Ghana has received approval for $24 million for the first-of-a-kind Private-Public Partnership project to restore degraded forest reserves and double a sustainable forest plantation.
This project is backed by a $10-million concessional loan from the Climate Investment Funds’ Forest Investment Program (CIF FIP) approved on July 1, and supplemented by $14 million in co-financing from the African Development Bank (AfDB).
The approval came days after Ghana ratified the Paris Agreement on climate change at the UN in New York, signaling its full commitment to linking its climate action and development path, said a release.
Ghana’s efforts at restoring its forest sector will play an important role in meeting its commitments under the Agreement.
Ghana’s forests, which once covered a third of its 24-million-hectare landmass, have been degraded at an alarming rate by excessive and often illegal logging, slash-and-burn agriculture, mining and quarrying, and fuel wood collection.
The newly approved project is targeted to help reverse the trend by restoring and expanding an existing Forest Stewardship Council (FSC) certified 5,000 hectares forest plantation to nearly 12,000 hectares sustainable commercial forest plantation made up of 10 percent indigenous tree species and 90 percent teak.
Importantly, the program will conform to both FSC and Verified Carbon Standard (VCS) certification standards.
Developed under the CIF’s competitive set-aside program to engage the private sector, the project is a partnership with Form Ghana.
Gareth Philips, AfDB’s CIF FIP Coordinator, said “this is an exciting and significant investment in a key sector for Africa and one which provides multiple benefits to the continent.”
“The FSC certification has been key in getting this project approved, as it provides investors with the confidence that the project is sustainable and at the same time brings authentic long-term benefits to the communities and environment.”
The project is designed to have a significant transformational impact on the Ghana forest plantation sector by supporting a new business model that will serve as an example to other investors, producing wood products which have the quality and sustainability stamp that will help meet increasing market demand while avoiding pressure on natural reserve forests.
In line with CIF and AfDB standards, the project has been structured through extensive engagement with all stakeholders throughout the country.
It’s expected outcomes include: net greenhouse gas sequestration potential of around 2.8 million tonnes CO2 over 40 years (a long-term average of 70,103 tCO2 per year); 11,700 hectares of sustainably managed forest plantation with FSC and VCS certification; and 400 direct full-time jobs and 600 direct seasonal jobs.
The project includes a goal of ensuring that, in this heavily male-dominated industry, 40 percent of the jobs generated through the project will be held by women.
“AfDB has chosen to support this project because its goals are consistent with our institution’s reaffirmed commitment to help African countries like Ghana meet their climate change and sustainable development goals,” said Richard Fusi, Task Team Leader.
“We hope that this project becomes a replicable model for attracting private sector finance to this particular sector and that Ghana, through this project, will help lead the way for further investment in sustainable forest management in African countries.”
The project will help meet the country’s overarching FIP goals by addressing the underlying drivers of deforestation and catalyzing transformational change through up-front investment to support the country’s strategy on Reducing Emissions from Deforestation and Forest Degradation, sustainable management of forests, and enhancing forest carbon stocks (REDD+).
CIF was established in 2008, as one of the largest fast-tracked climate financing instruments in the world, with $8.3-billion funding to provide developing countries with grants, concessional loans, risk mitigation instruments, and equity that leverage significant financing from the private sector, Multinational Development Bank’s (MDBs) and other sources.
The five MDBs, African Development Bank (AfDB), Asian Development Bank (ADB), European Bank for Reconstruction and Development (EBRD), Inter-American Development Bank (IDB), and World Bank Group (WBG) – implement CIF-funded projects and programs.