The International Finance Corporation (IFC), the member of the World Bank Group that focuses on the private sector in developing countries, is to support the development of a huge eucalyptus plantation in Mozambique.
IFC has signed an agreement with the Portuguese paper company Portucel to advise the company on how it can strengthen the sustainability of its forestry operations in Mozambique.
Portucel is investing $2.3 billion on an integrated eucalyptus plantation, pulp and energy project in the central provinces of Manica and Zambezia. The project could generate 7,500 direct jobs.
IFC's support will include assessments of environmental and social impact, community engagement, community development planning, and help with the implementation of community and enterprise investments.
According to Portucel's chief executive, Jose Honorio, "Portucel is committed to the long term success of its investment in Mozambique, and we are reaching out to partner IFC and the World Bank Group to help us develop forestry in Mozambique in line with the strongest international environmental and social standards".
The IFC chief executive, Jin Yong Cai, pointed out, "Mozambique needs large scale investment to diversify its economy beyond extractive industries and create employment. IFC and our partners are working to engage with local communities and ensure that the benefits of private sector investment are broadly shared".
The Mozambican government awarded Portucel land use concessions on 356,000 hectares in Manica and Zambezia.
Phase I of the project involves a greenfield plantation of 60,000 hectares of eucalyptus. In addition to advisory support, IFC is considering an equity investment in Portucel's Mozambique operations.