NEW FORESTS ANNOUNCES FIRST INVESTORS IN AFRICAN
FORESTRY FUND THAT DELIVERS CLIMATE CHANGE BENEFITS

AIM TO RAISE $US500M IN CAPITAL TO GROW SUB-SAHARAN REGION IN NEXT TWO TO THREE YEARS

GLOBAL investment strategist New Forests, along with investment partners British International Investment, Norfund and Finnfund, has signed subscription agreements for investment in a dedicated African fund, the African Forestry Impact Platform for $US200 million.

It also announces AFIP’s first acquisition, Green Resources, East Africa’s largest forest development and wood processing company.

This follows an announcement at COP26 around an intention of these groups to partner to develop investment strategies designed to scale and transform the sustainable forestry sector in sub-Saharan Africa.

AFIP will continue to raise long-term institutional capital to support the sustainability and development of Africa’s growing forestry sector, with the aim of raising $US500 million for the platform in the next two to three years.

AFIP will invest in a portfolio of plantation forestry operating companies and related assets in sub-Saharan Africa, primarily targeting established assets that can be expected to provide stable and predictable cash flows across a diversified set of markets.

Drawing on New Forests’ unique approach to sustainability, AFIP will focus on four key areas of impact – climate change mitigation, biodiversity conservation, gender and diversity and community and livelihoods.

Forests and landscapes protect wildlife from natural disasters and are critical for essential products and services, including fuel, shelter, and food. However, the UN’s assessment found that in Africa, 4 million ha of forests are disappearing each year

New Forests CEO David Brand said Africa had growing economies and rising timber demand but it was also home to some of the world’s most biodiverse forests.

New Forests’ new Africa platform would expand the plantation forest sector while seeking to also support forest conservation, restoration of degraded land and expansion of community-based forestry programs.

“As an open-ended investment vehicle, AFIP will help to create and perpetuate sustainable landscapes that can balance conservation and production systems,” Mr Brand said.

Jaakko Kangasniemi, CEO of Finnfund, said, “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 and head of British International Investment, the development finance institution of the UK government, said “BII is 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 and restore natural capital while also boosting jobs within rural communities.

“Addressing the climate emergency in Africa must include gender-smart actions, and we are thrilled that the fund has committed to invest at least 30% of the value of its portfolio in 2X eligible businesses.

“This will promote inclusive economic opportunities, increase productivity and improve livelihoods across sub-Saharan Africa.”

AFIP has been registered in Singapore as a variable capital company which is an open-ended, permanent capital vehicle. New Forests has had a presence in Nairobi since 2021, and in June that year appointed Paul Ohaga, senior director, Africa, to lead the business.