Denmark’s development finance institution, Impact Fund Denmark, has announced a $25 million (DKK 160 million) investment in The New Forests Company (NFC), a forestry business operating across Uganda and Tanzania. The capital injection will significantly expand NFC’s plantation footprint and strengthen local timber production across East Africa.
East Africa faces a substantial timber trade deficit, estimated at around $12.6 billion (DKK 80 billion) between 1991 and 2020, driven by rising demand for wood products that the region currently cannot meet from domestic supply. Much of the timber that could otherwise be grown and processed locally is instead imported, meaning jobs, tax revenues, and broader value creation flow outside the continent.
Mauritius-based The New Forests Company, founded in 2004, is working to close that gap. The company operates FSC-certified plantations and currently produces electric poles, sawn timber, and pallets for regional customers.
With the funding, NFC plans to expand its forest area from 30,000 to 100,000 hectares. It says roughly half of that expanded area, around 50,000 hectares, will be dedicated to nature and biodiversity through the restoration of former natural forest areas.
It will also use the funding to improve production and manufacture plywood and glulam products, categories that are currently imported in large volumes across the region. For Impact Fund Denmark, the investment is both an economic and environmental play.
Lars Bo Bertram, CEO of Impact Fund Denmark, “The forest sector in East Africa is a growing sector, and at the same time the investment binds millions of tonnes of CO2 and generates income for thousands of local families. The investment will create a more independent Africa. This is exactly the type of investment we aim to make.”
The plantations are expected to sequester approximately 12 million tonnes of CO2 over the lifetime of the investment, with the climate credits generated certified to the latest international standards.
According to a statement published by Impact Fund Denmark, the investment is supported by EDFI Carbon Sinks, a guarantee facility managed by EDFI Management Company and financed by the European Union under the European Fund for Sustainable Development Plus (EFSD+) programme, as part of the EU’s Global Gateway strategy.
The African ecosystem is witnessing a profound change where development finance institutions are moving towards building domestic value chains. By scaling certified plantations, restoring natural forests, and building local processing capacity, the Impact Fund Denmark’s investment in NFC ties together climate goals, trade balance improvement, and job creation in a single transaction.
