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, and announced 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 US$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.
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.
David Brand, CEO, New Forests, said, “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 programs. As an open-ended investment vehicle AFIP will help to create and perpetuate sustainable landscapes that can balance conservation and production systems.”
Partnerships for Forests, a UK Foreign, Commonwealth & Development Office funded programme, will work closely with AFIP by offering technical assistance. This includes help to identify and develop business models around target investments to demonstrate a different model of working with plantations that provides tangible returns to investors, delivering social and environmental value to smallholders and other landscape stakeholders.
The Green Resources acquisition is subject to regulatory approval (in Tanzania) and is expected to be completed by December 2022.
