February 1, 2021

By Lynda Kiernan, Global AgInvesting Media

Real asset-focused investment firm Astarte Capital Partners and Stockholm-based forestry development and management company SilviPar AB have partnered to launch the SA Impact Forestry Fund (SAIFF) – a new fund dedicated to sustainable forestry, with an initial focus on Paraguay. 

Under the terms of the partnership, Astarte Capital has committed US$30 million to the venture as seed capital, and SilviPar has committed assets valued at US$30 million. 

With a funding target set between US$150 million – $200 million, SAIFF will act to acquire, develop, and manage low-productivity farmland with limited alternative uses that are suitable for forestation. Capitalizing upon what the fund sees as the strong macro drivers, it plans to establish a sustainable, cost-efficient forestry portfolio to produce wood for the global fiber and pulp markets, while generating new credits for the carbon offset market.

Bringing its proven experience in building and growing businesses across private markets, Astarte will act as the investment advisor to the fund, responsible for operations and marketing, and SilviPar will manage the portfolio, being responsible for the forestry strategy and day-to-day operations.

“We are delighted to be partnering with SilviPar,” said Teresa Farmaki and Dr. Stavros Siokos, co-founder, Astarte Capital Partners. “The team has deep expertise in the forestry space and operations of the highest quality and standards. We are looking forward to working with such an exceptional team, with whom we share the same vision and principles across all aspects of business and sustainability.”

The partners note that the global demand for natural fiber is expected to continue to increase. Indeed, the report Global Natural Fiber Composites Industry released in August 2020 concluded that the global market for Natural Fiber Composites is expected to reach a value of US$8.5 billion by 2025. 

Furthermore, in the ongoing shift toward net-zero emissions, forestry stands as a so-far largely untapped, but critical asset class.

“Now with the US potentially returning to the table of the Paris Agreement, we would likely have two-thirds of the global economy, representing half the world’s emissions, committed to net zero,” noted Astarte Capital Partners in the report, The Role of Forests Toward a Net Zero Economy, issued in November 2020. “Besides, corporates with combined revenues of over US$11.4 trillion and investors with a combined Asset Under Management (“AUM”) of US$5 trillion have also joined the cause.”(3)

Paraguay is currently one of the countries with the highest deforestation rate in the world. As part of its mission, SAIFF plans to drive significant ESG benefits by contributing to carbon sequestration at scale through the transformation of marginal land into forestry assets. SAIFF’s commercial operations also will help develop infrastructure and create employment to stimulate local economies, and decrease the use of fossil-based products and the deforestation that accompanies their production.

“SilviPar is very pleased to enter into this partnership with Astarte,” said Martin Forsen, CEO, SilviPar AB. “Together with Astarte’s impressive team and network, the new platform will allow SilviPar to apply its strong organisational expertise and know-how to help SAIFF reach its full potential.”

(3) United Nations Environment Program Finance Initiative, “Institutional investors transitioning their portfolios to net zero GHG emissions by 2050”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.