New Forests announces first investors in African Forestry Impact Platform
New Forests, along with its investment partners – British International Investment (BII), Norfund and Finnfund – have signed subscription agreements for their investment in a dedicated African fund, the African Forestry Impact Platform (AFIP), for $200 million. AFIP also announced its first acquisition: Green Resources, East Africa’s largest forest development and wood processing company.
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 $500 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.
David Brand, chief executive officer, New Forests said, “Africa has growing economies and rising timber demand but is also home to some of the world’s most biodiverse forests. New Forests’ new Africa 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. As an open-ended investment vehicle AFIP will help to create and perpetuate sustainable landscapes that can balance conservation and production systems.”
Tellef Thorleifsson, chief executive officer of Norfund said, “As long-term investors in Green Resources, Norfund is pleased that the board and management has succeeded in developing the company into what will now be the core of the new fund focused on developing sustainable growth of the African forestry sector, thereby creating jobs, reducing deforestation, and addressing climate change.”
Jaakko Kangasniemi, chief executive officer of Finnfund said, “Sustainable forestry is one key way to curb deforestation as well as climate change. Investing in responsible forestry companies has long been one of Finnfund’s focus areas. 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 and head of private equity funds at BII 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, 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.”