JAKARTA: Rubicon Carbon, a company backed by TPG Inc’s Rise Climate fund, will finance carbon credit projects in Indonesia as the South-East Asian nation aims to accelerate supply and strikes trading deals with other countries.

Indonesia’s government has formed a co-investment partnership with Rubicon Carbon that will combine public and private capital for so-called blue carbon deals through a dedicated vehicle, Marine Affairs and Fisheries Minister Sakti Wahyu Trenggono said in a statement to Bloomberg News.

“Indonesia is committed to unlocking the full potential of its blue carbon economy while ensuring that coastal communities remain at the centre of its development,” Trenggono said.

Blue carbon projects are typically focused on the sequestration of carbon dioxide by coastal ecosystems, like mangroves or salt marshes.

Under the collaboration, Indonesia’s government will support projects with land access, permitting and assistance in engaging with local communities.

No financial details were disclosed.

Additionally, a spokesperson for Rubicon Carbon declined to comment on the specifics of the co-investment partnership.

“The first stage of the partnership, which is expected to deliver Indonesia’s biggest blue carbon mangrove restoration initiative, will cover up to 70,000 ha (172,974 acres) along the northern coast of Java and has the potential to be expanded if an initial pilot is successful,” Trenggono further added.

President Prabowo Subianto previously set out an ambition to generate billions of dollars in revenue from carbon credits and has taken policy steps to revive the sector.

The country was among Asia’s largest suppliers of voluntary credits before exports were restricted in 2022, as the previous government reviewed the role of domestic offsets in meeting the nation’s own climate goals.

Run by former Bank of America Corp executive Tom Montag, Rubicon Carbon was established to facilitate and profit from an anticipated boom in carbon markets in response to the worsening climate crisis.

Touted by advocates as an indispensable solution in a world aiming to reach net zero emissions, the market has stalled in recent years amid a string of scandals and corporate backtracking on emissions goals.

“Indonesia has an extraordinary opportunity to become a global leader in blue carbon,” Montag said last month in a LinkedIn post on Rubicon Carbon’s account. — Bloomberg