Setting up a teak plantation project with the company FORM Ghana Ghana

Context of the service

$50 million in concessional loans have been set aside by the Forest Investment Program (FIP) to finance private-sector-led REDD+ projects in the eight pilot countries, including Ghana. These projects had to be submitted to the FIP, with a view to their competitive selection. The AfDB called on SalvaTerra to help identify and structure projects in Ghana, Burkina Faso and DRC.
In Ghana, after multiple discussions, FORM Ghana was identified as a potential promoter of a reforestation project of 12,500 ha (teak and indigenous species) in the Brong Ahafo region, for a total budget of 37.5 million dollars, including 10.3 million concessional loans from the IFP. This reforestation, carried out on severely degraded land, is based on the signing of a 50-year public-private partnership between FORM Ghana and the Ghana Forest Service (GFS).

Services provided

After identification of FORM Ghana following multiple interviews, the preparation of the project idea note started with the comprehensive analysis of all forest and environment policy documents, in particular the reforestation policies put in place from 2001 to 2013.
After that, the note was drafted, with two distinct parts:
- Compliance with FIP investment criteria: carbon sequestration potential using FAO's EX ACT tool, replication potential, cost/benefit ratio in USD/tCO2eq, technical feasibility, environmental and social co-benefits, compliance with AfDB and FIP safeguard clauses;
- Practical engagement modalities: description of activities and their innovative character, study of the FSC certified teak market, Business Plan and cash flow plan, potential risks and mitigation measures).
The project idea note was rated excellent and ranked 3rd out of the 11 project idea notes presented.

Summary of the service

Preparation and competitive selection of the project (3rd out of 11 projects presented) submitted to the private window of the Forest Investment Program (FIP): FSC and VCS certified teak plantations on 8,300 ha in the Brong-Ahafo Region. Budget: $37.5 million. Holder: FORM Ghana.