Backed by development finance agencies of the UK, Norway and Finland, the African Forestry Impact Platform also announced its first acquisition.
The African Forestry Impact Platform (AFIP), run by global forestry fund manager New Forests has secured $200m joint investment from the British International Investment (BII), its Norwegian counterpart Norfund and Finland’s Finnfund.
The investment follows a pledge made by the international development agencies during last year’s COP26 climate change conference to work together to scale and transform sustainable forestry sub-Saharan Africa.
AFIP aims to raise an additional $300m in the next two to three years, and it will focus on four key areas of impact: climate change mitigation, biodiversity conservation, gender and diversity, and community and livelihoods.
“Africa has growing economies and rising timber demand but is also home to some of the world’s most biodiverse forests”, David Brand, CEO of Sydney-based New Forests, said. The new platform “will expand the plantation forest sector while seeking to also support forest conservation, restoration of degraded land and expansion of community-based forestry programmes”.
AFIP also announced its first acquisition. It will buy Green Resources, the biggest forestry and wood processing company in East Africa, with 38,000 hectares of plantation forest in Tanzania, Uganda and Mozambique, for an undisclosed sum.
Seventeen percent of the world’s forests can be found in Africa, according to the website of the Food and Agriculture Organisation (FAO). Around 60 million Africans are directly dependent on these forests and 60% of the population on the African continent are indirectly dependent on them.
Although forests and landscapes protect wildlife from natural disasters and are hugely important for various essential products and services, including fuel, shelter, and food, the continent has lost 4.4 million hectares of forest per year between 2015 and 2020, according to the FAO.
“Sustainable forestry is one key way to curb deforestation as well as climate change,” said Jaakko Kangasniemi, chief executive officer of Finnfund. “In addition to the benefits to nature and climate, forestry can significantly contribute to people’s livelihoods – particularly in Africa. The forestry sector in Africa has enormous growth potential and by partnering with fellow development financiers and New Forests, we believe we can together bring the change needed to unlock that potential.”
Clarisa De Franco, managing director & head of private equity funds at BII, said her organisation was “proud to be part of this partnership to launch a permanent capital vehicle that will increase funding for nature-based solutions, increase the supply of sustainable wood, restore natural capital while also boosting jobs within rural communities”.
Partnerships for Forests, a UK Foreign, Commonwealth & Development Office funded programme, will be offering AFIP technical assistance, including developing business models that provide “tangible returns to investors, delivering social and environmental value to smallholders and other landscape stakeholders”.