A critical need for restoration finance
Achieving global forest restoration ambitions, such as the Bonn Challenge goal to restore 350 million hectares by 2030, comes with a hefty price tag: estimated at around USD 1 trillion. With public budgets strained and foreign aid flows insufficient, many are looking to the private sector to close the financing gap. Nowhere is this more urgent than in low- and middle-income countries (LMICs), where degraded forestlands are widespread and financial resources are limited.
Despite growing interest, private finance for forest restoration (FR) remains more a trickle than a flood. One reason? Investors aren’t just seeking places where trees can grow—they are looking for places where trees can grow profitably, securely and sustainably. While previous research has focused on mapping where restoration is biophysically possible, fewer have asked: are those same areas attractive to private investors?
Mapping viable investment opportunities
Most research on restoration opportunities has focused on biophysical potential, mapping degraded forestlands where restoration could occur from an ecological perspective. However, private investors need more than just trees: they need a compelling business case.
This study is among the first to systematically assess where biophysical potential overlaps with the conditions required for viable private-sector investment. We focused on two types of private investors:
- Wood market investors, seeking returns from timber, fuelwood and other wood products.
- Carbon market investors, pursuing returns via carbon credits from afforestation, reforestation and natural climate solutions (NCS).
To determine how much of the world’s restoration potential is truly investable, we assessed six to seven critical conditions that affect revenues, costs, and risks. Crucially, we also asked whether areas with high investment potential align with global restoration priorities such as biodiversity conservation and climate mitigation.
Drawing on spatial datasets with roughly 1 km resolution, we analyzed 115 LMICs, applying these two core scenarios. For each, we identified degraded forestlands and assessed investment readiness, across key investment conditions, including:
Base and NCS scenarios. Image by CIFOR-ICRAF
- Tree growth rates (for wood)
- Potential carbon sequestration (for carbon markets)
- Market access
- Restoration costs
- Parcel size (economies of scale)
- Property rights security
- Country risk factors
We then filtered out areas unlikely to attract private investment, such as high-value agricultural lands and protected areas, focusing instead on landscapes where private-sector actors might realistically step in.
A spatially explicit investment lens
Our analysis builds on the se.plan tool, developed by FAO and partners, which integrates diverse geospatial datasets related to restoration potential. For every 30-arcsecond (~1 km) pixel of land, we ranked investment conditions and tallied how many were favourable. For example, a site with low restoration costs and strong market access but high political risk would score lower than a site meeting all criteria.
We also compared countries’ Bonn Challenge commitments; targets they’ve pledged to restore forestlands against our estimates of areas that are realistically investable. Finally, we examined whether areas favourable for investment also offer co-benefits such as biodiversity conservation and local livelihood enhancement.
se.plan is a free online tool in the Open Foris suite (SEPAL system) that helps identify forest restoration areas which offer the greatest benefits. Targeting 139 LMICs, it supports decision-making by letting users filter potential sites by biodiversity, carbon, livelihoods and wood production. Users can refine results using biophysical, forest cover, and socioeconomic filters, displaying outputs via interactive maps and dashboards.
Methods for Analysis. Image by CIFOR-ICRAF
Where investment conditions fall short
The headline takeaway? Only a small fraction of restorable forestland in LMICs is genuinely attractive to private investors under current conditions.
In the base scenario, about 53% of restorable land had at least four favourable investment conditions. Less than 1 % had all seven. In the NCS scenario, only 33% of restorable area met at least four favourable conditions, again with less than 1% meeting all six. A sobering reality: restoration potential far exceeds investment potential. This suggests that more than half of the world’s degraded forestlands are unlikely to attract the crucial private investment required.
Hotspots (and coldspots)
Investment hotspots are concentrated in upper-middle-income countries like Brazil, China and South Africa, with low-income countries, where restoration needs are often greatest, lagging far behind. One encouraging insight: areas with strong investment potential also tended to offer significant local livelihood benefits, such as higher employment in the forest sector.
However, potential global environmental benefits like carbon sequestration and biodiversity gains were not consistently aligned with investment hotspots, especially in the wood-driven scenario.
This creates a paradox: the countries with the greatest need for restoration finance (low-income nations) are often the least equipped to attract private investors.
Why policy still matters
Our analysis suggests that many national restoration commitments under the Bonn Challenge are unlikely to be met through private investment alone. More than half of the LMICs we studied have made commitments that outstrip the land area realistically attractive to private investors.
This underscores a critical point: private investment cannot replace public policy and funding. It must complement them.
Governments play a vital role in improving the underlying investment environment, for example by: Enhancing market access (e.g., investing in roads and infrastructure), Reducing investment costs (e.g., offering tax incentives or restoration subsidies), Strengthening land tenure and property rights to provide investors with security, fostering demand (e.g., promoting wood use in public procurement).
While private finance is often geared toward profit-making ventures (like timber production), public-sector or blended finance solutions remain essential for ensuring that restoration also delivers global public goods, such as biodiversity conservation and climate change mitigation.
A path for future research
We see this study as a starting point for more tailored, investor-specific analyses. One next step is to refine how investment attractiveness is measured by weighting different factors based on investor surveys and segmenting results by investor type (e.g., impact investors vs. traditional forestry firms). Another priority is improving data, especially around the costs and benefits of restoration at finer scales. Updated datasets on implementation costs, carbon benefits, and market dynamics would all strengthen future assessments.
A call for integrated solutions
This study highlights a sobering, but important reality: while forest restoration offers enormous potential for environmental and social benefits, unlocking private investment at scale requires much more than identifying degraded lands. Investors need a robust enabling environment, clear land rights, good infrastructure, market incentives, and manageable risks. These conditions are currently met in only a limited set of countries and regions. The road to scaling forest restoration is a shared one: private finance, public policy, and local community leadership must move forward together, combining smart policy with targeted investment to turn fragmented prospects into a coordinated restoration economy that benefits people and planet alike.
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