The European Investment Bank has confirmed a new €90 million long-term loan to the State-owned forestry group Coillte, and is teaming up with the Ireland Strategic Investment Fund (ISIF) to back a new €112 million investment in privately-owned forests across the country.
The EIB, the financial arm of the European Union, offers low-cost access to capital markets, typically for large-scale infrastructure projects. One of the world's largest financiers for forests, the bank has invested €4.5 billion in forestry-related projects globally over the last five years.
The EIB, which provided more than €825 million for long-term public-sector investment in Ireland last year, said the new investment with Coillte would finance the cost of planting, forest management and road construction and maintenance over the next four years.
Under the investment more than 35,000 hectares will be replanted, and over 1,600km of forest roads constructed and upgraded. The scheme will also improve maintenance of 1,000km of publicly accessible walking routes and mountain bike trails.
Investment backed by the EIB loan will take place in Coillte’s 440,000 hectare estate at sites across the country, it said.
The €90 million project was one of two new forestry-related initiatives confirmed by EIB vice president Andrew McDowell on Friday.
It said the bank was also teaming up with the Ireland Strategic Investment Fund (ISIF) to back an initiative expected to support €112 million of new investment in privately-owned forests across Ireland.
The agreement with Dasos Capital is the first Irish agricultural project and first forest project in Europe to be supported by the Investment Plan for Europe, which is seeking to unlock €315 billion in new investment.
Dasos, a specialist forestry investment fund, is to provide €112 million, with the ISIF giving €55 million and the EIB a further €28.5 million for the project, which will seek to improve forest management and strengthen the supply of wood for commercial use.
By supporting direct land acquisition, lease contracts, afforestation and other forms of land management, the Dasos initiative intends to develop into a professionally managed portfolio of up to 15,000 hectares of forests across Ireland in the coming years.
The EIB, which is one of the world’s largest financiers for forests, has invested €4.5 billion in forestry-related projects globally over the last five years.
Overall, the bank has provided low-cost loans amounting to more than €15 billion in Ireland since 1979. It expects funding commitments locally to top €1 billion for the first time in 2017.