REG - Woodbois Limited - Conditional Award of Afforestation Project

WoodboisAnnouncement

11/04/2023 07:00

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RNS Number : 7213V  Woodbois Limited  11 April 2023

This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 which forms part of UK law by virtue of the
European Union (Withdrawal) Act 2018 ("MAR").

 

11 April 2023

Woodbois Limited

("Woodbois", "the Company")

Conditional award of carbon credit afforestation project in Gabon

Woodbois the Africa-focused forestry, timber trading and afforestation
company, has been verbally notified that it has been awarded a 40-year land
lease for a voluntary carbon credit afforestation project by the Gabonese
government conditional on completion of lease documentation. The news has also
been nationally reported on the Gabonese National Land Allocation Commission
website(1). When the final documentation is completed, this will enable the
Company to launch one of the world's largest assisted indigenous new forest
growth programmes. The Company estimates that this has the potential to
sequester more than 30 million tonnes of CO2 over the life of the project, in
an area of up to 50,000 hectares, which is roughly the size of the New Forest
in the UK.

On completion of the lease documentation the Company will commence a 4-year,
2,000 hectare pilot programme to demonstrate the afforestation potential of
the land (the "Pilot Phase"). Subject to the results of an Environmental and
Social Impact Assessment and a High Conservation Value study, the Company will
be approved to utilize the full 50,000 hectare land area (the "Implementation
Phase").

Carbon Credits

The project will be designed to deliver high quality carbon and biodiversity
credits that will be verified by an internationally recognised carbon
standards agency. Additional monitoring will take place, supported by an earth
observation group and the government of Gabon. The Company estimates that the
project has the potential to generate more than 30 million carbon credits over
its 40-year life-cycle. The carbon sequestered in this afforestation
initiative is enduring and not susceptible to leakage, as Gabon has pledged
through its second NDC(2) to maintain its carbon-neutral status both now and
beyond 2050 without conditions. The resulting credits will not rely on
avoidance or baseline measurements that can artificially inflate emissions
reduction promises.

The first credits are expected to be issued in 2028, after the mandatory
minimum 5-year accreditation period that the project requires under the Carbon
registry rules, although the trees and soil of the new forest area will start
to absorb carbon and enhance biodiversity immediately on commencement of the
project. Under National Ordinance(3), the Gabonese government will be entitled
to 20% of the carbon credits generated over the lifetime of the project.

The Company is reviewing the optimum funding of the Pilot Phase which it
estimates will cost $5 million. The Company currently expects to reinvest
proceeds from the sale of carbon credits to help fund the project. External
funding at the project level will also be required. The Company is currently
examining a number of funding possibilities and is confident that a range of
partners will be willing to participate in the project both at the Pilot Phase
and Implementation Phase.

 

The proposed new forest

This landscape afforestation programme will take place in the regions of
Ngounié and Nyanga in southern Gabon, regenerating unutilised land, which
currently has very low levels of carbon stock. Once completed, the indigenous
forest of up to 50 million trees, predominantly of the indigenous okoumé
species, will cover an area approximately the size of the UK's New Forest.
This nature-positive, carbon-absorbing project will be one of the largest
commercially assisted new forest growing programmes yet announced in the
world.

The initial planting scheme will be designed to mimic natural forest re-growth
and Woodbois believes that the biodiversity and habitat creation benefits of
the new forest will be significant. In addition, a portion of the project area
is to be maintained in its current state to protect savannah ecosystems and
provide wildlife corridors. There will be no commercial tree cutting for at
least 40 years, by which time the biodiverse indigenous forest is expected to
be self-sustaining.

The initial planting scheme will be managed by the Woodbois Nature-Based
solutions team and executed by local employees. At the full Implementation
Phase, Woodbois plans to create around 1,000 jobs for local people in the two
regions, utilising the established skills of indigenous people but also
providing training in areas such as silviculture, field monitoring, fire
management, carbon project design and administration.

The Ngounié and Nyanga Forests Programme marks the first inward forestry
investment from a UK-listed company into Gabon since the country's admission
to the Commonwealth in June 2022, and is the first to be launched by
CarbonArbor, Woodbois' wholly owned Nature-Based Solutions subsidiary.

 

Forestry in Gabon

Woodbois currently has 170,000 hectares of commercial forestry concessions in
Gabon, sustainably producing African hardwood for export. It is committed to
achieving full forest certification in Gabon as soon as possible in 2023/4 and
has already completed approximately two thirds of the process.

