New financing opportunities for forestry and tropical timber projects

Against a backdrop of increasingly stringent international requirements in terms of combating deforestation, traceability, and value chain sustainability, several financial mechanisms are now seeking to mobilize more private investment in the forestry and agroforestry sectors.

ATIBT would like to draw its members' attention to two complementary tools that could support structural projects in tropical countries, particularly in the Congo Basin.

Canopy Trust – a financial fund dedicated to reducing deforestation

The Canopy Trust is a recently launched fund managed by the Swiss foundation Catalytic Finance, whose objective is to reduce the financial risks associated with private investments that contribute to combating deforestation and promoting sustainable forest management.

Types of projects targeted

The fund is aimed in particular at:

forestry or industrial companies committed to sustainable management and local processing;
responsible timber value chain projects;
initiatives combining production, conservation, and local development at the landscape level;
projects incorporating traceability, certification, inclusion of local communities, or diversification of species.

Support modalities

The Canopy Trust mainly provides:

catalytic or concessional financing;
risk-sharing instruments;
support for hybrid financing arrangements, in addition to other sources of financing.

Projects can be submitted spontaneously, without a formal call for proposals, which is an interesting opportunity for initiatives that are already mature or in the structuring phase.

Main eligibility requirements

Projects must, in particular:

demonstrate a measurable impact on reducing deforestation and/or improving forest management;
be part of a credible environmental and social sustainability framework;
have clear governance and an identified project leader;
be deployed in priority tropical countries, including those in the Congo Basin.

Detailed information and submission:

https://canopytrust.org/

EU Global Gateway Investment Hub – a one-stop shop for European investments

Led by the European Commission (DG INTPA), the EU Global Gateway Investment Hub is the entry point for European companies and actors wishing to develop large-scale investment projects in the partner countries of the Global Gateway strategy, particularly in Africa.

Eligible projects

Supported projects must:

be aligned with Global Gateway priorities (sustainability, climate, resilience, governance);
have significant investment potential (generally greater than €10 million);
include a contribution from the project promoter (financial or in kind) of at least 10%;
be located in an eligible partner country.

In the forestry and timber sector, this may concern:

sustainable industrial processing projects;
investments related to traceability, geolocation, and regulatory compliance (particularly the EU Timber Regulation);
projects incorporating the infrastructure, services, or training necessary to structure the sector.

Types of support available

The Hub can mobilize:

project preparation grants;
European financial instruments (guarantees, debt, capital) via partner financial institutions;
non-financial support (technical assistance, dialogue with authorities, economic diplomacy);
connections with European or local partners.

Information meeting

An online information meeting dedicated to the functioning of the Investment Hub will take place on January 28.

Registration is required before January 22: via this link

Information:

https://international-partnerships.ec.europa.eu/investment-hub_en

The role of ATIBT

ATIBT is currently in contact with the Canopy Trust (Catalytic Finance) teams and the European Commission services in order to:

better understand the operational criteria of these mechanisms;
identify the most relevant opportunities for players in the tropical forest-wood sector;
and facilitate its members' access to these mechanisms, in particular by providing support for project structuring or putting them in touch with the right contacts.

Interested ATIBT members or partners are invited to contact caroline.duhesme@atibt.org for an initial discussion.

News

New financing opportunities for forestry and tropical timber projects