Forging Forest Investment Partnerships in Asia: Highlights from the 2025 AFoCO Annual Thematic Dialogue

The Asian Forest Cooperation Organization (AFoCO) held its 2025 Annual Thematic Dialogue (ATD) on 13 May 2025 in Ulaanbaatar, Mongolia. The event gathered over 60 participants, including representatives from AFoCO Member Countries, private sector entities, multilateral development banks, and international partners.

Hosted under the theme “Catalyzing AFoCO’s Potential through Private Investment and Multi-Partner Collaboration”, the Dialogue provided a critical forum to explore how blended finance strategies, technological innovations, and multi-stakeholder partnerships can accelerate climate-smart forest investments across Asia.

The Dialogue featured a diverse set of sessions including strategic presentations from Singapore, Indonesia, and Mongolia on public-private partnerships in forest governance, and expert-led panel discussions involving, Artha Networks, the Asian Development Bank, National Forest Agency of Mongolia and the AFoCO Secretariat. Live and virtual participation formats enabled active exchanges on how to structure investable forest projects, enhance policy coherence, and develop AFoCO’s role as a regional platform for nature-based solutions.

The Dialogue commenced with an overview of AFoCO’s evolving strategy to become a regional platform for climate-smart forest investment. The core directions of the blended finance strategy were gradually introduced throughout the Dialogue, beginning with the opening session and further elaborated during various presentations and panel discussions.

AFoCO reaffirmed its intent to transition from a traditional project implementer to an investment enabler one that builds pipelines for forest carbon and restoration projects, links them with private capital and technology, and ensures measurable, verifiable outcomes. A central mechanism for this transformation is the AFoCO’s Friends of Asia and Asian Forests (FAAF) platform, envisioned as a multi-stakeholder ecosystem to facilitate co-investments.

The Secretariat highlighted five priority areas for future engagement:

1. MDB Co-financing: Collaborating with ADB to mobilize concessional lending and share risks in large-scale forest and climate programs.
2. Impact Investment: Partnering with Artha Networks and MYSC to expand inclusive, community-based forest projects.
3. Carbon Finance: Working with Rabobank and CAM to aggregate forest carbon projects and enhance access to carbon markets.
4. Blended Finance Platforms: Advancing early-stage solutions through FAAF, CAMP, and EOM-supported initiatives.
5. Technology & Innovation: Deploying AI and sensor-based tools to boost forest resilience. This shift was echoed across partner presentations, reinforcing AFoCO’s ambition to serve as a regional standard-setter for nature-based blended finance initiatives

Keynote Speech: Framing Private Sector Synergies for Impact

To further frame AFoCO’s shift toward blended finance and private-sector engagement, the Dialogue featured a keynote speech by Mr. Kwang Kim, Senior Advisor on Private Sector Engagement at AFoCO and Board of the Human Flourishing Foundation under the Economics Mutuality (EOM) Alliance. His presentation, titled “Framing Private Sector Synergies for Impact,” laid out a compelling rationale for why nature-based solutions must become investment-grade and why AFoCO is well positioned to lead this transition in Asia.Mr. Kim opened by stating, “There is no clear path to climate mitigation without nature, and no clear path to nature protection without investment.” With this framing, he underscored that climate ambitions cannot be achieved without transforming how capital flows toward ecosystems, especially forests.Drawing on trends in global sustainable finance, he emphasized that traditional donor led models are no longer sufficient. Instead, private capital from family offices, mission aligned corporations, and impact investors must be mobilized through structured platforms. He cited a projected intergenerational transfer of USD 68 trillion to younger, sustainability conscious investors as a unique opportunity to redirect wealth toward climate action.

Mr. Kim laid out five strategic challenges that often block effective public-private partnerships in forest investment:
1. Reputational Risk: Investors are wary of being accused of greenwashing.
2. Fragmented Engagement: NGOs, governments, and investors often operate in silos.Lack of Trust: Gaps in governance, accountability, and cultural understanding remain unresolved.
3. Poor MRV Infrastructure: Many nature-based projects lack verifiable impact frameworks.
4Early-stage Project Gaps: Few pipelines are truly “investor-ready.”

