IFC has invested in Green Resources, a plantation and forest products company operating across much of East Africa, to help plant forest and implement international environmental standards that will help tackle the causes of climate change.
IFC will provide a $10 million senior loan and an $8 million subordinated loan to Green Resources. The company will use the funds to plant 8,000 hectares of forest in Tanzania’s grassland and deforested areas to develop sustainable forestry. The new plantations and improvements will help it create 500 permanent jobs and 5000 seasonal positions by 2011.
Green Resources will also modernize its sawmill and wood harvesting equipment, and build a 15 megawatt heat and power plant fuelled by wood waste from its own and neighboring sawmills. It will sell surplus capacity from the plant to Tanzania’s national grid.
The new plantations and power plant, which uses recycled wood and eliminates methane emissions from decomposing wood waste, will enable Green Resources to sequester roughly 700,000 additional tons of carbon emissions annually from its operations. The company will sell these carbon credits directly to buyers from developed countries.
“Green Resources sets a model for how regional forestry companies can contribute to reversing deforestation and develop sustainable and environmentally friendly business models that make commercial sense,” says Jean Philippe Prosper, IFC Director for Eastern and Southern Africa.
IFC's Strategy
The investment reflects IFC’s strategy to promote sustainable energy and development by identifying business risks and opportunities associated with climate change and advising companies on managing and reducing its impact.
It also illustrates that alleviating the impact of climate change makes good business sense. Green Resources will obtain certification from the Forest Stewardship Council that its plantations in Mozambique, Tanzania, and Uganda are environmentally and socially sustainable, offer favorable working conditions, and adhere to the highest international standards.
Deforestation in Africa currently affects about 4 million hectares of land annually and accounts for approximately 55 percent of total global deforestation. Tanzania has lost some 15 percent of its forest since 1990, while Uganda has lost as much as a quarter. Deforestation globally is estimated to contribute 20 percent of the recent rise in carbon dioxide in the atmosphere.
For more information contact:
Houtan Bassiri
Communications Officer
Johannesburg, South Africa
Tel: +27 11 731 3179
Email: hbassiri@ifc.org
