February 5, 2017

The Investment Plan for Europe has made its first ag-related investment in Ireland, and its first forestry investment in Europe through two forestry-focused deals completed by the European Investment Bank (EIB) – one in the private sector and one in the public.

The Private Sector

The EIB announced it has partnered with the Ireland Strategic Investment Fund (ISIF) in a joint initiative to back a €112 million (US$120.6 million) forestry investment being launched by Dasos – a
Finland-based pan-European forestry investment fund.

This engagement with Dasos represents the first agriculturally-related project in Ireland, and the first forestry project in all of Europe to be supported by the €315 billion Investment Plan for Europe.

Under the terms of the plan, the EIB will provide €28.5 million (US$30.7 million) and the ISIF will provide €55 million (US$59.2 million) toward the total Dasos investment scheme, and additional investors are expected to be brought on at a later date.

Through the initiative — which was announced by Minister Andrew Doyle, European Investment Bank Vice President Andrew McDowell, European Commissioner for Agriculture, Phil Hogan, and Director of the Irish Strategic Investment Fund, Eugene O’Callaghan — Dasos plans to consolidate approximately 10,000 hectares of forests into a professionally-managed portfolio through direct acquisition, lease contracts, and afforestation in the coming years, with the resulting goal being a revitalization of the fragmented sector, and the assurance of a more predictable supply of wood.

“This significant investment in Ireland’s forestry sector will underpin continued expansion and development of the industry,” said Minister Andrew Doyle…”This announcement today will help ensure that this economic potential is realised [sic] by consolidating smaller forests under a single management plan. The mobilisation [sic] of timber from privately owned forests is a key objective of my department and this investment fund will make a significant contribution towards achieving this goal.”

The Public Sector

The Dasos investment plan was not the only capital commitment announced by the EIB. The bank also confirmed its agreement to provide a new €90 million long-term loan to Coillte, Ireland’s state-owned commercial forestry company.

The capital will be allocated to fund the cost of planting, forest management, and forest road construction and maintenance over the next four years throughout Coillte’s 440,000 hectares across the country. Overall, Coillte plans to replant more than 35,000 hectares of forests in alignment with international best practices, and construct and maintain more than 1,600 kilometers of roads, while also improving and maintaining 1,000 kilometers of public walking routes and mountain bike trails.

“Coillte is on a path to becoming the best forestry and land solutions company in Europe,” said Frank Leamy, CEO, Coillte. “This funding received from EIB combined with the refinancing arrangements secured with our five syndicate banks will be key in enabling us to achieve our strategic ambitions.”

Permanent Presence

Both of the aforementioned investment announcements by the EIB come only weeks after the bank opened its first permanent office in the country on December 9, 2016. Located in Dublin, the office is the first permanent presence in the country for both the EIB and the European Investment Fund, and was opened with the goal of enabling greater private sector investment in the country through the bank’s financial support.

The office will be led by Cormac Murphy, a banking specialist with 22 years of experience with the EIB in leading innovative corporate investment teams and developing new financial products across the European continent.

“In September, this government nominated Andrew McDowell to be the first Irish vice president of the European Investment Bank in 12 years,” noted An Taoiseach Enda Kenny T.D. upon the announcement of the bank’s plans to open its permanent Dublin location. “Today, the opening of the EIB’s new Dublin office represents the next stage of a stronger and broader relationship between the EIB and Ireland and I wish new head of the Dublin office Cormac Murphy the best of success.”

Before the official opening of the office, Michael Noonan T.D., Minister for Finance and Governor of the European Investment Bank, chaired the first meeting of a new EIB-Ireland Financing Group, consisting of members of relevant government departments and EIB senior management, during which the group discussed support for business investment backed by the EIB and European Investment Fund, including increased cooperation with the Strategic Banking Corporation of Ireland, the Irish Strategic Investment Fund, and its dedicated support for agricultural investment.

Since 1973 the EIB has provided investments totaling more than €15 billion in infrastructure, public service, and businesses across Ireland, however the bank has confirmed that additional capital investments in the agriculture sector will be announced in the coming months.

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration please contact Ms. Kiernan at lkiernan@globalaginvesting.com