The Climate Smart Fund (CSF)
The Climate Smart Fund (CSF), designed by Abler Nordic and implemented in Indonesia by PlanB, is a pioneering blended finance initiative supporting independent smallholders in sustainable palm oil replanting while reducing deforestation and improving rural livelihoods. It aims to demonstrate how climate finance can be used to drive systemic transformation in one of the world’s most complex and high-risk agricultural sectors.
The CSF uses a phased, scalable model, with an eventual fundraising target of USD 100 million. The **first phase—capitalized with USD 10 million from the Norwegian Government—**focuses on demonstrating proof of concept through partnerships with local cooperatives, offtakers, and financial institutions in Sumatra and Sulawesi.
The fund’s key innovation lies in combining financial de-risking with technical support to smallholders and cooperatives. The fund provides concessional capital, credit scoring tools, training, and legal support to help smallholders qualify for commercial loans.
To date, the CSF has:
- Reached over 6,000 smallholder farmers,
- Trained 4,000+ farmers in sustainable and climate-smart agricultural practices,
- Supported 18 cooperatives with capacity building and financing preparation.
At the heart of CSF’s approach is participatory village planning, which ensures that interventions are tailored to the specific needs and priorities of each community. PlanB leads a structured village-level process combining:
- Baseline assessments on land use, tenure status, and socio-economic conditions,
- Community consultations to align replanting, restoration, and protection zones,
- Custom plans that integrate replanting with traceability systems, legality support (e.g. land titling), and access to finance.
This process strengthens local governance, enhances community ownership, and ensures that palm oil replanting efforts are not only financially viable but also socially inclusive and environmentally sustainable.
The next phase will focus on expanding the pipeline, mobilizing additional investors, and preparing the legal and operational structure for long-term scale-up, targeting a transition from concessional finance to mainstream investment channels.
