AfDB approves investment of $20mn for African Forestry Fund

A massive of USD 20 million has been approved for the African Forestry Fund by the board of directors of the African Development Bank in Abidjan on September 5.

The African Development Bank (AfDB) has proposed the equity participation of USD 20 million. The bank will sit on the advisory committee, ensure alignment of the fund with country strategies and international best practices on environmental and social issues.

The field of forestry in Africa is being impacted by population growth and urbanization that is augmenting the demand for various wood-based products used for infrastructure, building materials and furniture, among other things. Each year, about 100 million cubic meters of round wood, the majority of which is used as fuel and for industrial applications (building materials and furniture) are used in Africa.

The recently approved fund by AfDB has an objective to play a role the rehabilitation of existing plantations to increase productivity through, among other things, the conversion of silvicultural assets into high-value assets, the downstream processing of high-margin wood products and the use of wood waste as biomass for power generation facilities on the continent. Fund II focuses on the eastern and southern African regions, which contain most of the continent's forest resources.

Depending on the strategic value of the project, the directors of AfDB approved and validated the project. The Fund II project achieves four priority development objectives (High 5) of the Bank: to feed Africa, to enlighten Africa (supply of utility poles), to industrialize Africa (downstream wood processing), improving the quality of life (youth employment in rural areas), integrating Africa (improving intra-African trade in wood products).

On the other hand, the AfDB strategy for 2013-2022 focusses on green growth as a priority area and considers the “effective and sustainable management of natural assets” as one of its key opportunities.

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