HFW advises Lestari Capital on $1b Rimba Collective Deal
Global, sector-focused law firm HFW has advised Lestari Capital on a US$1 billion deal to help establish the Rimba Collective, an initiative with the aim of protecting and restoring over 500,000 hectares of forest in Southeast Asia over 25 years, starting in Indonesia.
Rimba Collective is one of the largest private sector-enabled forest conservation initiatives ever launched in Southeast Asia. It was developed by Lestari Capital, an impact-focused enterprise, in collaboration with founding partners Nestlé, PepsiCo, Proctor & Gamble and Unilever.
The initiative complements the palm oil industry’s efforts to end deforestation by integrating and embedding funding for conservation across the supply chain.
Participants in the Rimba Collective will commit long term financing support directly correlating to the amount of palm oil they produce or use, effectively embedding the cost of forest protection and restoration into the cost of procurement. This financing will then be distributed to projects annually based on verified achievement of KPI linked outcomes. The participants may then apply the benefits arising from their actions towards their sustainability commitments and supply chain management commitments.
HFW represented Lestari Capital and helped structure the financing and sustainability linked claims associated with the outcomes of the activity.
HFW's Singapore-based team included Peter Zaman and Russell Quek.
Peter Zaman, Partner, HFW:
"We were delighted to help Lestari Capital find solutions to the challenges of developing a financing structure that did not involve traditional equity or debt financing and where returns on investment are sustainability linked claims and not tangible dividends or interest. As we identify new ways to recognise and value activities that are linked to the Sustainable Development Goals (SDG), innovative structures such as these will help build confidence for financiers to think outside the box and apply new KPIs towards how value is measured.
"We don't believe in just identifying problems or challenges unless we can also offer solutions. Working together with Lestari Capital on this transaction, we were able to overcome a number of legal, financial and accounting obstacles that arose in delivering the structure and this required close collaboration with Lestari Capital making this very much a joint success and therefore, a more rewarding experience for our Sustainability and Climate Finance team."
Wan Tzan-chiu, Chief Legal Officer, Lestari Capital:
"For a first of its kind bespoke structure such as the Rimba Collective at the cross section of finance and ecosystem services outcomes, I could not have asked for better expertise and support than Peter Zaman and his team at HFW. We were very well supported not only by their depth of expertise but also their availability and overall service level."
Find out more about the Rimba Collective here: Rimba Collective (lestaricapital.com)
HFW is a leading global law firm in the aerospace, commodities, construction, energy, insurance, and shipping sectors. The firm has more than 600 lawyers, including 185 partners, based in offices across the Americas, Europe, the Middle East and Asia Pacific. HFW prides itself on its deep industry expertise and its entrepreneurial, creative and collaborative culture.