Kenya Climate Innovation Centre (KCIC) and GATSBY Africa has launched a Commercial Forestry Program to catalyse the local demand for timber.
The programme has already identified 28 clients which it seeks to support.
The commercial forestry program launched by the two institutions will be key in mitigating the challenge of commercial timber by creating opportunities to close the current wood gap.
It is meant to ensure the sustainable growth of the Kenyan commercial forestry and provide access to quality inputs and technical support across the timber value chain.
The two institutions seek to support innovations that bridge the wood gap through responsible forestry harvesting, afforestation and reforestation while reducing the felling of trees.
Speaking Friday during the launch, Edward Mungai, KCIC CEO said, “KCIC will work with GATSBY to provide mentorship to commercial forestry clients to help them turn their technologies into sustainable businesses.”
He added that the program will provide opportunities to support the SME sector in business planning, management and building their capacities to develop and implement innovative service models.
“Expanding the private commercial forest resource base will help improve the country’s balance of trade and create more employment opportunities,” Edward explained.
This program will help relieve the pressure on natural forests, lower charcoal prices for millions of Kenyans and create jobs and increased incomes for hundreds of thousands.
The program will provide sector insight, research, publications and business case studies to validate the opportunity for commercial forestry investment.
“We aim to help your enterprise grow and also combat climate change. By unlocking the pipeline for commercial forestry, we look forward to walking this journey with you to create awareness and visibility on sustainable forestry,” Edward addressed the identified clients.
GATSBY on the other hand is currently supporting the commercial forestry sector through a long-term programme i.e. the Kenya Commercial Forestry Programme (KCFP).
The Ministry of Environment and Forestry’s (MEF) estimates that at least 28,750 Ha of commercial forestry and bamboo plantations need to be established yearly to meet the country’s 10% forest cover target by 2030. With an estimated cost of establishment between Kshs 80,000 – 100,000 per hectare, the maximum cost of establishing such an area could be estimated at Kshs 2.8 billion per annum.
The level of financing needed to achieve the government’s conservative restoration targets, as highlighted above, will require significant private investments in the planted forest sector
The nature of forestry means that investors in this sector face relatively high upfront costs and risks yet only realize returns in the long- term. To counter the conservative nature of such long-term investments, it is important that risks to such investments are lowered through embedding measures across the entire forest value chain that enhance the predictability of returns.
Research shows that Kenya’s forestry sector is unable to meet the country’s local demand for timber with an annual wood deficit that stands at an estimated 16 million M3 up from 12 million M3 in 2014. This deficit is being met through timber imports, which cost the country $1.56 billion in 2017, a staggering four-fold expenditure increase from $405 million in 2013.
In a business-as-usual scenario, this deficit is predicted to double to 34.4 million M3 by 2030.
The implementation of the Big Four Agenda which prioritizes in part, the development of a million affordable houses and an increase in the manufacturing sector’s contribution to the GDP by 10.8% by 2022 could mean that the situation is starker in the short to medium term.