A partnership with Australian company New Forests at the helm will take over Norfund investee Green Resources as the first acquisition in plans to scale sustainable forestry in Sub-Saharan Africa.
At COP26 in Glasgow Norfund, British International Investments and Finnfund announced a new partnership called The African Forestry Impact Platform (AFIP). Managed by Australian investment company New Forests, the partnership aims to scale up sustainable forestry in Sub-Saharan Africa, with the aim of raising 500 million USD over the next the next two to three years.
The partners have now signed subscription agreements for their investment in the fund for US$200 million, and announced AFIP’s first acquisition, Green Resources, East Africa’s largest forest development and wood processing company. After a challenging period for the company, Norfund and Finnfund became the majority owners of Green Resources in 2019. Since then, the company has turned a large deficit into positive results.
“We are very satisfied with the results of this challenging but successful turnaround. With a new owner that can bring both capital and competence, we can create more jobs and a positive impact on the climate”.
Tellef Thorleifsson, Norfund CEO
Scaling sustainable forestry in Sub-Saharan Africa
Norfund and Finnfund will reinvest the capital from the sale of the company into the new platform, which will also receive fresh capital from the other partners.
“Norfund has extensive experience with partnerships in both energy and finance where we have used capital and competence from various actors to garner bigger results than each actor could have achieved on their own. Now we are confident that we can do the same in sustainable forestry”, says Thorleifsson.
The partnership will invest in sustainable forestry in Africa where the approach combines protection of existing natural forests alongside responsible extension of productive working forests and forest restoration in the region.
Facts: forests in Africa
- 17% of the world’s forests are in Africa (636,639,000 hectares)
- Around 60 million people are directly dependent on these forests; over 60% of the population on the African continent is indirectly dependent on them.
- Between 2015 and 2020 Africa lost 4.4 million hectares of forest per year
- Forest conservation is crucial for meeting some of the biggest challenges humanity faces: climate change, food security, and protection of biological diversity
- Deforestation increases the effects of climate change
- Desertification affects 45% of Africa’s landmass
Source: Review of forest and landscape restoration in Africa 2021, FAO and AUDA-NEPAD, 2021