FinDev backs Criterion African Partners forestry fund with $7.5m

Canadian developmental finance institution FinDev Canada has committed $7.5 million to Africa Forestry Fund II, a growth equity vehicle focused on environmentally friendly investments into sub-Saharan Africa’s forestry value chain.

Managed by Bethesda, Maryland-headquartered Global Environmental Fund spin-out Criterion African Partners, AFF II aims to reinvigorate Africa’s forestry sector through acquisition, improvement and rehabilitation of plantations and support downstream manufacturing and biomass energy.

FinDev said in a statement that its investment in the fund reflected focus on supporting progress on United Nations Sustainable Development Goals relating to decent work and economic growth (SDG 8), climate action (SDG 13) and life on land (SDG 15).

Another key focus of FinDev’s investment with CAP is increasing access to employment for women in Africa’s forestry sector. AFF II aims to create 3,500 jobs in the forestry sector, 30 percent of which are to be filled by women.

“Leveraging FinDev Canada’s recommended actions for women’s economic empowerment, the fund seeks to diversify and increase the number of women in senior leadership, as well as to ensure a commitment towards women economic empowerment at both the fund and investee level,” said the FinDev statement.

Suzanne Gaboury, chief investment officer at FinDev, told Agri Investor in July that it planned to incorporate a focus on women’s empowerment into its upcoming fund investments, which she said were likely to range between $5 million and $20 million.

She added that in addition to partnering with businesses willing to make women part of management throughout the value chain, FinDev would consider key firm executives’ backgrounds and evaluate diversity track records.

“We recognize that at times, women just don’t have the access to funding that others may have,” she said. “They have the financial know-how, they have the in-country experience, they have experience fundraising with, perhaps, other companies. In a new fund, maybe they haven’t necessarily worked together.”

AFF II reached a first close on $81 million in June 2018 and its predecessor vehicle closed on $160 million in 2010. Its strategy calls for transitioning 50,000 hectares of forest land to sustainable land management and steps to encourage the replacement of fossil fuels with biomass and steam energy.

Speaking to Agri Investor at AFF II’s first close, managing director George McPherson said commitments to AFF II had been made by Dutch development bank FMO, the Grantham Foundation for the Protection of the Environment and BIO, a Belgian DFI. McPherson said the vehicle’s target is $150 million. It could not be confirmed if the fund had reached final close at the time of going to press.

Investments from CAP’s first fund were concentrated mostly in South Africa, Swaziland, Uganda and Gabon while plans called for AFF II to concentrate on countries in southern and eastern Africa, he said.

Gaboury was unavailable to speak to Agri Investor and McPherson did not respond to a request seeking further details.