NATURESCOT, Scotland’s nature agency, has announced a potential £2billion of funding to restoration of native woodland on a landscape scale in partnership with private finance investment.

A Memorandum of Understanding is now in place between NatureScot and financial partners and if progressed the fund could created 185,000 hectares of native woodland, an area bigger than south Lanarkshire. NatureScot claim it would sequester the equivalent of 28 million tonnes of CO2 in the next 30 years.

The partnership with UK private bank Hampden & Co, Lombard Odier Investment Managers and global impact firm Palladium is a ‘national first’ in ambition and scale, and an important step in positioning Scotland as a world leader in nature restoration through natural capital investment.

The first pilot scheme will begin spring 2023. It is centred on the upper catchment of the River Tweed in Southern Scotland and will build on momentum already generated by the Wild Heart Borders Forest Trust project. The initial scoping assessment has identified the potential for around 30,000 hectares of new native woodland in the heart of Southern Scotland with the potential for between £200 and £300 million of private investment and around 6 million tonnes of carbon sequestration.

Biodiversity Minister, Lorna Slater said: “The finance gap for nature in Scotland for the next decade has been estimated to be £20 billion. Leveraging responsible private investment, through valuable partnerships like this, will be absolutely vital to meeting our climate targets and restoring our natural environment. Scotland is well placed to take a leading role by offering investors the opportunity to generate sustainable returns from the restoration and regeneration of our landscapes. This investment will generate multiple benefits: ending the loss of biodiversity, improving water quality, reducing the risk of flooding, regenerating local communities and creating green jobs.”

Andrew Sutherland, director of Nature-Based Solutions at Palladium, said: "Palladium works globally to restore nature with private finance in a way that leaves no-one behind. We’ve catalysed over US$1 Billion over the past 5 years and impacted 4 million hectares of landscapes in need, and now we’re transferring what we’ve learned to fighting the twin crises of climate change and nature loss here in the UK.”

Head of climate and environmental solutions at Lombard Odier Investment Managers, Lorenzo Bernasconi, said: “Scotland has shown international leadership in recognising the importance of investment into natural capital, as part of its commitment to a just transition to net zero. The investment gap to deliver on these nature related outcomes is estimated to be well above £15 billion for the current decade, requiring new public and private partnerships for mobilising capital at scale. We look forward to bringing our expertise and collaborating with these partners to deliver on this vision, while supporting local communities and a high-integrity market for private investment into nature.”

The focus will be on creating new and, in some locations, productive woodlands. The carbon credits produced will only be sold to UK companies.