The Norwegian, British and Finnish development finance arms have put $200 million into an African forestry fund, the organisations said on Wednesday, as part of a plan to invest in sustainable tree businesses in the region.
Norfund has put $76 million, British International Investment (BII) $75 million and Finnfund $48 million into the African Forestry Impact Platform (AFIP), a fund run by Sydney-based forest investor New Forests. The investment follows a pledge by the three development finance institutions to scale up Sub-Saharan Africa's sustainable forestry sector made at last year's COP26 climate change conference, as policymakers gear up for this year's COP27 in Cairo next month.
Deforestation from the forest, land and agricultural industries contributes about 11% of annual global greenhouse gas emissions, according to the Intergovernmental Panel on Climate Change. Getting companies in these sectors to curb emissions is seen as crucial to limiting climate change.
New Forests, which said in May it was being acquired jointly by the Japanese companies Mitsui and Nomura, said it plans to raise a further $300 million for the African forestry fund in the next two to three years to invest in other plantation owners and related companies.
Its fund is also making its first acquisition, Green Resources, a forestry and wood processing company with 38,000 hectares of pine and eucalyptus plantations in Tanzania, Uganda and Mozambique, New Forests said in a statement.
The purchase, for an undisclosed amount, is subject to approval by Tanzanian regulators and expected to be completed by December, the statement said.
