Finnfund, a Finnish development finance company, has committed $10m to an impact fund for sustainable forestry, the Arbaro Fund.

“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,” said Finnfund CEO Jaakko Kangasniemi.

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.

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.

Arbaro was established by the global impact asset manager Finance in Motion together with timber sector advisory company Unique.

One of the fund’s cornerstone investors is the European Investment Bank (EIB).

The fund marked its initial closing at $60.2m in July 2018, with a target of $200m. 
Arbaro also aims at solid financial returns, thanks to its target regions’ optimal biophysical growth conditions and high local timber demand.