The Malaysian government is to issue agricultural bonds worth up to US$533m to fund forest replanting covering 375,000ha.
The government decided to issue the 15-year bonds because of private sector resistance to forestry investment.
Fast-growing trees species will be planted so commercial timber can be available when the bonds reach maturity.
About a tenth of the money will be used for planting in 2006.
Major tropical hardwood producer Malaysia currently supplies 4.5 million m3 of timber annually, but demand is about 5 million m3.
