26 April 2024


IFU has signed a new investment of USD 20 million in a single-asset forestry fund that will convert cattle grazing lands to an innovative integrated forestry model that combines commercial forestry and conservation activities in Paraguay. The investment is IFU’s first sequestering investment aiming at meeting net zero carbon emission from its portfolio by 2040 at the latest.

IFU has invested USD 20 million in SA Impact Forestry Fund (“SAIFF”), a private equity fund dedicated to sustainable forestry in Paraguay. SAIFF will convert low-productivity farmland with limited alternative uses into a sustainable FSC-certified forest in Paraguay. Including IFU’s commitment SAIFF is targeting a forestry portfolio of more than 80,000 hectares with approximately 60 million trees planted. At least 25 per cent of the area managed will be protected for conservation and restoration activities driving significant ecosystem benefits that will improve flora, fauna and wildlife. The impact on biodiversity has been a key priority in IFU’s due diligence phase and confirms net biodiversity gains within the area of control.

“We are very pleased to invest in the SA Impact Forestry Fund, which has already shown solid progress in converting grazing lands to forest combined with a strong commitment to sustainability and the creation of the largest private conservation park in Paraguay.”

Jesper Kaspersen, Senior Investment Manager in IFU.

Supporting net zero carbon emissions
IFU is aiming at meeting net zero carbon emissions from its investment portfolio by 2040 at the latest. The strategy is to constantly reduce the carbon footprint of the investees and invest in projects having net negative absolute emissions.

The SA Impact Forestry Fund is IFU’s first investment in a sequestering project that is expected to remove 18 million tonnes of CO2 over the next 10 years.

“In recent years, we have managed to gradually reduce our carbon footprint per invested million, but we cannot meet our net zero target without investing in sequestering projects. Therefore, the investment in the SA Impact Forestry Fund is the first in a series of investments that will bring us closer to the target.”

Mikkel Kallesoe, Head of Sustainability and Impact in IFU.

Besides having a positive climate impact, the fund’s activities will also contribute to significant job creation of 3,000 direct and estimated 30,000 indirect jobs in an area with few jobs and low incomes.

Investing with strong partners
IFU is investing in SAIFF alongside strong partners, including IFU’s sister organisations FMO and CAF, as well as GenZero and several other climate funds and family offices.

The total fund size is USD 325 million, and the fund is managed by Astarte Capital Partners and Silvipar.