AFRICA FORESTRY FUND II LIMITED
Status: Approved investmentWhy disclosure?
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In case of questions, please contact us at disclosure@fmo.nl
Disclaimer
The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.
Who is our customer
The Africa Sustainable Forestry Fund II (ASFF II) is a private equity fund that seeks to continue the strategy as implemented by ASFF I i.e. acquiring/developing attractive assets across the forestry value chain in Africa, from plantations to industrial operations. Key objectives of ASFF II are to produce high-value building materials that are currently imported and to implement tailor-made biomass energy solutions. ASFF II will capitalise on the investment team’s experience, network and platform to acquire and improve the management of FSC certified plantation assets and develop downstream manufacturing operations to produce forest products needed to meet demand driven by increased urbanisation and accelerating economic growth in Africa.
What is our funding objective?
FMO intends to fund this investment as part of this strategic effort to reach its own GHG goals while realising an acceptable risk-return level. It has been well documented that investing in (commercial) forestry and forestry related activities contributes significantly - and most efficiently - to the GHG targets. Also, forestry generates more than average (rural) employment than other productive industries.
Why do we fund this investment?
The projected investment cost relative to the projected average annual carbon sequestration/offset is lower for forestry and biomass steam investments than for the majority of CDM project types. FMO in its recently launched Strategy 2025 has prioritised (amongst others) to further develop the knowledge in forestry and selectively invest in this sector in view of the SDG’s selected to which forestry contributes significantly (8 and 13: job creation and CO2 sequestration).
What is the Environmental and Social categorization rationale?
ASFF II is scored Cat. A under the assumption that 1/3 of the portfolio (may) consist of large scale agriculture (forestry) projects alongside the two other focus area’s wood product manufacturing and biomass-to-energy. The Category A or “high risk” profile of the Fund is related to projects of potential expansion of plantations the Fund might invest in. In those cases risks related to land rights are sensitive and should be thoroughly investigated and mitigated. For forestry projects in general, topics like Occupational Health and Safety, Stakeholder Engagement and Community Development should have high priority. ASFF II’s Environmental and Social Management System (ESMS) has proven strong and effective in managing these and other topics in past investments. An ESMS can never be static and should develop continuously: FMO will play a supporting role in doing so. The fact that all investments will be FSC certified and will be compliant with IFC PS, provides FMO with additional comfort that environmental and social risks will be well managed.
More investments
| Date | Total FMO financing |
|---|---|
| 12/21/2017 | USD 10.00 MLN |
Sub investments
Disclaimer
This data is updated annually so some investments might no longer be in FMO’s portfolio, while some newer investments may not yet be shown.
| Name | Country | Region | Sector |
|---|---|---|---|
| Merensky Timber (Pty) Ltd | South Africa | AFRICA | Agri, Food and Water |
- Region
- Africa
- Country
- Africa
- Sector
- Agribusiness, Food & Water
- Effective date
- 12/21/2017
- Total FMO financing
- USD 10.00 MLN
- Funding
- Building Prospects
-
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk
Environmental & Social Category
(A, B+, B or C) - A