The keynote also introduced several design principles for AFoCO’s Friends of Asia and Asian Forests (FAAF) platform:

• 1. Co-create projects with investor input from the start
• 2. Structure blended finance vehicles with clear de-risking tools
• 3. Embed MRV systems with satellite data, AI, and local reporting
• 4. Build bridges between local communities, regulators, and capital

He concluded by encouraging AFoCO to lead Asia’s transition from fragmented forestry programs to cohesive, investable ecosystems, where measurable, scalable nature-based solutions meet private sector expectations on transparency, return, and impact.

Indonesia’s Forest Industry Transformation and Community Partnerships

Dr. Deden Nurochman, Directorate General of Sustainable Forest Management of Ministry of Forestry, introduced Indonesia’s strategy to modernize its forest-based industry through value-added wood production and inclusive community partnerships. The country is fostering collaboration between large-scale industries and smallholder communities through its community–industry partnership model, aiming to increase economic value while ensuring sustainable forest management. He highlighted “Prima Wana Mitra”, a national initiative that recognizes and rewards private companies that demonstrate best practices in inclusive forestry partnerships. Digital innovation was another key focus. Dr. Deden introduced SIHUTANKU.ID, a newly launched government-run digital marketplace designed to connect legal and sustainable wood producers—including community forestry groups and micro-enterprises—with broader domestic and international markets. He emphasized that Indonesia’s model combines social forestry policies, industrial innovation, and market access tools to empower local stakeholders while aligning with national climate goals. The country looks to collaborate with regional partners like AFoCO to scale digital infrastructure, certification systems, and blended finance initiatives that benefit both people and forests.

Mongolia’s Billion Tree Initiative and Private Sector Engagement

Dr. Oyunsanaa Byambasuren, General Director of the National Forest Agency of Mongolia, shared the country’s ambitious Billion Tree National Movement, which aims to plant 1 billion trees by 2030 as part of its broader climate and land restoration strategy. He detailed the country’s efforts to unlock private sector participation through regulatory incentives and public-private partnerships (PPPs). Notably, Mongolia offers up to 1% corporate tax deductions to mining companies and commercial banks that contribute to reforestation activities. This model has catalyzed meaningful private engagement in both urban and rural restoration projects. Dr. Oyunsanaa also emphasized the decentralized governance structure Mongolia operates under, with implementation support from local governments and provinces. Efforts are underway to expand technical training and monitoring systems to ensure tree survival rates and long-term impact. The presentation concluded with a call for deeper collaboration with partners like AFoCO in areas such as capacity building, regional technology exchange, and investment facilitation—particularly for restoration in arid and semi-arid zones.

Singapore’s Path to a “City in Nature”

Ms. Lorraine Tan, Senior Manager at Singapore’s National Parks Board (NParks), presented the country’s transition from a “City in a Garden” to a “City in Nature”, a whole-of-society vision to enhance biodiversity, climate resilience, and quality of life in a densely urbanized environment. Singapore’s “City in Nature” strategy is structured around four integrated pillars:

1. Extending Natural Capital through the expansion of nature buffer zones and forested areas;
2. Intensifying Nature in Parks and Gardens to create immersive biodiversity experiences;
3. Restoring Nature into the Urban Landscape, including greening of buildings and roads;
4. Strengthening Ecological Connectivity via park connectors and green corridors.

To foster civic participation and mobilize private resources, Singapore established the Garden City Fund (GCF) a registered charity with Institution of a Public Character (IPC) status. Separate from NParks’ main accounts, the GCF enables individuals and corporations to support conservation programs, biodiversity research, and public education. Initiatives funded include the OCBC Arboretum, the Singapore Botanic Gardens Seed Bank, and the well-known “Every Child a Seed” program. On the international front, Singapore has launched the Financing Asia’s Transition Partnership (FAST-P) to catalyze up to USD 5 billion for clean energy and nature-based projects across Asia. The government has committed USD 500 million in concessional capital, matched by partner contributions. Under its International Carbon Credit (ICC) framework, complementing Singapore’s carbon tax system, Implementation Agreements have been signed with Bhutan, Ghana, and Papua New Guinea, with Viet Nam nearing completion. She concluded that Singapore’s model is rooted in combining science-based policy, civic engagement, and innovative finance, offering a scalable blueprint for integrating nature into cities across Asia.

