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Finnish development financier Finnfund has committed 10 million USD to a new impact fund for sustainable forestry, the Arbaro Fund (Arbaro).
Arbaro is projected to sequester over 20 million metric tons of CO2 in its lifetime and create more than 5,000 jobs in remote areas. Arbaro aims to invest in and actively manage a well-diversified portfolio of up to 12 sustainable forestry projects in Latin America and Sub-Saharan Africa – regions which are currently characterized by high deforestation rates and an increasing demand for wood resources.
Sustainable forestry is one of Finnfund’s focus sectors because of its high impact on the climate, environment and jobs. Finnfund has invested in ten forestry companies and funds primarily in Africa.
“Sustainable forestry has long been one of Finnfund’s key sectors because the world needs to step up its efforts to fight deforestation and climate change. We expect the Arbaro Fund to play an important role in this vital effort,” commented Finnfund CEO Jaakko Kangasniemi.
Arbaro was established by the global impact asset manager Finance in Motion together with timber sector advisory company Unique. Finnfund brings to the fund its expertise in sustainable forestry. One of the fund’s cornerstone investors is the European Investment Bank (EIB).
The fund marked its initial closing at USD 60.2 million in July 2018, with a target of USD 200 million. Arbaro also aims at solid financial returns, thanks to its target regions’ optimal biophysical growth conditions and high local timber demand.
Finnfund (Finnish Fund for Industrial Cooperation Ltd) is a Finnish development finance institution, aiming to foster sustainable development by providing long-term risk capital for private projects in developing countries. Investment criteria include profitability, sustainability and positive development impacts. Since 1980 Finnfund has made nearly 370 investments in almost 70 countries. Currently, Finnfund has approximately 613 million euros invested in or committed to 167 projects in 34 countries. For more information, please visit www.finnfund.fi
