Africa Sustainable Forestry Fund II

Equity : April 2018

ASFF II is a 12-year closed-end investment fund.

Amount

€ 4,366,800.00

Type of investment

Equity

Development impacts

Local economic growth
Private sector consolidation/innovation
Fight against climate change

Beneficiary locations

Africa: South Africa, Tanzania, Uganda

Investment field

Investment Companies & Funds

Activity

SME Fund - Forestry

Organisation

Africa Sustainable Forestry Fund II

Website

https://www.criterionafrica.com/

Domicile

USA

ASFF II invests in forestlands and forestry-related companies across Sub-Saharan Africa. Its investment strategy is built on three complementary pillars:

Invest in existing sustainable FSC2-certified or certifiable forestry assets with the objective to improve the output;
Invest in sawmills and other downstream forest products processing and manufacturing facilities, hence increasing the supply of wood products with added value to the local markets;
Create value by using the forest residues as biomass for heat and energy generation facilities mostly in partnership with local industrial players.

Management

ASFF II will be managed by Criterion Africa Partners (“CAP”), which counts 9 professionals mainly located in South-Africa, with a wide experience in the forestry sector in Africa and elsewhere. CAP results from the spin-off by the forestry team of the Global Environment Fund (“GEF”), known to BIO through our investment in the well-performing Indian-focused South-Asia Clean Energy Fund (2010).

Development impacts

Local economic growth
This project will be providing additional mid to long-term capital to a clearly underserved forestry sector in Africa.
Private sector consolidation/innovation
Market structuring effects through a novel instrument: No other

players offer long-term equity financing to the forestry sector in

Africa, except predecessor fund ASFF I. Also, the

structuring and financing of biomass projects with industrial offtakers is innovative. This project will increase the interest of investors in the African forestry sector.

Expansion of financing to underserved sector as the forestry sector in Africa is clearly underserved and players face major difficulties to finance themselves.
Fight against climate change
Maintaining and developing sustainable forestry reduces climate change by reducing CO2 emissions. The substitution of heavy fuel through the valorization of the biomass from forests forms also an important component of this project. The sustainable forestry industry leads obviously to a preservation of these natural resources in several countries where levels of deforestation and forest degradation remain high.

Made possible through this investment

Thanks to the direct funding from BIO, the following second-line investments have been made possible.

Bacarac

South Africa

Holding company of Merensky Timber, an integrated forestry group

CMO

South Africa

Providing services and solutions for smallholders across Africa to obtain FSC certification

Form Ghana

Ghana

Form Ghana owns and manages timber plantations in Berekum and Akumadan, both in Ghana.

Global woods

Uganda

Global Woods operates a forestry concession in the Kikonda Forest Reserve in Uganda.

Kudu Biomass Group

Production of high quality charcoal using a clean and efficient centralized retort technology

Merensky Timber

South Africa

One of the largest vertically integrated forestry companies in SSA

Mozambique Fibra

Mozambique

Transportation and logistics solutions for pulpwood material

Mphome

South Africa

Brownfield forestry asset with significant potential for rehabilitation and restructuring.

Rhino Wood

South Africa

Manufacturer and direct supplier of thermally modified pine decking and cladding products

SFI HoldCo

Ghana, Tanzania

SFI is a Dutch-owned forestry group with subsidiaries in Ghana and Tanzania.

Sustainable Forestry Investments

Ghana, Tanzania

Dutch-owned forestry group with subsidiaries in Ghana and Tanzania. The flagship operation is SFI Ghana, with approximately 10,000 hectares of planted teak and substantial scope for expansion.

Vuka Timbers

South Africa

Vuka is a manufacturer and direct supplier of treated wooden poles for use in electricity transmission and distribution, telephone line support, and agricultural fencing poles. The company also sells a small volume of untreated poles.