Scottish National Investment Bank backs forestry fund with £50m commitment

Some £50 million in funding has been earmarked to back woodland and forestry management as Scotland eyes a greener future.

The Scottish National Investment Bank has become a cornerstone investor of the Gresham House Forest Growth & Sustainability Fund.

Its capital will support new planting and could lead to the capturing of some 1.2 million tonnes of CO2 over the next 20 years.

The fund will target generating stable returns through the sale of timber and the capital growth of land and trees. Any trees harvested by the fund will be replanted and the timber products generated.

The Scottish National Investment Bank's capital will support widescale new planting and is predicted to capture 1.2 million tonnes of CO2 over 20 years.

It will also aim to generate carbon credits in the form of woodland carbon units (WCU) which will create “additional value” or be used to offset carbon emissions on a voluntary basis.

Eilidh Mactaggart, chief executive of the Scottish National Investment Bank, which launched last year, said: “The Bank is delighted to cornerstone this new sustainable forestry fund focused on new and diverse planting in Scotland.

“Gresham House is an experienced forestry fund manager, and we are very excited to support them in this new venture.

“The new planting element and ability to generate carbon credits represents a novel investment proposition which mainstream investors have yet to fully embrace.

“The bank’s cornerstone investment is designed to encourage other investors to follow us into this new type of forestry fund. We therefore believe this opportunity to be an excellent fit for the bank’s ambition to lead the way on innovative mission aligned investments.”

The investment will also support existing and new jobs in rural Scotland.

Managing some 140,000 hectares of forestry worth more than £1.8 billion, Gresham House is the UK’s largest commercial forestry manager. The business also manages a forestry mandate in Ireland and expects to complete on a further international forestry mandate in Australia, subject to regulatory approval.

Olly Hughes, managing director, forestry, Gresham House, said: “This impressive first close is a testament to Gresham House’s long-standing track record in the forestry space and the [Scottish National Investment Bank’s] cornerstone investment will help to catalyse further investment in this asset class from institutional and private client investors.

“This flexible strategy allows investors to choose to use the carbon credits generated for offsetting purposes or sell the units to create an income.”

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