Phaunos Timber

The Phaunos Timber Fund (AIM: PTF) announced that it has increased its stake in Norwegian company Green Resource AS, invesring a further US$2.36m in the privately owned company. The deal is the third of similar transactions and it takes fund’s total investment in Green Resources, including loans, to approximately $35m.

Phaunos Timber Fund is a closed ended investment company which aims to achieve long term returns through a diversified portfolio of timberland and timber-related investments. FourWinds Capital Management is the appointed investment manager of the company.

Green Resources manages over 14,300 hectares of timberland in East Africa, including forests in Tanzania, Uganda and Mozambique. Green Resources’ industrial operation, Sao Hill Industries (SHI), is East Africa’s largest sawmill and one of the largest transmission pole producers in the region.

There have been many positive developments in recent months at Green Resources. Earlier this year it agreed long term borrowing from the Norwegian development financial institution ‘Norfund’ and the IFC subsidiary of the World Bank. Through the agreements, Green Resources raised $25m.

The proceeds from the loans are being used for additional plantation development and for industrial operation improvements in Tanzania. The IFC loan is the largest ever to a private company in Tanzania.

In July, Green Resources’ plantations Mapanda and Uchindile were the first forest projects, outside of the US, to receive Voluntary Carbon validation (VCS). VCS is considered the world standard for voluntary carbon projects.

In August, Green Resources signed a framework agreement with the Government of Mozambique to establish a world scale forest plantation of up to 100,000 ha in Northern Mozambique.

Most recently, Green Resources’ subsidiary SHI signed a 20 year log supply contract with Tanzania’s Department of Forestry and was awarded a large contract with Tanzania Electric Supply Company Limited to provide transmission poles. The majority of these logs will be harvested from Green Resources’ eucalyptus plantations established in the late 1990’s in Uganda and Tanzania. Source: (ProactiveInvestors)

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