Rothschild impact fund backs Kenyan forestry company

Investment of $3m from the €84m Moringa fund will help Asante Capital’s efforts to develop plywood, essential oils and food products industries in the east African nation.

Edmond de Rothschild Group (EDG)-linked impact investment fund Moringa has made a $3 million investment for an unspecified stake in Asante Capital, a Kenyan agroforestry company.

This marks the second investment in Africa from the fund, which closed on €84 million in late 2015, and constitutes half of what will be a $6 million investment in Asante, according to a company statement.

As Agri Investor previously reported, investors in the fund included family offices and developmental finance institutions, including the African Development Bank, investing in agroforestry investments of between €4 million and €10 million in sub-Saharan Africa and Latin America over a five-year fund life.

Capital from the Asante investment will be used to help create a plywood industry in Kenya, and will see Moringa help the company develop and work with a network of 500 smallholders to enable reforestation of more than 2,800 hectares of plantations, according to the statement.

Moringa president Herve Bourguignon said investments like the one in Asante allow the firm to meet its climatic and financial objectives. “The responsible development of forests is a very important for a country like Kenya, which suffers from serious deforestation.”

Asante was founded in 2015 and produces timber products and essential oils as well as moringa and ginger for food. The company owns 180 hectares of land and hopes to become a source of sustainably-produced wood for growing markets in the Middle East and Asia, as well as a Kenyan construction market the statement describes as “very promising.”

The company also operates a land bank mechanism that partners with marginalized rural communities that donate land to Asante, which then plants high-value crops and shares proceeds with those communities to enhance the social impact of its investments.

“Access to capital through traditional banking or other channels is very difficult in Africa, especially for long-term activities such as sustainable agriculture,” Asante chief executive Esther Mutuma said. “We need specialized investors to provide not only capital but also good practices and connections with foreign markets.”

Moringa is a Paris-based impact investment fund focused on agroforestry investments in sub-Saharan Africa and Latin America. Launched in 2010 as a collaboration between EDG and an international subsidiary of the French National Forests Office, the Moringa fund’s other investments are in Cafetalera Nica-France,  Nicaraguan timber and coffee producer, and Tolaro Global, a cashew-processing company in Benin.