MICROCAPITAL BRIEF: AXA, FMO, Mirova, Novastar Funds Invest $28m in Equity in Komaza Group for Tree Planting by Rural Farmers in Africa

Four investors recently agreed to place equity totaling USD 28 million in the Komaza Group, a Kenya-based forestry company. Komaza plans to harness the funding to continue its work with smallholder farmers in Africa to use their idle land for growing trees.

Tevis Howard, Komaza’s Founder and CEO explains, “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, established in 2006 and headquartered in the city of Kilifi, partners with groups of “rural farmers to plant woodlots that [they] manage collectively as a ‘virtual plantation.’ Farmers contribute land and labour, and are paid a fair price for their harvested trees.” Komaza also provides services such as training, planting inputs, maintenance support, harvesting services, and opportunities for farmers to engage in wood processing and sales. As of 2020, Komaza has planted trees with approximately 25,000 partner farmers. The company has not published its financial data.

The participating investment vehicles are the AXA Impact Fund: Climate & Biodiversity; Mirova’s Land Degradation Fund; Novastar Ventures East Africa Fund; and the Dutch Fund for Climate and Development, which is managed by the Netherlands Development Finance Company, a public-private partnership also known by its Dutch acronym FMO. FMO invested USD 7.5 million of the total equity raise, but the sizes of the other investments and the stakes taken in Komaza remain confidential.

By Madigan Ruch, Research Associate

Sources and Additional Resources

FMO news release
https://www.fmo.nl/news-detail/677dc88f-9c9a-4039-a7bb-e312c8f632d8/fmo-supports-micro-forestry-company-komaza-to-grow-trees-and-smallholder-farmers-income

Komaza homepage
http://www.komaza.com/

FMO homepage
https://www.fmo.nl/

Mirova homepage
https://www.mirova.com/

AXA homepage
https://www.axa.com/

Novastar homepage
https://novastarventures.com/

Previous MicroCapital Brief on FMO
https://www.microcapital.org/microcapital-brief-findev-canada-fmo-loan-72m-to-latin-american-agribusiness-development-laad-for-sme-finance/

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