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 and preservation of natural resources

Beneficiary locations

Sub-Saharan 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 and preservation of natural resources
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.

Global woods

Uganda

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

Mphome

South Africa

Brownfield forestry asset with significant potential for rehabilitation and restructuring.

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.