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From cattle pasture to climate forest: Impact Fund Denmark launches new forest investment at COP30

While the world’s eyes are on COP30 in Belém in the Amazon, forests have moved up the climate agenda. The forests of South America are both the lungs of the planet and one of the most effective protections against climate change, but they are also under massive pressure from deforestation and intensive agriculture.

In Paraguay, in the heart of South America lies enormous areas that have been used for cattle grazing for decades. Biodiversity is under pressure, and the climate footprint is massive. Therefore, Impact Fund Denmark invests USD 20m in SA Impact Forestry Fund II (SAIFF II), planting sustainable forests on grassland.

The project covers 44,200 hectares where millions of trees will be planted, while 30% of the area is reserved for nature restoration and protection. Over the next seven years, forests are expected to sequester 8.8 million tonnes of CO2 within the country. At the same time, the project is expected to create more than 1,300 jobs in rural areas of Paraguay.

Forest has become good business

However, forest does not only protect the climate. It has also become good business. Global demand for wood products such as pulp and building materials is steadily increasing, and wood is increasingly seen as a climate-friendly raw material in construction. At the same time, the market for carbon credits is growing explosively, giving forest projects an additional source of income. With an expectation of double-digit returns, SAIFF II shows that investments in forests can deliver both solid financial results and a measurable green effect.

We get a lot of forest for our money. This is a good example of how an investment can deliver solid returns and measurable green effect. We are transforming large cattle pastures into forests, sequestering millions of tonnes of CO2 and creating new jobs. It is development, business and climate action all in one.

Lars Bo Bertram, CEO of Impact Fund Denmark.

In the coming years, Impact Fund Denmark will look for more well-managed forest projects that can help in the fight against climate change and at the same time create solid returns.

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