EIB announces €200m forestry investment into Ireland
The European Investment Bank (EIB) has confirmed that it will provide funding of €90 million as part of a long-term loan to Irish, state-owned forestry group Coillte, and will work alongside the Ireland Strategic Investment Fund (ISIF) to provide a €112 million investment in a number of privately-owned forests across Ireland.
EIB’s funding commitment marks the first such investment in Ireland in 20 years, and will aim to bring the total proportion of land mass covered with forestry to 17 per cent, up from 11 per cent.
Investing in the future of Ireland’s forests
The EIB, the financial arm of the European Union, frequently provides low-cost access to capital markets for large-scale infrastructure projects across Europe, and has reportedly become one of the world’s most significant investors in forestry projects. In the past five years alone, the EIB has invested €4.5 billion in forests globally, and has provided low-cost loans totalling more than €15 billion in Ireland in the past five years.
According to the EIB, which provided over €825 million as part of long-term investment in the public sector in 2016, this latest investment partnership with Coillte will fund the cost of initial forest planting and forest management, as well as road construction until 2021.
As part of the investment project, EIB vice president Andrew McDowell has announced that more than 35,000 hectares of forest will be replanted, and over 1,600km of roads will be constructed or upgraded throughout the forest system. Part of the €90 million loan will also be dedicated to the continued maintenance of 1,000km of public walking routes and mountain biking trails will also be improved using the funds available to help support the forest infrastructure.
Commenting on the recently announced investment plans, Coillte’s chief executive Fergal Leamy stated that the funding received by the EIB, combined with refinancing that has been secured with five syndicate banks, will be key to ensuring the company achieves its goals in the near future.
Developing private forests
In a recent announcement, Mr McDowell has also revealed that the organisation will build a partnership with Ireland Strategic Investment Fund (ISIF) as part of a new initiative to support €112 million of new investment in Ireland’s privately-owned forests.
Seeking to unlock €315 billion in new investment, the agreement with Dasos Capital is the first agricultural project in Ireland and the first forest project in Europe that has been supported by the Investment Plan for Europe.
Aiming to improve forest management and strengthen tree growth, specialist forestry investment fund Dasos is set to provide €112 million to the project, while ISIF is due to invest €55 million and the EIB will provide an additional €28.5 million.
Ultimately, the initiative intends to consolidate Irish forests into a professionally managed portfolio of up to 18,000 hectares of forests that span the country, ensuring crucial upgrades to the country’s forestry infrastructure and bringing EIBs local funding commitments to €1 billion in 2017.
According to Andrew Doyle, Minister of State for Agriculture, Food and the Marine, the announcement of future investment projectors will help to make sure the country’s agricultural “potential is realised” and that any “social benefits of our forests are further developed”.
James Barrett, spokesman for GWD Forestry, praised the initiatives. “This is promising news for Ireland’s forests and European forestry in general,” he said.