Sustainable Forestry Fund Innovation in Sub-Saharan Africa


Sustainable Forestry Fund Innovation in Sub-Saharan Africa


CDC views forestry as a strong sector for investment in Africa. Timber offers consistent long-term returns and has side benefits such as preserving biodiversity, protecting against soil erosion and the potential to generate income from carbon trading and sequestration. The sector also provides employment and training opportunities in rural areas.

Like many sectors in Africa however, forestry struggles to attract capital. Investors are often reluctant because managing forestry projects in Africa is challenging. Managerial skills are in short supply, land tenure issues are challenging, forest fires are common and there can be sensitive issues to overcome related to local populations’ access.


In fact there is so little investment in forestry that when CDC decided to put its capital to work in this sector, we found no fund managers making such investments. In 2008 CDC therefore issued a request for proposals, asking fund managers to submit plans for a forestry-focused fund in sub-Saharan Africa. CDC undertook to act as a cornerstone investor and get the fund started with a substantial sum.

A fund manager, GEF, was selected and in early 2010 CDC committed US$50m to the GEF Africa Sustainable Forestry Fund (ASFF). The fund achieved a first close in May 2010 at a value of US$83.8m, and the fund manager was able to attract substantial further investment throughout the rest of year, having now raised US$127m. ASFF has now started to make investments. The ASFF story is a good example of how CDC’s robust approach and strong reputation can catalyse other investors to commit their capital. The other investors include DEG, IFC, Proparco, FinnFund and MAEC.

Since it closed, the Fund has made four investments including into the Kilombero Valley Teak Company (KVTC) in Tanzania and Peak Timbers in Swaziland.

Peak Timbers is a 31,500 hectare timber plantation and sawmilling business located in Swaziland. While one-third of the property is managed for conservation purposes, the balance consists of Forest Stewardship Council (FSC) certified pine and eucalyptus plantations. The company, the largest employer in northern Swaziland with over 1,200 direct and indirect employees, exports pulpwood and pine lumber primarily to South African markets.

KVTC is a teak plantation and sawmilling business located in the Kilombero and Ulanga Districts of Southern Tanzania. KVTC includes approximately 8,150 planted hectares and total landholdings of 28,000 hectares, as well as a saw-mill.



Africa Sustainable Forestry Fund

Fund Manager


CDC Commitment


Date of Commitment



Sub-Saharan Africa

Editor’s Note: This blog was previously published on CDC and is reproduced with permission.

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