Nokia’s AI-Powered Forest Monitoring Technology

Craig Joseph, Head of Emerging Technologies and Prototyping at Nokia Bell Labs, introduced an advanced environmental sensing and awareness system designed to detect wildfires and monitor ecosystem threats in real time. Developed as part of Nokia’s commitment to responsible innovation, the solution is built on solar-powered, AI-enabled IoT devices with cloud-based analytics, capable of continuous operation in remote and high-risk forest areas. Each device integrates a suite of sensors along with a 3-axis accelerometer and BLE mesh networking. Devices operate autonomously, with a battery life of up to six years and data transmission every 30 seconds, requiring no maintenance for extended periods. Pilot deployments in the United States and Finland, in collaboration with NASA, NIST, and the U.S Air Force, have demonstrated the system’s capacity for early wildfire detection, air quality monitoring, and integration with external data feeds such as satellites and drones. The platform’s open architecture enables seamless compatibility with other sensing modalities and cloud environments. He emphasized that technical readiness is not the bottleneck, institutional inertia and fragmented governance remain the key barriers. He noted that wildfire responsibility is often splintered across multiple agencies, lacking cohesive leadership or policy mandates. Moreover, public institutions have historically been slow adopters of such technologies. However, utility companies and insurance firms, while unlikely to fund deployment directly, could serve as catalysts for adoption if supported by incentives or regulations. Joseph argued that no environmental sensing solution can be scaled without secured funding and legislative backing, underscoring the urgent need for stronger public-private partnerships.

Catalyzing Global SDG Capital through Family Offices

Kenneth Hynes, CEO and Co-founder of Artha Networks, emphasized the untapped potential of family offices private wealth management entities typically overseeing assets of USD 100 million or more in financing climate and biodiversity solutions aligned with the Sustainable Development Goals (SDGs). Unlike institutional investors, family offices manage their own capital, granting them greater flexibility to take long-term, values-driven, and higher-risk investment positions. This makes them particularly well-positioned to act as catalytic early-stage funders in emerging fields like nature based climate solutions. By 2030, family offices are projected to manage over USD 5.4 trillion globally, with significant growth expected in the Asia-Pacific region, especially in hubs like Singapore and Hong Kong. Investment trends show a marked shift away from traditional assets toward direct investments in sectors such as climate technology, afforestation, and regenerative agriculture. Notably, 46% of family office capital is now deployed through direct investments. As a case study, Kenneth highlighted Theia Ventures, a Bangalore-based (India) impact fund seeded with family capital. The fund plans to deploy USD 25 million into early-stage climate tech ventures. One of its investees, Varaha, aims to sequester 1 billion tons of CO2 through AI-driven afforestation and regenerative agriculture on smallholder lands. The initiative integrates LiDAR-trained AI/ML models and biogeochemical remote sensing to quantify impact at scale. Kenneth outlined three key design elements for engaging family offices in forest-sector investment platforms like AFoCO’s FAAF:

1. Impact validation: Metrics must be quantifiable and verifiable, supported by robust MRV systems.
2. Derisking mechanisms: Tools such as pilot funding, feasibility studies, and capacity building are essential.
3. Trust-based engagement: Storytelling and relationships matter, especially given the light regulation surrounding private capital.

He concluded by encouraging AFoCO to build investor-ready platforms that combine transparency, innovation, and mission alignment principles that resonate with the growing network of family offices seeking to leave a positive, generational legacy.

ADB’s Natural Capital Framework and Regional Entry Points

Sanath Ranawana, Director at the Asian Development Bank (ADB), presented the Bank’s Natural Capital Operational Approach (NCOA), a regional strategy to embed nature into development planning and finance. The approach is built on four pillars: natural capital accounting, policy reform, blended finance, and capacity building, aiming to align ecosystem restoration with co-benefits such as food security, carbon mitigation, and rural resilience. He introduced the USD 150 million Natural Capital Fund, targeting smallholders and SMEs across Asia-Pacific, and highlighted case studies including:

1. Yangtze River Basin (China): A national Gross Ecosystem Product (GEP) system and Payment for Ecosystem Services (PES) mechanisms used to price nature into national accounts.
2. Laos Forestry Investment Project: A USD 30 million blended facility to support afforestation, involving sovereign and non-sovereign financing.
3. Philippines Sto. Tomas Watershed: Integration of natural capital accounting as a blueprint for ecosystem management.

Ranawana outlined a three-stage strategy:

1. Upstream: Landscape-level ecological assessments and policy reform.
2. Midstream: Project design and integration of blended finance mechanisms.
3. Downstream: Monitoring, Reporting, and Verification (MRV) systems and long-term sustainability frameworks.

