We are often asked what is the potential to invest in forestry or forestry for conversion land and then rezone the land to development to make a profit on its future sale. This process is easily doable in Anambas, you will just need to follow the process precisely, and above all, be patient!

SUMMARY

• In terms of ROI – In our experience the value of development zoned land is approximately 3 to 5 times the price of HPK land (HPK stands for “Hutan Produksi Konversi,” which translates to “Conversion Production Forest.”).
• The cost of rezoning (if so approved) is approximately US$50,000 to US$100,000, depending on land size and location.
• The time to rezone is 12 to 18 months.

CONTEXT for APPROVALS

For context the concept of HPK land was introduced as part of Indonesia’s forestry sector development. It involves converting certain forested areas to support economic development activities, such as agriculture, plantation farming, or industrial projects. The intention behind HPK land is to balance the country’s conservation efforts with the need for economic growth and development.

The conversion of HPK land requires proper permits and compliance with environmental regulations. The Ministry of Environment and Forestry in Indonesia oversees the management and utilization of HPK land. The conversion process involves a series of assessments, environmental impact studies, and permits to ensure sustainable land use practices and minimize negative impacts on the environment.

RECENT CHANGE to PROCESS

A recent change in the Anambas province is that land development used to be permitted while the rezoning process was occurring. In September 2022, we were advised that the rezoning process would only be considered in future if the land was not in the process of, or partially, developed. Therefore it is of critical importance that the land remains largely untouched during the rezoning process. Clients will still do all preparatory works (LIDAR, master planning, architectural works etc), but the commencement of on site works must be suspended until after approval is granted.