The Forest and Landscape Restoration Mechanism

Mobilizing private finance - A learning challenge to address one of the biggest barriers to effective implementation of forest and landscape restoration

Year published: 02/05/2023

Led by the Forest and Landscape Restoration Mechanism (FLRM) of the Food and Agriculture Organization of the United Nations (FAO), the Local Finance for Forest and Landscape Restoration Community of Practice went on an online learning journey from 28 February to 16 March 2023. The learning challenge entitled “Private sector engagement and development of bankable business plans” was designed to better understand and tackle one of the key challenges that practitioners face in securing the long-term sustainability of their projects and programmes: how to attract appropriate and timely private finance.

In order to achieve the ambitious international targets related to forest and landscape restoration, over USD 300 billion of private capital must be mobilized. While there remains a significant funding gap, it is undoubtedly true that more private investment than ever is being channelled into landscape restoration. This has the potential to transform the sector, yet private finance often remains elusive for those on the ground, resulting in a continued reliance on government and grant funding and precarious short-term project cycles.

This learning challenge on private finance, hosted by FAO’s FLRM team and the Landscape Finance Lab, built on the learning series previously delivered on “Enabling conditions” for investment and “Climate investment for restoration.” With a focus on the role of the private sector in supporting landscape-scale investment for restoration and building bankable business plans for restoration-aligned activities, this learning challenge introduced key concepts, and offered practical applications and real-life examples.

Activity 1 on 28 February 2023: Role of the private sector in the landscape

Christophe Besacier from FAO introduced the learning challenge and the broader context for this first session, followed by Florian Vernaz from the Landscape Finance Lab, who gave participants an overview of the role of the private sector in a landscape: What is meant by “the private sector,” and who are they key actors? What influence and impact do they have on a landscape? What are the mechanisms for investment to support restoration? Akshay Regmi from Climate Catalyst and Andika Putraditama from Rimba Collective (by Lestari Capital) offered case studies in peatland restoration and palm oil supply-chain landscapes, respectively, with perspectives on the challenges and opportunities that private sector investment presents for both.

Activity 2 on 2 March 2023: Deep dive into stakeholder mapping

This session introduced the practice of stakeholder mapping and explained its importance. After a brief overview of the types of mapping that can be conducted, i.e. stakeholder mapping, power analysis and supply-chain mapping, facilitators guided participants through a hands-on mapping exercise using a simple stakeholder mapping spreadsheet tool which could be modified and expanded upon according to different contexts.

Activities 3 and 4 on 9 March 2023: Masterclass on building bankable business plans and the launch of FAO’s new e-learning course

Marco Boscolo, one of the lead authors of FAO’s Developing bankable business plans - A learning guide for forest producers and their organizations and the new e-learning course it inspired, “Developing bankable business plans for sustainable forest-based enterprises,” introduced participants to bankable business plans and how they can be used as compelling investment proposals. Participants were guided through the typical process of business plan development, including the ten key components of any good plan. Small group breakouts offered participants rich opportunities for discussion and exchanges, especially valuable for practitioners in the early stages of developing their plans.

Activity 5 on 16 March 2023: Investor marketplace

This final world café-style session gave participants the chance to quiz the diverse and distinguished panel of investors including Rebecca Mincy of The Acumen Resilient Agriculture Fund, Patrick Balifi at Rainforest Alliance’s Africa Cocoa Fund and Sanchayan Chakraborty of Aavishkaar Capital on their investment criteria, strategies and opportunities to engage.

At one point, Mincy commented on the close relationship her fund has with its investees, saying: "We are in the business of changing farmer behaviour, and behaviour change needs trust". We too believe that trust and change go hand in hand, and hope that through this learning challenge and our efforts to promote dialogue between practitioners and the investment community, we are supporting the trust and greater confidence in practitioners’ abilities to access the private finance that forest and landscape restoration so vitally needs.

Deesha Chandra (Landscape Finance Lab)