He stressed that ADB seeks partners like AFoCO to co-develop and implement projects, particularly those focused on forest carbon markets, PES, and private-sector blended financing. AFoCO’s intergovernmental structure and project portfolio make it a strong candidate for scaling these models across Asia.

Panel Discussion: Building Investable, Inclusive Forest Projects

The final segment of the Dialogue featured panel moderated by Mr. Hwang Kim of the Economics of Mutuality Alliance. Panelists included representatives from Artha Networks (Mr. Kenneth Hynes), the Asian Development Bank (Mr. Sanath Ranawana), the National Forest Agency of Mongolia (Dr. Oyunsana Byambasuren), and the AFoCO Secretariat (Dr. Donhwan Kim). The discussion centered on the practicalities of implementing blended finance strategies and catalyzing private investment in forest landscapes.

Key discussion points included:

• Mongolia’s Private Sector Experience: Dr. Oyunsana shared Mongolia’s Billion Tree Initiative experience, emphasizing the importance of tax incentives for mining companies and banks involved in landscape restoration. While challenges such as financial sustainability and post-COVID recovery remain, Mongolia is experimenting with regulatory mechanisms such as allowing up to 1% tax deductions for companies contributing to restoration projects to scale up private sector engagement.
• De-risking Investments: Mr. Kenneth Hynes elaborated on the notion of de-risking from an investor perspective. He emphasized that private investors assess both the potential impact and associated risks of investments. He encouraged AFoCO to integrate feasibility studies, market assessments, and trust-building mechanisms into project design to lower perceived risks and attract catalytic capital.
• Strategic Collaboration with ADB: Mr. Sanath Ranawana highlighted the importance of integrating natural capital concepts into financial and development planning. He explained ADB’s approach to upstream assessments, policy-based lending, and the Natural Capital Fund, which can de-risk blended projects. Ranawana emphasized the unique convening and neutral facilitation role that AFoCO can play in aligning governments and MDBs around nature-based solutions.
• AFoCO’s Vision and Role: Dr. Donhwan Kim outlined AFoCO’s evolving role in moving from ODA centric approaches to investment readiness models. He emphasized the organization’s steps in establishing the Climate Action Plan, the FAAF platform, and a localized forest cooperation protocol. He also underlined the recurring theme of the day MRV as essential to build investor trust and project credibility.

Additional insights included:

• Utility and insurance companies were identified as potential early adopters of forest technology, especially for fire detection systems, due to litigation risks.
• The importance of “storytelling backed by verifiable outcomes” was reiterated as a key engagement strategy with family offices.
• Participants noted that true sustainability requires moving beyond short-term funding to long-term institutional mechanisms embedded in national systems.

The session concluded with a shared call for AFoCO to be empowered further by Member Countries to lead blended finance innovation in the forest sector. Many agreed that the Dialogue marked a shift toward more integrated, investable forest finance strategies across Asia.

The Road Ahead: Turning Dialogue into Action

As the 2025 Annual Thematic Dialogue drew to a close, AFoCO reaffirmed its strategic ambition: to evolve from a project implementer into a platform that unlocks capital, technology, and partnerships for nature-based forest solutions in Asia. In a final panel discussion moderated by the Economics of Mutuality Alliance, speakers from ADB, Artha Networks, ADB, Mongolian Forest Agency, and the AFoCO Secretariat echoed a shared urgency: blended finance is no longer optional it is essential. Concrete takeaways emerged:

• A dedicated Task Force Team of AFoCO Secretariat will be formed to scale investable project pipelines and structure blended finance models.
• The AFoCO Secretariat will embed PES, carbon finance, and private-sector engagement into the project development cycle.
• Member Countries were called upon to launch national-level dialogues and enhance readiness to attract climate investment.
• The FAAF platform will serve as the ecosystem to connect local initiatives with global capital and knowledge partners.

Importantly, the need for transparent, verifiable impact through MRV systems was highlighted as a recurring theme, critical to building investor trust and ensuring accountability. The 2025 ATD was not just a forum for ideas—it marked a turning point in AFoCO’s journey to bridge ambition with action, and to reimagine the future of forests through investment, innovation, and regional cooperation.

Submitted by Kiwon Kim, Program Officer, Capacity-Building and Evaluation Team