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Private sector commits $2bn to carbon projects

Pledges from New Forests and Ecosystem Investment Partners target conversation forestry, green infrastructure and ecological mitigation, as these see increased investor interest.

Private investors have pledged $2 billion towards forestry conservation and wetland restoration at a US government roundtable.

Agricultural investment firm New Forests plans to invest over $150 million in conservation forestry in the US over the next two years, while Ecosystem Investment Partners (EIP) will put in $300 million in ecological protection and wetland restoration over the next four years.

Impact investment and real estate development firm Fresh Coast Capital will invest an initial $1 million in urban land revitalisation, including urban agriculture, and the timber investment management organisation Lyme Timber will put in $250 million in rural landscapes and forestry conservation over the next 3 years, according to a White House press release.

“We are now at a point [in the US] where there is sufficient track record and market confidence to attract investors,” New Forests’ chief executive officer David Brand said. “We see a growing desire in the institutional investment community to invest in real assets like forestry that can produce conventional financial returns as well as positive climate change benefits and rural community economic development.”

Brand revealed to Agri Investor earlier this year that its US investment vehicle for carbon mitigation projects would now begin investing in timberlands that qualify for carbon offsets:

“Our investment vehicle, Forest Carbon Partners, is structured to work with landowners to develop the carbon projects on their land, and do a profit share. We are now moving towards acquiring forestry assets for clients for both timber and carbon value,” said Brand.

He added that he expected the US carbon market to be worth at least $2 billion by 2020, and that investment in the market was a growing opportunity. New Forests has over $2 billion of assets under management in the US and the Asia Pacific region, including Australia and New Zealand.

EIP, based in the US, reached a final close on $303 million for its third fund, Ecosystem Investment Partners III in February, overshooting its $200 million target.

Private company Trout Headwaters and impact investment arm of the charity the Nature Conservancy, NatureVest, also made pledges at the White House Roundtable on Conservation Investment.