Households directly impacted by RLU’s operations will be assessed and mapped to inform the implementation of the Land Return Framework.

Protection Forum

RLU is a member of the Bukit 30 Protection Forum (PKBT), a landscape-level collaboration platform in Jambi where five private land managers share information, knowledge, and resources for a more practical approach to protect their concessions and surrounding forest areas, including the national park. The platform, established by Partnerships for Forests (P4F), also engages with the Government and other stakeholders to ensure alignment and maximize support. Through a close engagement for the past year, the Forum has nurtured trust among the members, resulting in collaboration initiatives like joint-patrolling and joint landscape monitoring systems.

The Bukit 30 Protection Forum is currently building a web-based GIS platform with restricted access to members to exchange, for example, hazards maps (fire, illegal logging, encroachment, etc.) and other spatial information (location of Indigenous People , elephants roaming areas, etc.). By sharing this information, the members can adjust their protection plan, collaboratively design activities (like joint-patrolling), and monitor the impact of the collaboration on the landscape.

Financial Performance

RLU met all of its financial commitments over the year, however the expected equity injection from its shareholders did not materialize, forcing the company to seek a waiver from default for non-payment of interest in February 2022. Due to the cash reserves established to benefit the TLFF I Pte Ltd noteholders, such as &Green, the Notes remain current, having made the required coupon payments in February 2022. &Green’s further analysis and consultation with legal counsel suggests that while the probability of a default of the Notes has increased materially, TLFF I Pte Ltd will continue to be able to service the coupons through August 2022. However, the underlying loan to RLU is now officially in default. RLU’s shareholders continue to discuss long-term solutions to finance the operations and restructure loans due to TLFF I Pte Ltd. and other commercial lenders.

Both shareholders have conveyed their intention to resolve the impasse over the form and valuation at which further capital should be injected. &Green’s investment team has been working closely with all relevant parties involved with the TLFF I Notes issue, including ADM Capital, BNP Paribas, UNEP, RLU, Michelin and Barito Pacific as well as other Noteholders and the Notes Guarantor, Development Finance Corporation (DFC) of the USA to assert &Green’s rights and remain abreast of the latest developments between the Company and its shareholders.

2021 was an important year for RLU; we have taken steps to evaluate our performance, environmentally and socially, and integrate the findings in our systems. The updated HCV/HCS study will help us strengthen our conservation management and design a consolidated approach across the landscape. The Land Return Roadmap lays out the steps to inclusive land management, merging stakeholder needs, government policy and RLU commitments in a single Land Return Framework. Together with TLFF, &Green, and our key stakeholders, we are translating our sustainability ambitions into responsible management.


Director Corporate Affairs, RLU

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