Gresham House has launched a fund to enable Irish and international investors to fund greater forest cover across Ireland.

The Irish Strategic Forestry Fund will provide up to €200m capital needed to create new forests, making a significant contribution to Ireland’s climate action plan.

The fund will also acquire existing forest assets with the intention of creating a portfolio of approximately 12,000 hectares of new and existing forests.

The fund, which will be managed from Gresham House’s Dublin office with Joe O’Carroll acting as investment director, has attracted €35m from Irish investors, including a €25m cornerstone investment from the Ireland Strategic Investment Fund (ISIF), Ireland’s sovereign development fund.

Gresham House said ISIF’s capital would complement other Irish and international capital.

The new fund has established an operational management agreement with Coillte, Ireland’s state-owned manager of forestry and timber investments.

Coillte will source land, plant trees and manage the fund’s forests as part of its overall forest estate, ensuring open access to the public. Since its establishment in 1989, Coillte has planted 100,000 hectares of new forests.

Coillte and Gresham House will also work with other forest management companies to acquire new land and carry out afforestation.

Olly Hughes, managing director at Gresham House Forestry, said: “This initiative will create a platform for enhancing Ireland’s forestry sector, delivering real change and momentum and making a meaningful contribution to Ireland’s crucial afforestation ambitions.

“The combination of skills the fund brings together will be key to unlocking and developing new forests in Ireland, helping to support the ambitions of the Irish Climate Action Plan. The additional support and momentum ISIF will bring to the fund will also be central to the fund’s success.”

Nick Ashmore, director of ISIF, said: “This is an example of ISIF’s ability to act as a catalyst for attracting co-investors to bring significant Irish and international capital to major investments in Ireland.

“It also underlines ISIF’s commitment to climate action as we continue building our €1bn climate investment programme, complementing our existing investments in forestry, renewable energy, energy efficiency and energy storage.

“This new fund will drive significant investment in one of Ireland’s key natural resources. It will help deliver on ISIF’s double-bottom-line mandate of generating a commercial return and supporting economic activity and employment in Ireland, while generating further progress in Ireland’s transition to a net-zero economy.”

Imelda Hurley, chief executive of Coillte, said: “There is an urgent need for Ireland to meet stretching climate-action targets and creating new forests is integral to the achievement of these targets. The government’s national afforestation target is 8,000 hectares per annum and the long-term target is to achieve 18% forest cover. Currently forest cover in Ireland is 11.6% compared to an EU average of 40%.

“The new Irish Strategic Forestry Fund represents an important first step towards accessing the capital required to enable the creation of new forests which will deliver the multiple benefits of forests for climate, nature, wood and people.”