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Impact Fund Denmark invests in sustainable forest management in East Africa

Impact Fund Denmark invests DKK 160 million (USD 25 million) in New Forests Company (NFC), a forest company with operations in Uganda and Tanzania. The investment will expand plantations and build new plants to produce wood products locally in East Africa. 

Expanding sustainable forestry and local production

Africa plants too few commercial forests to keep up with the increasing demand for wood. This increases pressure on natural forests and makes the region dependent on imported timber products. In East Africa alone, the trade deficit in timber products was around DKK 80 billion (USD 12.6 billion) from 1991 to 2020. Much of the wood could otherwise be grown and processed locally. This means that jobs, taxes and value creation today end up outside the continent.

NFC is working to reverse this trend. The company operates FSC-certified plantations and today produces electric poles, sawn wood and pallets for regional customers. With Impact Fund Denmark’s investment, the company will expand the forest area from 30,000 to 100,000 hectares. About half of the area (50,000 hectares) is devoted to nature and biodiversity through the restoration of former natural forest areas. The new production facilities will produce plywood and glulam products, which are largely imported today.

Climate impact and long-term development effects
The forest sector in East Africa is a growing sector, and at the same time the investment binds millions of tonnes of CO2 and generates income for thousands of local families. The investment will create a more independent Africa. This is exactly the type of investment we aim to make.

Lars Bo Bertram, CEO of Impact Fund Denmark

Plantations are expected to bind around 12 million tonnes of CO2 over the lifetime of the investment, and the climate credits generated are certified to the latest international standard.

The investment is supported by EDFI Carbon Sinks, a guarantee scheme managed by EDFI Management Company and financed by the EU under the EFSD+ programme as part of the EU Global Gateway strategy.

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