FMO signed a USD 7.5 million investment in Komaza Group Inc., as part of a USD 28 million series B round with Novastar Ventures East Africa Fund, AXA Investment Managers (through the AXA Impact Fund: Climate & Biodiversity) and Mirova’s Land Degradation Neutrality Fund. Komaza is a forestry company designed to get Kenyan smallholder farmers out of poverty and to address a large and fast-growing wood market in Africa. FMO’s investment is funded by the Dutch Fund for Climate and Development (DFCD).
Many smallholder farmers in Africa leave large parts of their land untouched, and only plant what they need to survive. Komaza offers these farmers the option to plant fast growing trees, like eucalyptus and melia (a native, drought resistant species) on their untapped parts of land. This provides farmers with the opportunity to generate additional income over a longer period of time.
Komaza and its partner farmers plant woodlots that are managed collectively as a “virtual plantation.” Farmers contribute land and labour and are paid a fair price for harvested trees. Komaza provides them with training and the support across the entire value chain, from supplying seedlings and other planting inputs to establish tree farms, during the lifetime of the trees and ultimately the company harvests and processes the wood to local markets.
Komaza has already planted with more than 25,000 partner farmers. The first plots that were planted are starting to generate their first income for Komaza’s partner farmers. In addition to supporting smallholder farmers, Komaza aims to plant 2,500 hectares per year in its greenfield operations and plant 3 trees for each tree cut down in its brownfield operations, yielding significant carbon sequestration.
Jaap Reinking, Director Private Equity at FMO commented: “We are very proud to support this innovative and promising company with large scale social and environmental impact in these challenging times. Not only is the investment in Komaza fully aligned with our impact agenda; it is also a real game changer as it is one of the first deals for which we have completed a virtual due diligence!”
“For every acre of habitat lost on Kenya’s coast, more species go extinct than anywhere on the planet” says Tevis Howard, Komaza’s Founder and CEO. “Massive challenges need ambitious companies fighting to create value and align incentives around solutions that work for both people and planet. At Komaza, our vision is to become Africa’s largest forestry company, by partnering with farmers to provide a sustainable and hyper-scalable domestic supply of wood. As a result, farmers get a climate-resilient, zero-risk, source of wealth creation for their families, and investors get commercial returns, all while relieving the intense pressure on remaining natural forests.”
Komaza has set itself the goal to plant 1 billion trees with 2 million farmers across 10+ countries by 2030. FMO’s funding will support the growth of Komaza within Kenya and potentially across sub-Saharan Africa.
-END-« Back to Member News