Gabon is one of the few countries in the world that absorbs more CO2 than it
emits. It led the African delegation at both the COP26 climate talks in
Glasgow and COP27 in Sharm El-Sheikh, as well as hosting the 2022 Africa
Climate Week and the One Planet Summit in March 2023 which was entirely
dedicated to tropical forests. Analysis by the Organisation for Economic
Co-operation and Development (OECD) in 2021 rated Gabon the world's leading
country for cost-efficiency of forest carbon sequestration.

 

Paul Dolan, CEO of Woodbois, said "This assisted forest development is
designed to achieve a balance between the benefits for nature, local
communities, Gabon and the Company by delivering a project that is
economically sustainable and which helps support the critical world resource
of the Congo basin rainforest. We know Gabon well, having operated in the
country for more than two decades. The Gabonese government's commitment to the
protection of its forests and more broadly to the environment is globally
recognised. We look forward to completing the terms of the lease agreement
with the Government of Gabon and will keep all stakeholders updated
accordingly.  Woodbois is keen to be at the forefront of afforestation and to
work with other African Governments to replicate projects of this kind across
the region."

 

(1)
https://www.cnat-gabon.com/8eme-session-pleniere-de-la-cnat-plus-de-500-000-hectares-au-profit-de-lagriculture-et-les-forets-communautaires/
(https://www.cnat-gabon.com/8eme-session-pleniere-de-la-cnat-plus-de-500-000-hectares-au-profit-de-lagriculture-et-les-forets-communautaires/)
 

 

(2)
https://climatepromise.undp.org/what-we-do/where-we-work/gabon#:~:text=Through%20its%20second%20NDC%2C%20Gabon,tCO2eq%20per%20year%20beyond%202050
(https://climatepromise.undp.org/what-we-do/where-we-work/gabon#:~:text=Through%20its%20second%20NDC%2C%20Gabon,tCO2eq%20per%20year%20beyond%202050)
.

 

 (3  )MINISTERE DES EAUX, ET FORETS, DE LA MERDE L'ENVIRONNEMENT CHARGE DU
PLAN CLIMAT ET DU PLAN D'AFFECTATION DES TERRES Ordonnance n°019/2021 du
13 septembre 2021,

 

For further information contact:

Enquiries:

 

 Woodbois Limited                                                                   

 Paul Dolan - CEO                                                                  + 44 (0)20 7099 1940

 Michael Floyd - Head of Carbon Solutions

  
 Canaccord Genuity (Nominated Advisor and Joint Broker)                            + 44 (0)20 7523 8000

 Henry Fitzgerald-O'Connor

 Harry Pardoe

 Gordon Hamilton

 Novum Securities Limited (Joint
 Broker)

 +44 (0) 20 7399 9427

 Colin Rowbury

 Jon Belliss

  

 

Background on Woodbois

 

Woodbois Limited (AIM:WBI) is an African-focused forestry company, divided
into three distinct, but highly complementary divisions comprising the
production and supply of sustainable African hardwood products, the trading of
timber and timber products, and a reforestation and carbon credit division.

Woodbois' forestry division has production facilities in Gabon and Mozambique,
managing a total of c470,000 hectares of natural forest concessions. The
trading division comprises an experienced team of timber specialists, who
source and supply sustainable timber to a global customer base. Its
proprietary technology developed in-house, captures, stores and presents data,
providing a matching engine to build scale and optimise trading opportunities
with its global customer base.

The Company's carbon sequestration and trading division aims to generate
voluntary carbon credits for corporate partners through the delivery of
large-scale reforestation projects. The conditional lease announced today is
its first project.

The Company's focus on the transparency and sustainability of its timber
operations has been recognised by The Zoological Society of London, which
ranked Woodbois joint eighth in its Sustainability Policy Transparency Toolkit
('SPOTT'') ESG policy transparency assessments for the worldwide timber and
pulp industries for 2022.

The Company agreed a new partnership with World Forest ID, which will enhance
the traceability and identification of timber, originating from the company's
forest concessions in Gabon. World Forest ID is an international
organisation which is revolutionizing the protection of forests through the
application of science-based origin tracing and species identification. World
Forest ID is building an extensive global library of reference samples, from
various forest regions, for use in cross verification.

Please follow the Company on Twitter: @WoodboisLtd

 

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