1. Presentation to: HBS Impact Investing Alumni Interest Group
September

2. George McPherson and Kevin Tidwell Managing Directors at Criterion Africa Partners
George McPherson is a Managing Director at CAP, responsible for capital formation and business development.  Prior to Criterion Africa Partners, he was with Global Environment Fund where he was responsible for capital formation and business development. He has over 15 years of private equity experience in the energy and natural resource sectors.  
George holds a Master of Business Administration from George Washington University. 
Kevin Tidwell is responsible for sourcing, structuring, and monitoring investment opportunities as a Managing Director for Criterion Africa Partners (CAP). He has worked in sustainable forestry investments in Africa and Latin America for the past twelve years. Kevin also spends a portion of his time working for the Grantham Foundation for the Protection of the Environment where he is focused on climate-change related investment opportunities.
Kevin has a Master of Environmental Science from the Yale School of Forestry and a Master of Business Administration from the Yale School of Management.

3. Criterion Africa Partners
Photo: Peak Timbers, Piggs Peak, Swaziland
Employee-Owned Management Company
Experienced Team and Proven Strategy
Unique Opportunity for Investors
Team spun out of Global Environment Fund’s Africa Sustainable Forestry Fund in 2016
New company catalyzed by the Grantham Foundation for the Protection of the Environment
Experienced investors in the forestry sector in select countries in sub-Saharan Africa since 2001
Led by Dr. Ole C. Sand, former head of forestry sector for IFC; responsible for $2 billion of forestry and associated downstream investments in emerging markets
Team of eight has worked together since 2008; combined 125 years of experience in private equity, forestry, and industrial operations
Largest private owner of forestry assets in sub-Saharan Africa
Completed eight investments in five countries in ASFF since 2010
Committed to Forest Stewardship Council (FSC) Principles and Criteria and strong environmental, social and corporate governance (ESG) practices
Favorable long-term economic growth / demographics and increasing demand for forest products and wood-based energy
Insufficient information, capital and management in SSA has created highly inefficient markets
Positioned to (1) rehabilitate & restructure existing plantations to enhance productivity, (2) develop downstream manufacturing to produce high margin products needed in fast-growing markets in Africa, (3) utilize wood waste to generate biomass energy to displace fossil fuels

4. Investors

5. African Forestry Overview
Africa consumes 20% of the global timber harvest annually
Population growth, urbanization, and demographics are driving economic growth
Accelerating urban population requires infrastructure and shelter, stimulates demand for building materials and energy
Current wood demand in Africa is ~700m cubic meters
75m m3 per year is used as industrial round wood; demand is growing at 5% per year
625m m3 per year is used as fuelwood and demand is growing at 2% per year
This imbalance generates three unique investment opportunities:
1) Generate biomass energy to replace high-cost fossil fuels
2) Improve brownfield plantation assets to increase yields/productivity
3) Locally produce select forest products sold at import parity prices
Photo: MTO, Tsitsikamma, South Africa
Sources: United Nations Population Division; CAP Calculations
Sources: Food and Agricultural Organization, Indufor, and CAP Estimates

6. Africa Sustainable Forestry Platform
Investment Approach
Create value, catalyze development and environmental impact by investing in forestry assets and production capacity to address the need for basic building materials in sub-Saharan Africa.
Capital Available:
~$130 million invested and an additional $150 million being raised
Current Assets:
107,000 hectares of Forest Stewardship Council (FSC) certified timber assets
54,000 hectares pine, ~7.2 million m3 of standing timber
45,000 hectares eucalyptus, ~ 4.5 million m3 of standing timber
8,000 ha teak, ~ 0.5 million m3 of standing timber
568,000 hectares of FSC certified, low-impact natural forest management
54,000 hectares of managed conservation land
Industrial: 7 sawmills, 3 biomass energy plants, 2 veneer/plywood plants and 2 pole treatment plants
Future Investments:
Industrial operations to build and supply basic building materials in Africa to substitute imports
Biomass energy generation plants to eliminate the use of fossil fuels widely used in Africa
Existing plantations with opportunities to improve productivity and enhance value with higher and better use (e.g. avocado and nut production)

7. Impact Through Import Substitution
Downstream Manufacturing of Select Building Materials in Sub-Sharan Africa
Urbanization is driving imports of basic timber products such as lumber, plywood, utility poles and composite panels
Many SSA plantations are unable to maximize the profit of the wood harvested because they focus exclusively on low- margin lumber production which can be expensive, wasteful and prone to informal competition
Manufacturing plants producing plywood, particleboard and medium density fiberboard can increase the profitability of wood harvested while generating attractive investment returns
Focus on products being imported in large quantities from Asia and LatAM to benefit from high import parity prices
SSA Imports of Solid Wood Products
Excluding SSA Bilateral Trade
Source: International Trade Center (ITC), Geneva Switzerland

8. Economic Impact of ASFF I Portfolio in 2016
Logs and wood products sold to ~ 800 SME firms creating jobs downstream
Plantations: ha
Natural Forest: ha
Doors, window frames, roofing trusses, lumber, and furniture
Sustainable Harvest 2.0 m m3
Markets
Includes ~ $50 m in FX revenues
Housing
(Sawlogs)
Infrastructure
(Poles)
Mining
(Mining Timber)
Energy
(Biomass)
Other
(Pulp, Panels, Etc.)
720,000 poles, providing 36,000 km of electricity lines
Revenue
$148 m
Retained Earnings ($7 m)
~ 8,900 jobs supported
Wages and Salaries
($28 m)
Taxes Paid ($10 m)
Other Expenses, including SFM & ESG ($25 m*)
Supporting over 3,000 SME firms
SME Procurement
($63 m)
CapEx and Investment ($15 m*)

9. Climate Impact of CAP Forestry Investments
Compared with the universe of registered CDM projects (see below), the projected investment cost relative to the projected average annual carbon sequestration/offset is lower for forestry and biomass steam investments than for the majority of CDM project types.
15m tons of CO2 stored in standing trees on 102,000 hectares, with gross average CO2 sequestration of 2.5m tons per year
54,000 hectares of conservation lands managed and protected or restored for biodiversity and wetlands

10. Projected Impact of ASFF II Portfolio
Climate
Employment
Local Taxes
Consumers
Development
Plantations
(50k hectares)
1,000,000 gross tons C02 sequestered each year; up to 50k ha of conservation land protected
3,000 employees and contractors in silviculture, harvest, transport
In rotation, plantations are expected to pay $10 million per year in taxes
Providing raw materials (about 1 million m3 per year) to address a growing wood shortage in Africa
Provide stable employment and skills development in rural regions
Downstream Processing
(8 plants)
Supplying market with climate-friendly building materials
1,500 direct employees in manufacturing facilities
Based on revenue of $80 million, could be expected to pay $10 million per year in local taxes
Providing consumers with quality building materials, replacing imports
Creating jobs and development locally, replacing imports of building materials; providing markets for small holders
Biomass Energy
(10 boilers)
130,000 tons of avoided fossil fuel CO2 each year, helping meet renewable energy targets
300 person-years in construction; 80 sustainable jobs
Based on revenue of $15 million, could be expected to pay $2 million per year in local taxes
Providing energy-intensive businesses with affordable, reliable renewable energy
Providing businesses with affordable, reliable renewable energy, displacing fossil fuels

11. Contact Details
George McPherson Managing Director
Kevin Tidwell Managing Director
South Africa Jonkershoek Valley Road, Stellenbosch, 7600 South Africa United States 2 Bethesda Metro Center - Suite 440, Bethesda, MD 20814