A €200m forestry fund has been launched by major international asset management firm Gresham House, which aims to develop a 12,000ha portfolio of new and existing Irish woodlands.
The UK-based investment firm has linked up with State forestry body Coillte to launch the new initiative.
Gresham House will supply the capital needed to create the new forests, with Coillte providing the expertise to manage the estate.
Gresham House claimed that its Irish strategic forestry fund had already attracted €35m from Irish investors, including a €25m cornerstone investment from the Ireland Strategic Investment Fund (ISIF), Ireland’s sovereign development fund.
Along with purchasing land for planting new forests, Gresham House said its fund will also “acquire existing forest assets”.
“This initiative will create a platform for enhancing Ireland’s forestry sector, delivering real change and momentum and making a meaningful contribution to Ireland’s crucial afforestation ambitions,” said managing director of Gresham House, Ireland, Patrick Lawless.
“The combination of skills the fund brings together will be key to unlocking and developing new forests in Ireland, helping to support the ambitions of the Irish Climate Action Plan. The additional support and momentum ISIF will bring to the fund will also be central to the fund’s success,” he added.
There is an urgent need for Ireland to meet stretching climate action targets
Coillte chief executive Imelda Hurley said the State body was pleased to work with Gresham House and have ISIF as a cornerstone investor in what she described as an “important initiative”.
“There is an urgent need for Ireland to meet stretching climate action targets and creating new forests is integral to the achievement of these targets.
"The Government’s national afforestation target is 8,000ha per annum and the long-term target is to achieve 18% forest cover. Currently, forest cover in Ireland is 11.6% compared with an EU average of 40%,” Hurley pointed out.
“The new Irish strategic forestry fund represents an important first step towards accessing the capital required to enable the creation of new forests, which will deliver the multiple benefits of forests for climate, nature, wood and people,” she said.
Concerns have been expressed by farm organisations and politicians that the entry of foreign investment funds into the Irish land market will increase competition and prices, and result in farmers ultimately being outbid for ground.
Farmer representatives have also questioned the advisability of allowing investment funds to draw down State-supported planting grants and forestry premiums, arguing that these should be targeted solely at farmers.