Forest financing opportunities from the European Investment Bank
Forests are multifunctional ecosystems essential to landscape restoration, climate action and biodiversity protection. These forest facts are acknowledged in a new EIB publication, which draws attention to the financing possibilities for forestry from the EU’s bank.
Forests are multifunctional ecosystems essential to landscape restoration, climate action and biodiversity protection. They provide a variety of services to society, including flood control, protection against soil erosion, carbon sequestration and resilience to climate change in addition to timber production. These forest facts are acknowledged in a new publication released last month by the European Investment Bank (EIB), which draws attention to the financing possibilities for forestry from the EU’s bank.
EU Member States’ Common Agricultural Policy (CAP) Strategic Plans’ (CSP) provide opportunities to use grants and financial instruments to invest in EU countries’ forests. We have a long track-record with networking CAP knowhow in forest matters. For instance, a search of the ENRD website contains over 620 items of forestry information and the EIP website collates more than 800 related entries.
An important but sometimes less well known source of EU investment in forest production and ecosystem services is the EIB Group. This support can complement and combine with CSP interventions or be used independently from the CAP. The new EIB report notes that: “With more than 40 years of lending to the sector, the EIB Group, made up of the European Investment Bank and the European Investment Fund, has developed extensive expertise in forestry operations.” It confirms that the “investment needs of the forestry sector vary widely depending on the project type or the company. The EIB offers a broad range of financing, including large-scale loans, lending to other financial institutions to support small and medium companies, a blend of loans and grants, loan guarantees (for example, for small farmers) and equity financing.”
In the course of the last decade, EIB forest-based lending came to approximately €15 billion, improving the bank’s position as one of the biggest financiers in the sector. This EU financing has:
- helped mobilise over €1.5 billion of private and public investments in about 600 000 hectares of land restoration projects, and about 30 000 hectares of forest and natural habitats placed under conservation;
- improved more than three million hectares of degraded landscapes through sustainable forest management;
- committed about €220 million to private equity and venture capital funds in the EU and beyond, targeting sustainable forest and land management and the reduction of emissions caused by land degradation and deforestation; as well as
- provided over €1.3 billion in financing to EU projects aimed at disaster prevention, preparedness, response and post-disaster recovery.
Discover more in the EIB’s new report about its mandates to help EU Member States’ forest-based economies play vital roles in meeting the European Green Deal and the United Nations’ 2030 Agenda for Sustainable Development. These include examples such as a ‘close-to-nature forestry’ project in Romania; Ireland’s national forest company Coillte’s forest plantation and management programme for 2016-2020; plus a Portuguese pulp and paper plant’s improved environmental performance, replacing fossil fuel use with green energy to reduce greenhouse gas emissions.