Finnfund, the Finnish development financier and impact investor, has signed a 15 million US dollar loan agreement with Toucan Forestal Panama S.A. (“Toucan Forestal”), an impact focused forestry company managed by global emerging markets and real assets investment manager The Rohatyn Group (TRG).
The investment supports Toucan Forestal’s afforestation, restoration, and conservation operations in Panama’s Darién region, one of the world’s most fragile and biodiversity‑rich ecosystems.
Finnfund’s investment in Toucan Forestal is the first to be assessed comprehensively under its emerging Planetary Boundaries investment framework, demonstrating how rigorous science‑based thresholds can guide capital toward activities that genuinely help keep economies within ecological limits.
“This investment provides a rare opportunity to create real climate and nature impact” said Finnfund’s Investment Manager Peter Chappell. “Beyond reducing emissions, it enables large-scale carbon removal from the atmosphere. Toucan Forestal’s new teak plantations and restored natural forests will sequester carbon for decades, while sustainably managed timber harvests lock carbon into long‑lived sustainable products.”
The loan will be used in part to purchase landholdings containing remnant natural forests to ensure their long‑term protection, while converting ecologically degraded pasture into responsible teak plantations and restoring natural forest where feasible. The financing strengthens Toucan Forestal’s integrated model of commercial forestry combined with conservation and restoration under FSC certification. The project is a joint effort between Finnfund and TRG.
“Toucan Forestal reflects TRG’s long-standing commitment to building institutional-quality forestry businesses in Latin America, including more than 15 years of experience in Panama’s teak sector,” said Erik Kankainen, F&A Partner at TRG. “We believe high-quality teak plantations and natural forest restoration are complementary components of an investment strategy that can deliver measurable climate and biodiversity outcomes. We see significant opportunity to scale this model responsibly across Panama and the broader region.”
“These are straightforward forestry assets that generate income and offer strong collateral. Combined with exceptional environmental value, the financing structure makes this investment both sound and impactful,” said Chappell.
Scale and composition of Toucan Forestal
Toucan Forestal combines established operations with expansion initiatives. Existing assets include more than 1,600 hectares of teak plantations and 1,300 hectares of natural forest. The company is expanding through a greenfield program expected to include 1,500 hectares of new teak plantations and 1,000 hectares of natural forest designated for restoration and long‑term conservation
In aggregate, approximately 40% of all total landholdings will consist of protected or restored natural forest, with operations certified under FSC standards.
Planetary Boundaries: a new lens for investment decisions
Toucan Forestal’s operations directly advance three key planetary boundaries objectives:
- Climate change – through large‑scale carbon sequestration and long‑lived timber products
- Biosphere integrity – through biodiversity net gains in an area suffering rapid deforestation
- Land system change – by restoring degraded land and preventing future forest loss.
Finnfund has developed its Planetary Boundaries investment framework to better understand how investments influence critical Earth‑system processes. The framework has been developed in cooperation with Security Trading.
“This is a critical decade for climate and nature action. Seven of the planet’s nine safety boundaries have been crossed, and investors, too, must take broader account of the environmental impacts of their activities. The less we act now, the greater the destruction and market disruptions we push into the future. The planetary boundaries framework we have developed together with Finnfund enables financing to be directed towards companies in emerging markets that are essential from the perspective of planetary boundaries. We are grateful for the opportunity to collaborate with Finnfund’s experienced impact team and other top experts in the field,” said Anna Herlin, Vice Chair of the Board of Security Trading.
The Toucan Forestal transaction is the first where the framework has been comprehensively applied, confirming strong positive impacts on climate, biodiversity, and sustainable land use.
“Using the Planetary Boundaries framework showed us that this is what real impact investing looks like in forestry: measurable climate benefits, nature‑positive outcomes, and clear evidence that we are operating within ecological limits,” Chappell added.
Local and global benefits
Toucan Forestal delivers wide‑ranging benefits, including:
- Global climate mitigation through carbon removal
- Biodiversity gains through restoring and protecting over 2,300 hectares of natural forest
- Local livelihoods through rural employment and contractor income
- Reduced deforestation pressure in a region where forest loss has been rampant
- Strong environmental and social standards, exceeding typical commercial forestry practices in Panama
