Sweden’s AP2 and Germany’s Bayerische Versorgungskammer (BVK) are among the investors that have backed New Forests to raise an initial A$450m (€280m) for an Australia and New Zealand landscapes and forestry fund.
New Forests said its Australia New Zealand Landscapes and Forestry Fund’s (ANZLAFF) also received A$75m from Australia’s Clean Energy Finance Corporation (CEFC) and commitments from an unnamed Australian and German insurer.
The amounts contributed by AP2 and BVK were undisclosed.
ANZLAFF aims to provide investment exposure to integrated forest, land, carbon and agriculture markets in Australia and New Zealand, targeting investments in core forestry plantations alongside processing and related infrastructure, with some exposure to agriculture.
CEFC’s investment marks the clean energy financier’s entry into the forestry sector.
CEFC CEO, Ian Learmonth said: “This milestone CEFC investment commitment mobilises the forestry sector to help unlock the supply of carbon credits and accelerate carbon sequestration opportunities, ensuring we make the best use of our land as we decarbonise our economy.”
Heechung Sung, head of natural capital at CEFC, said: “Natural capital assets offer significant opportunities to contribute to the decarbonisation pathway for Australia and to build competitive new industries for our net zero future. These require a long-term investment focus. The sooner we act, the greater the economic benefit and the more opportunity we have to mitigate the worst effects of climate change.”
Jessika Ingvarsson, AP2’s head of forest and agriculture investment, said: “With AP2’s long-term investment horizon, it is important to consider climate aspects in investment decisions. The forest industry has the unique opportunity to both reduce fossil use by replacing it with renewable products and at the same time increase carbon storage in growing forests and plays an important role in natural climate solutions.”
Kathrin Kalau-Reus, BVK’s head of private equity, infrastructure and timber at BVK, said: “Being a longstanding investor in the forestry sector, the asset class contributes to environmental sustainability by supporting responsible land management and afforestation initiatives.
”This supports our belief that aligning our business practices with sustainable and responsible principles leads to a positive and lasting impact on the environment and shows attractive returns.”
David Shelton, managing director of Australia and New Zealand at New Forests said: “Since New Forests launched its first fund 13 years ago, the market is now seeing a clear shift from investing in narrow mandates around forestry and agriculture alone, to include a wider set of considerations and returns.
“Investors globally are now thinking about the role of forestry, agriculture and land use transition in not only delivering returns, but reducing emissions, contributing to conservation, and the circular bioeconomy.”
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