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Govt closes in on GEF agreement on Viphya

Government has exchanged a memorandum of understanding (MoU) with Total LandCare (TLC) and Global Environment Fund (GEF), a $1 billion (about K450 billion) multinational private equity fund, targeting reforestation activities in the Viphya Plantation.

Minister of Natural Resources, Energy and Mining Atupele Muluzi confirmed the engagement in an interview yesterday, saying discussions with the two firms are at an advanced stage.

Atupele: The initiative is welcome
Atupele: The initiative is welcome

“GEF and TLC have proposed a long-term partnership with government to replant up to 30 000 hectares over the next 10 years. This initiative is very welcome as there is almost no remaining mature timber left in Viphya outside of Raiply,” he said, following a visit Raiply Malawi in Chikangawa last Wednesday.

Muluzi noted that encroachment on Raiply has been occurring due to lack of trees elsewhere.

“Raiply has performed well and conducted significant replanting efforts. This is the reason their concession area is still intact,” he said, noting that commercial scale operations should be replicated in the rest of the plantation as they are the only viable option for long-term sustainability in the forestry sector.

Bunderson: This wold require a investment of $35 million
Bunderson: This wold require a investment of $35 million

Minister of Industry and Trade Joseph Mwanamvekha also had positive comments regarding the proposed investment.

“The GEF/TLC joint venture project featured prominently in my ministry’s business compendium. We are committed to the vision of the President in promoting foreign direct investment and we believe that a project of this nature would contribute significantly to the economy of Malawi,” he said in an interview.

Mwanamvekha noted that “modern manufacturing facilities would be built to create value added products, which would be exported to generate valuable forex.”

Business News has been given further details on the substance of the proposed MoU, which calls for large-scale reforestation efforts.

Government may allocate up to 30 000 hactares of previously harvested or unplanted land to this endeavour with primary areas of focus on where there is no more standing timber.

The first 10 years of the project would target tree planting in areas that have been decimated by small-scale sawmillers where little to no reforestation activities have taken place, according to contents of the MoU.

TLC is currently operating in the Viphya on 2 600 hactares where they have planted over 900 hectares of trees in the last three years.

“Over the next 10 years, the forestry project envisioned by this partnership could potentially manage more than 30 000 planted hectares with an annual, sustainable harvest of approximately 800 000 cubic metres.

“This would require an investment of at least $35 million (K16 billion),” said Richard Bunderson, general manager of TLC’s Viphya project.

He said should Malawi Government choose to support downstream manufacturing, GEF would target an additional industrial investment at a minimum of $15 million (K7 billion).

GEF has invested over $250 million (K113 billion) in sustainable forestry companies around the world over the past 15 years, primarily in sub-Saharan Africa and seeks to invest in plantation development and management, bioenergy and value added wood processing. n

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