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World-scale forest and carbon project in Mozambique

Maputo, 21st January 2010: The Government of Mozambique has authorized the implementation of the Lurio forestry plantation and carbon sequestration project by Green Resources AS, Norway.   The project is primarily situated in Nampula province along the Nacala corridor, close to the railroad and the largest harbour in Northern Mozambique.  The 15 years project is the largest forestation project approved in Africa and is one of the best located new forest projects in the world.  The Government’s authorisation is based on a Framework Agreement signed in March 2009 allowing Green Resources to develop a feasibility study and proposal for a major forestation project in Nampula and Cabo Delgado provinces, based on a 50 years renewable land lease.

Green Resources has obtained permission to develop 126,000 hectares forest plantation for carbon sequestration, as well as producing wood for building materials, energy and pulp. In addition, Green Resources will assist in the establishment of 54,000 ha forests by local smallholders and companies. The new forest will be established on grassland and heavily degraded forest land.  The natural forest and wetlands within the area will be protected and set aside for conservation.  Green Resources’ operations will be FSC certified, the most demanding international certification for sustainable forest management. 

The forest plantations are established to supply a wide range of forest processing industries, including sawn timber, panel board, charcoal, electricity and transmission poles, as well as supply a future world scale pulp mill.  The investment is expected to generate USD 1 billion of annual revenues, add more than 5% to Mozambique’s GDP and make a major boost to the country’s export revenues. The project expects to employ 12,000 people, of which more than 1/3 is expected to be women. The total investments are expected to exceed USD 2 billion.       

Green Resources proposes to undertake major community development programs as part of the project, including schools, dispensaries, roads, agricultural support and community reforestation. The future availability of high quality kiln dried timber and panelboard will enable Mozambique to develop a new export oriented furniture and joinery industry based around small and medium sized businesses, creating 10,000s of additional work places.  Equally important, it will provide electricity and other infrastructure to rural areas of Mozambique, while there will be large additional investments in the roads, rail and harbour before the project is completed.  The project will contribute to food security through a separate program for improvement of current agriculture practices, supply of agriculture inputs and technical assistance, in coordination with the provincial and local authorities.

The Lurio project is projected to absorb more than 30 million tons of CO2 and make a significant contribution to the global fight against climate change.  Africa has only received minor benefits from the Clean Development Mechanisms (CDM) created for developing countries through the Kyoto protocol and established to combat climate change. Forestry is the one sector within the CDM mechanisms where Africa can become a major beneficiary of carbon finance.  Forestation is also a pre-requisite for successful reduction in emission from deforestation and destruction (REDD).  New plantations must be created to replace the harvesting of natural forest that is leading to deforestation. 

Forestry has tremendous potential for creating sustainable development. Forest investments are long term investments.  Trees are planted on degraded land in remote areas where there is little or no alternative use for the land or employment for the local populations. A larger percentage of forestry investments will reach the poorest part of the population than through any other investments made to mitigate climate change.  Forest investments go to rural area and forest investments are primarily spent locally rather than on imported capital goods.  

Background

Green Resources AS is a plantation, carbon offset, forest products and renewable energy company. The company was established in 1995 and is a private Norwegian company with 60 shareholders. It employs more than 3,000 people and has invested more than NOK 400 million (USD 80 million) in its African operations since its inception. Green Resources operates in Mozambique, Sudan, Tanzania, and Uganda.

Contacts

Arlito Cuco, Managing Director, Green Resources Mozambique. Tel. +258 21301002

Mads Asprem, Managing Director and CEO, Green Resources Tel: +47 6712 0030

www.greenresources.no