On World Environment Day, FMO proudly presents its recent transaction with Miro Forestry, one of the largest forestry plantations in West-Africa.
With this financing, Miro will expand its planted area, and set-up its plywood and pole production facilities. The transaction consists of a conversion of FMO’s existing USD 10mln mezzanine debt into a redeemable preference share funded by the Builing Prospects Fund, and a further USD 5mln share funded by the Dutch Fund for Climate and Development (DFCD). CDC, Finnfund, and Mirova, amongst others, also participated in this financing package.
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. Over the next 10 years, Miro expects to sequester a total of approximately 5 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.
Linda Broekhuizen, FMO’s Chief Investment Officer commented: “Especially on this important day of the year, 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. Miro expects to sequester approximately 500.000 tons CO2 annually, which is the equivalent of driving ~100,000 passenger vehicles for one year. By investing in Miro we are thus another step closer to reaching our zero emission target by 2050.”
Andrew Collins, Miro’s Chief Executive Officer said: “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.
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. This is a particularly important task as the overall success of Miro will be a bellweather 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.”
Additional positive social impact
Miro generates positive social impact by creating local jobs, training and personal development opportunities, protecting rural communities and improving livelihoods. The company educates local communities to protect their own environment, including forests. In the next two years, the company will implement an outgrower scheme financed by FMO’s Capacity Development program, which involves at least 500 smallholder farmers and community members. Additionally, FMO has supported Miro with a COVID-19 support package for medical supplies and job security.
In this video, several employees tell about their experiences at Miro. They have been working with the company for 5 or 6 years and are now better able to feed their family and buy clothes. And on top of that, they have learned a trade.