Investment Opportunity : 150,000,000 USD
Organization : International Woodland Company

The global community is looking for ways to achieve climate resilient sustainable development, and investing in forests has been identified as one of the best ways to reduce global GHG emissions, and keep global warming below 2 degrees. At the same time, wood consumption in Sub-Saharan Africa (SSA) is exceeding the supply of both plantation and natural forests, and demand is growing steadily at 5-7% per year, unmatched by stagnant new forest development. SSA presents excellent tree growing conditions, has significant area of land available for such, and is low cost compared to other parts of the world. Unfortunately greenfield plantation forestry in SSA attracts very little capital. What is lacking is a professional and integrated forest management approach that removes the barriers to greenfield forest investment, provides climate change adaptation and mitigation objectives, a sustainable long-term wood supply, and overall forest landscape restoration; providing for long-term environmental and social benefits. Investing into forests in SSA presents investors with a unique opportunity to achieve risk adjusted market rate returns, while addressing some of the largest global challenges of our time.

The Fund will build on IWC’s 25+ years of experience in plantation establishment and timberland investment execution ensuring that IWC’s un-paralleled information access to global best practices is transferred and applied. The fund will seek a blended finance structure to support market rate returns for early value chain forestry investments. Carbon PES, sponsored by multi-lateral funding will bridge the financial gap between the establishment phase and the income generating harvest phase. Additionally, multi-lateral funding will also be sought in the form of a grant facility to cover non-commercial FLR activities (ie. natural forest restoration, alternative livelihood development, mosaic land-use development, training and input provision, etc.) within the model. Bringing a PES scheme and FLR facility sponsored by multi-lateral funds, will ensure that FLR services that are generated from the model are retained in the investment project geographies and are not sold-off to rich countries as an offset to their carbon footprint. These multi-lateral funds will also assist in offsetting the excessive costs and risks associated with greenfield forest establishment that act as a barrier to attracting private institutional capital. Applying this FLR model will ensure the delivery of long term sustainable commercial, climate and social returns.