We’re exploring how private funding can support Scotland’s rainforest restoration. Led by Argyll Countryside Trust (ACT) on behalf of the Alliance for Scotland’s Rainforest (ASR), this project was made possible by the National Lottery Heritage Fund’s Facility for Investment Ready Nature in Scotland (FIRNS) grant scheme.

Watch our film to hear the Project Working Group talk about their insights:

Why it matters

Scotland’s rainforest covers roughly 18,500 km² along the west coast, but only 30,000 hectares of core rainforest remain in small, fragmented patches. These habitats face threats from:

• Non-native invasive species such as Rhododendron ponticum
• High levels of grazing by deer and other herbivores

ASR’s goal is to restore all of Scotland’s rainforest by 2045, linking existing areas and doubling its size.

Existing public funding isn’t enough. There’s a £500 million funding gap to achieve large-scale restoration, that’s where private investment comes in.

How we're making it happen

   

Project Standards

We created standards to ensure restoration projects deliver outcomes for climate, nature, and communities. They provide a clear benchmark for project developers and reassure financial partners that their investment supports high-integrity, evidence-based projects.

Read the Project Standards

Integrity Charter

The Integrity Charter ensures that investors and buyers of ecosystem services are ethically, environmentally, and socially aligned with rainforest restoration. It sets out due diligence criteria on net zero, human rights, fair work, and responsible lobbying, protecting against greenwashing and strengthening public trust.

Read the Integrity Charter

Business model and governance

Working with Palladium, Sylvestris Land Management and financial advisors at Safferys, we’ve developed a scalable business model and governance structure to guide investment in rainforest restoration. 

Read the Final Report: Saving Scotland's Rainforest with Natural Capital Finance

Photo by Ian Dow/ACT

The model generates revenue via the sale of woodland carbon units, validated under the Woodland Carbon Code from new native woodland designed using the Project Standards and strategically located to connected fragments of existing rainforest. The revenue is used to cover the cost of creating new woodland, restoring existing rainforest via deer management and rhododendron removal, making payments to landowners, delivering benefits to local communities and repaying investors.

Through the FIRNS project we piloted the model in South Knapdale, establishing the costs of restoring its 2,470ha of existing rainforest while creating and managing 2,800 of new, connecting, native woodland for 40 years at ~£52M. Government grants are available for new woodland creation, which for the pilot area would total ~£10M, leaving a gap of £42M which needs to be funded by private finance.

The project established the best governance structure to oversee the design and delivery of new woodland creation, rainforest restoration and community engagement as being a joint venture between ACT (or, for other project locations, another ASR partner or local anchor organisation), a specialist woodland carbon project developer and any investors. It was established that the most appropriate entity for the JV, balancing risk, tax and management considerations was a Limited Liability Partnership, or LLP.

Finance can be provided through either the up-front sale of carbon credits (Pending Issuance Units, or PIUs), or equity investment – or a combination of both. Where funds are raised via the sale of PIUs, the JV would hold those funds to cover the costs of the project throughout its lifetime. To raise enough capital to fund the project via up-front credit sales, PIUs would have to be sold for £68 each. The average price for PIUs in 2024 was £26.85.

 An equity investor provides finance to cover project costs, owning a share of the project in return, being paid back later via the sale of verified units (Woodland Carbon Units , or WCUS). To provide a 7-8% return (or IRR) to an investor over the project lifetime, WCUs would have to be sold at an average of £143 each. The Project Report sets out in detail the carbon pricing assumptions used in the model.

Photo by Ian Dow/ACT

Want to know more? 

If you’d like more information, have questions, or are an investor or buyer of ecosystem services interested in supporting the restoration of Scotland’s rainforest, please get in touch with [email protected]. 

All photos, including the banner, by Ian Dow/ACT

About the Facility for Investment Ready Nature In Scotland (FIRNS) 

The Facility for Investment Ready Nature In Scotland (FIRNS) is delivered by NatureScot in partnership with National Lottery Heritage Fund.

The projects will make a key contribution to helping grow the use of responsible private investment and market-based mechanisms to finance the restoration of Scotland’s nature, while bringing benefits to communities.

These will be undertaken by a range of organisations, frequently working in partnership, and including private individuals and companies, community organisations, charities and trusts, and public bodies. 

About the National Lottery Heritage Fund 

Using money raised by the National Lottery, we inspire, lead and resource the UK’s heritage to create positive and lasting change for people and communities, now and in the future. 

Read more on the Heritage Fund website.

• Follow @HeritageFundUK on Twitter, Facebook and Instagram and use #NationalLotteryHeritageFund 
• Follow our Scottish accounts @HeritageFundSCO on Twitter and @HeritageFundScotland on Facebook

Each week, National Lottery players raise £30 million for good causes across the UK.