WEST AFRICA – FMO, a Dutch investor, has announced an investment in Miro Forestry, a sustainable forestry and timber products business with one of the largest forestry plantations in West-Africa.
The transaction consists of a conversion of FMO’s existing US$10 million mezzanine debt into a redeemable preference share funded by the Builing Prospects Fund, and a further US$5 million share funded by the Dutch Fund for Climate and Development (DFCD), which FMO manages on behalf of the Dutch government.
CDC, Finnfund, and Mirova, amongst others, also participated in this financing package. With this financing, Miro will expand its planted area, and set-up its plywood and pole production facilities
“We are proud we can continue to support the development of sustainable forestry in Africa which is key for job creation, surrounding communities, CO2 sequestration and reducing deforestation,” Linda Broekhuizen, FMO’s Chief Investment Officer said.
“With our financing, Miro can sequester approximately 500.000 tons CO2 annually, which is the equivalent of driving over100,000 passenger vehicles for one year. By investing in Miro we are thus another step closer to reaching our zero-emission target by 2050.”
The West-African timber industry has long fed off the natural resources of the region. As a result, the natural forests of, for example, Ghana have almost disappeared. At the same time, the population continues to grow and due to economic development, the demand for wood is high.
This means that remaining forest resources cannot come close to sustainably supplying current demand. Miro develops timber plantations and at the same time conserves environmentally sensitive areas.
Its total planted area consists of over 17,000 hectares of eucalyptus, acacia, gmelina and teak across Ghana and Sierra Leone – all FSC-certified. Miro’s plantations will target a growing market with favourable dynamics, but they will also make a contribution to easing pressure on the over-used natural forest resources in the region.
Having successfully planted and developed the plantation for over 10 years, Miro is building its industrial capacities as its forest will soon produce a strong and steady flow of wood to be converted into high value-added products such as plywood and poles.
“FMO has been an investor in Miro for a number of years and we are now delighted to have FMO invest further into the business. FMO have been a very strong partner to date and we look forward to further developing Miro with their support,” Andrew Collins, Miro’s Chief Executive Officer said.
“Whilst maintaining the quality of our plantations, we are now focused on rapidly developing our timber processing operations to develop into a vertically integrated, profitable, timber products company, with a major focus on plywood for the local, regional and export markets.”
He added that it was a particularly important task as the overall success of Miro will be a bell weather to the sub-Saharan African sustainable forestry and timber products industry.
This is an industry sector which requires greater investment into the successful operators producing certified timber products for sustainable economic return, industrial development and balance of trade in the region, which remains one of the most attractive globally.
Over the next 10 years, Miro is expected to sequester a total of approximately 10 million tons of CO2. Next to the CO2 impact, Miro has created over 2.000 jobs in Ghana and Sierra Leone and is one of the principal job providers in the regions where it operates.
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