Impact Fund Denmark’s Paraguay forestry investment supported by EDFI Carbon Sinks guarantee
EU-backed risk-sharing supports sustainable forestry expansion, native forest restoration and carbon sequestration in Paraguay.
Brussels, Belgium – 31 Aug 2026 – EDFI Management Company (EDFI MC) announced today its support, through its Carbon Sinks guarantee programme under the European Fund for Sustainable Development Plus (EFSD+), for Impact Fund Denmark’s (IFDK)’s USD 20 million equity investment in SA Impact Forestry Fund II (SAIFF II). Under the Carbon Sinks programme, IFDK will benefit from EUR 8.7 million (USD 10.0 million) guarantee cover, helping enable investment in sustainable forestry in Paraguay.
The investment supports the expansion of sustainable forestry in Paraguay by converting degraded cattle-grazing land into certified commercial plantations and restored native forests. Paraguay falls within the geographic scope of the EDFI Carbon Sinks programme, which covers the Americas and the Caribbean alongside other eligible regions.
SAIFF II targets a fund size of USD 200 million and aims to manage a total of 44,200 hectares. Around 70 percent of the land is expected to be used for timber production, while 30 percent will be reserved for conservation and ecological restoration, creating a blended model of commercial forestry, biodiversity protection and climate action.
Impact Fund Denmark’s investment in SAIFF II builds on its previous commitment to the first SA Impact Forestry Fund. The guarantee is needed because an additional investment in Paraguay’s forestry sector would otherwise exceed IFDK’s internal concentration limits; with EDFI Carbon Sinks support, the risk is reduced to a manageable level and enables IFDK to proceed with the new USD 20 million commitment.
The fund’s business model combines revenue from timber, pulp production and carbon credits, supported by proximity to processing and export infrastructure. This integrated approach is designed to generate commercial returns while contributing to climate mitigation, ecosystem restoration and more resilient rural economies.
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/
About Impact Fund Denmark
Impact Fund Denmark, formerly IFU, is Denmark’s development finance institution and impact investor. The institution invests in projects and funds that contribute to sustainable development and mobilise capital in emerging and developing markets.
About SAIFF II
SA Impact Forestry Fund II is a Paraguay-focused sustainable forestry fund managed by Astarte Capital Partners and Silvipar AB. The fund aims to convert degraded or low-productivity land into sustainable plantation forestry while reserving part of the land portfolio for conservation and restoration.
About EFSD+
The European Fund for Sustainable Development Plus (EFSD+) is the financing arm of the EU’s Global Gateway strategy. It provides guarantees and blended finance instruments to support investments that contribute to sustainable development, particularly in fragile and emerging markets.
About Global Gateway
Global Gateway is the European Union’s strategy to boost smart, clean, and secure connections in digital, energy, and transport sectors, and to strengthen health, education, and research systems across the world. It aims to mobilise up to €300 billion in investments between 2021 and 2027 to support sustainable and trusted partnerships globally.
