New Forests, 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’s first acquisition, Green Resources, East Africa’s largest forest development and wood processing company, was also announced.
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.
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 various essential products and services, including fuel, shelter, and food. However, the UN’s assessment found that in Africa, four million hectares of forests are disappearing yearly – conservation and restoration are crucial for inclusive adaptation and building resilient and sustainable ecosystems.
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 programs. As an open-ended investment vehicle AFIP will help to create and perpetuate sustainable landscapes that can balance conservation and production systems.”