Carbon Sinks guarantee under EFSD+ supports Impact Fund Denmark’s investment in The New Forests Company
EU-backed risk-sharing supports sustainable forestry expansion, downstream processing and carbon sequestration in East Africa
Brussels, Belgium – 19 May 2026 – EDFI Management Company (EDFI MC), through its Carbon Sinks guarantee programme under the European Fund for Sustainable Development Plus (EFSD+), is supporting Impact Fund Denmark’s (IFDK) USD 25 million equity-like investment in The New Forests Company (NFC), a sustainable forestry platform operating in East Africa.
Under the Carbon Sinks guarantee programme, Impact Fund Denmark benefits from a 60% guarantee cover, equivalent to USD 15 million, or approximately EUR 12.8 million. The EU-backed guarantee is designed to reduce investment risk and support NFC’s next phase of growth across sustainable plantation forestry, downstream processing and carbon-related business lines.
Established in 2005, NFC is a forestry and land management company operating primarily in Uganda and Tanzania, managing approximately 25,000 hectares of plantation forests and conservation areas and producing timber products including sawn timber, kiln-dried lumber, transmission poles, biomass and wooden pallets, while the investment will support NFC’s downstream integration and expansion of its plantation programme, including expansion into plywood and sawmilling, the monetisation of carbon credits, and the consolidation of fragmented forestry assets through the acquisition and integration of an additional 40,000 hectares of regional land and forestry assets.
NFC’s business model combines commercial forestry with nature-based solutions, including carbon sequestration, biodiversity conservation and water resource protection. In Tanzania, the company also works with neighbouring communities through its “Misitu kwa Maendeleo” (“Forests for Prosperity”) programme, which supports local participation in fire prevention, biodiversity monitoring and plantation maintenance.
The project contributes to EU priorities under Global Gateway by supporting sustainable land use, mobilising private capital and strengthening rural value chains in East Africa. According to the project framing provided for this transaction, NFC operates in Uganda, Tanzania and Kenya, which are identified as EU Priority Countries, while all three are described as fragile states and Uganda and Tanzania are also classified as least developed countries. In addition, the “Partnering for Forests Uganda” programme, a flagship initiative under the Global Gateway strategy and a Team Europe Initiative, is well aligned with the objectives of this investment.
The Carbon Sinks guarantee plays an important role in de-risking long-term equity investments in forestry and other carbon sink projects, a segment that often faces limited access to commercial capital due to long investment horizons and delayed returns. By supporting IFDK’s investment in NFC, the guarantee is expected to help mobilise additional capital for sustainable forestry, value-added wood processing and climate-positive land use.
About EDFI Management Company:
EDFI MC is a multilaterally owned impact asset manager which delivers innovative development finance solutions that enable European DFIs, development banks and private sector investors to increase the scale and impact of their work. The company focuses on business models, technologies and geographies where other investors have not been able to operate at the desired scale given their resources and investment criteria. For more information, visit www.edfimc.eu.
EDFI Carbon Sinks is a joint guarantee programme designed by the members of the EDFI Association and EDFI MC under EFSD+, the financing arm of EU Global Gateway. The programme is designed to support European Development Finance Institutions (EDFIs) and their private and public co-investors to scale up equity investments in forestry and regenerative agribusiness companies investing in carbon sink projects. More information can be found here: https://edfimc.eu/what-we-do/edfi-carbon-sinks/
