Deal #8058

First contract signed in 1990. The proposed funding will be used for capital expenditure of the plywood mill and expansion of plantations from 3,540 ha to 7,000 ha by the end of 2019. In June 2020, The Ministry of Agriculture and Forestry has issued a Certificate of Approval of a Feasibility Study for development of another 60, 000 hectares. The study will be looking at 3 forest production areas in the provinces of Vientiane and Xaiyaboury. [Source: Burapha Company’s website] In March 2022, the company and government of Laos signed the agreement on amendment and increase of the concession area of 60,000 ha in Vientiane province and Xayabouly province to the concession agreement on Industrial Tree Plantation Project in the National Production Forest Areas of Vientiane province that dated 31st of July 2020. [Source: Vientiane Times (Lao language)] In 2020, the Government of Lao PDR granted land concessions to Burapha for 2,000 hectares of “unused land” in the National Production Forest Areas in Vientiane province for a 50-year concessional period. This is the first step of Burapha’s 60,000 hectares expansion plan [Source: company website] In 2023: 6,000 ha on production forest area (PFA), 15,000 ha in farmer cooperation agreements, 800 ha company land (bought from other companies), 7 village cooperation agreements (calculated here under assumption with 500 ha each), and 4,000ha concessions in non-PFA. [Source: company interview]

Timber plantation in Agro-Forestry system The company got the funding from FMO (the Dutch Development Bank) for building the plywood mill and expansion of plantations from 3,540 ha to 7,000 ha by the end of 2019 [Source: FMO, 2018]. In 2019, UNIQUE Consultants (Germany) was commissioned to steer the company through carbon certification with the Verified Carbon Standard (VCS). The certification process is expected to be completed in 2021 after which Burapha credits can be purchased by companies and organizations looking to offset their carbon footprint. [Source: Company Annual Report 2019] In 2020, about 9,800 ha were part of the carbon offsetting project. There the company also offers intercropping and grating. [Source: VSF registry]. In Hinheub village, the Burapha Agroforestry project contracted local households to clear areas of fallow and bamboo within the concession, with each household then responsible for plantation management (including planting, thinning and maintaining trees) in these areas, with the additional option of intercropping. [Source: Barney et al., 2018]

BAFCO has acquired the land from the village and individuals and is based upon a 30-year concession agreement with a 20-year extension while the concession with the Government of Laos is a 50-year concession with 25 year extension [Source: Phimmavong et al. 2019]

In 2011 Burapha Agro-Forestry was acquired by Silvicapital through their subsidiaries SilviLao AB and Bafco AB. Original contract was signed in 1990.

The IFC is collaborating with Burapha Company to implement the Upstream Project on a third-party Environmental and Social (E&S) Upstream Level Study (the “E&S Study”) to identify and assess E&S risks and impacts associated with the company operations when assessed against the IFC Performance Standards (IFC PSs), World Bank Group Environmental Health and Safety (WBG EHS) and other Good International Industry Practice (GIIP), suggesting methods to bridge identified gaps. The project is expected to enhance the forestry sector’s long-term sustainability and unlock key barriers to higher value wood processing in Lao PDR, which will catalyze forestry investment opportunities in the country [Source: EWS, 2021]. 1,315 ha of industrial tree plantation area under Burapha company have now been certified by FSC. [Source: Thankhao (2021)] Currently Burapha has the right to develop 10,000 hectares, out of which 5,300 hectares are planted after year 2020 planting season. [Source: Burapha Company’s website] As of 2024, media reports (see: https://news.mongabay.com/2024/04/land-tenure-lesson-from-laos-for-forest-carbon-projects-commentary/) state that Burapha Agro-Forestry has no longer been able to run the business since the end of 2023. The project is considered to have failed, due to land tenure issues, financial difficulties, and lack of investor interest.

In Phonmuang village in Hinheap district, the company pays 1,000,000 kip/year (about 50 USD at the time) with a 30 year land concession On production forest areas (PFA) which are going to be the largest part in the medium term, villages do not get a lease because they legally have no right to the land. Instead, the company offers: o 40,000 LAK / ha / contract to the village cluster (group of a couple of villages) (they call this a fund, not a fee) o 80,000 LAK / ha / contract to the village o 80,000 LAK / ha / contract to the district - in non-PFA areas affected people reported lump-sum payments of around 3-3.5 mio. LAK per ha (one-off payment) [Source: stakeholder interviews]

In accordance with Burapha’s Outgrower Scheme Policy, Burapha will provide opportunities for communities and individuals to establish their own plantations in collaboration with Burapha [Source: buraphawood.com] The estimated 500 ha are a trial area. [Source: company interview]