The Restoration Seed Capital Facility (RSCF) is pleased to announce that New Forests has successfully closed its first investment in Vietnam through the Tropical Asia Forest Fund 2, marking a significant step forward in sustainable timber processing infrastructure in the country.
The investment is in Tavico Group (Tavico), one of Vietnam’s leading suppliers of solid wood lumber and logs. This partnership represents a key milestone in advancing sustainable forestry practices in the region.
RSCF provided reimbursable grants to support New Forests in the development of this investment, contributing to legal structuring, market analysis, technical support and the integration of enhanced environmental and social standards.
In 2020, Tavico established a 3,200-hectare FSC-certified community forestry program, engaging 300 smallholder farmers. This program offers employment opportunities and revenue-sharing mechanisms that benefit local communities. With the new investment, capital will be allocated to the goal of expanding the program to 10,000 hectares, significantly scaling its potential for positive livelihood and climate impact.
The investment and planned expansion aim to:
- Increase the supply of high-quality, certified wood, to reduce Vietnam’s dependence on natural forests and promoting responsible forestry.
- Strengthen local livelihoods by providing farmers with training and access to sustainable, long-term income streams.
- Support environmental conservation, including the protection of riparian zones and critical habitats. An estimated 10–15% of the program area will be dedicated to conservation.
Tavico will assess and pilot the use of innovative benefits sharing mechanisms to support longer rotation timber plantation regimes which have the potential to sequester carbon, improve biodiversity and drive higher incomes for smallholder farmers.
This investment exemplifies how blended finance can catalyze high-impact, sustainable forestry models. RSCF’s involvement helped accelerate the transaction while ensuring it incorporated robust environmental and social targets.
If you are a fund manager or investment adviser seeking to enhance your environmental and social impacts, learn how RSCF can support your fund or project development here.
