Environmental & Social Review Summary
Project Number
26506
Company Name
Green Resources Limited
Date ESRS Disclosed
Mar 14, 2008
Country
Tanzania
Region
Africa
Last Updated Date
Jun 3, 2021
Environmental Category
B - Limited
Status
Completed
Previous Events
Approved : Apr 20, 2009
Signed : May 1, 2009
Invested : Mar 15, 2010
Sector
Logging
Industry
Agribusiness and Forestry
Department
Regional Industry - MAS Africa
Project Description
Deforestation in Africa currently affects about 4 million hectares (ha) of land annually (55% of total global deforestation). Tanzania has lost 15% of its forest area since 1990, Uganda 25% and Mozambique 4%. The three countries lose on average a combined area of 550,000 ha per year through harvesting for firewood and charcoal, burning and conversion to low-yield grazing and agricultural uses. The impact of deforestation globally, through burning, is estimated to contribute 20% of the recent rise in CO2 in the atmosphere. In addition, rural populations in Africa spend up to 50% of their day securing firewood from these rapidly diminishing forests.
Green Resources AS (GRAS) is a plantation, forest products; renewable energy and carbon offset company with an active focus on addressing the damage created by deforestation in the East Africa region. The Company, which was established in 1995, is a private, profit oriented Norwegian company with 60 shareholders. It employs 2000 people and has invested more than $35 million in its African operations. Green Resources has activities in Tanzania, Uganda and Mozambique.
GRAS is implementing an investment program over the next three years to expand and modernize its saw mill operations in Sao Hill, Tanzania, and establish additional plantations in Tanzania, Uganda and Mozambique. The program will include:
- achieving internationally recognized certifications including FSC, CDM and ISO 14001/9001;
- planting 9,000 ha of land with eucalyptus, pine, teak and indigenous trees;
- expanding its equipment for harvesting and wood transportation;
- modernizing an existing saw mill to increase efficiencies and capacity;
- retrofitting a small wood waste to energy plant at the mill, and installing a new wood waste-fired Combined Heating and Power (CHP) facility; and
- associated miscellaneous capital expenditures.
GRAS’s plantation and wood waste-to-energy projects will address the issues created by deforestation by:
- increasing the amount of trees planted every year, thereby functioning as a carbon sink,
- creating carbon offsets that will add to revenues,
- generating electricity from fuels produced by sustainably managed forests,
- providing a source of power poles for electric power distribution systems, and
- generating significant employment in rural areas for some of the poorest people in the countries where it operates.
Approximately one person is employed for every plantation hectare planted. In addition, the increase in available electricity will decrease the demand for firewood, and will improve the living conditions of surrounding communities.
Green Resources Limited (GRL) is the largest afforestation company in Africa. GRL expects to plant 5,000 ha in 2008 and to increase to more than 10,000 ha/year by 2011. GRL’s Tanzanian plantations have received 233,000 tons of Voluntary Emission Reductions (VERs), certified by SGS utilizing Kyoto and Chicago Climate Exchange (CCX) criteria. VERs were credited to the 1998-2005 period. The credits can be sold at a market price in the web-based voluntary market. GRL expects strong growth in annual offsets in the future but because of the negative effect of new planting during the first 2-3 years there may be little ongoing sequestration. However, there will be strong growth in annual offsets thereafter. GRL will also generate additional carbon offsets from its existing plantations in Uganda.
Modification and expansion of the Sao Hill Industries Limited (SHI) sawmill will enable SHI to more fully utilize an existing government forest concession in Tanzania. This concession consists of mature pine and eucalyptus forests, which are currently licensed by the Department of Natural Resources to SHI with a sustainable harvest of 250,000 m³/year. The SHI sawmill is the largest in East Africa, producing utility poles and logs respectively from eucalyptus and pine trees. Renovation activities will include consolidation and expansion of pressure treatment for utility poles and sawn lumber as well as de-bottlenecking of existing operations. SHI expects that the sawmill, within three years, will procure directly from GRL’s own plantations at lower cost than from government plantations, and with a different mix of species available for sawn lumber production.
GRL’s proposed new CHP biomass-fired power plant at SHI will ensure much greater reliability of power supply both to the sawmill and to local consumers, who frequently have erratic electric supply. The biomass-fired CHP plant will utilize sawmill wood waste to generate electricity and steam. The steam will be used for thermal processes such as dry kilns and a portion of the electricity generated will be used to operate the sawmill. Excess electricity is to be sold to Tanzania Electric Supply Company (Tanesco) or to local industries nearby. The size of the biomass-fired CHP plant is still under review pending a fuel study and associated preliminary engineering.
Green Resources AS (GRAS) is a plantation, forest products; renewable energy and carbon offset company with an active focus on addressing the damage created by deforestation in the East Africa region. The Company, which was established in 1995, is a private, profit oriented Norwegian company with 60 shareholders. It employs 2000 people and has invested more than $35 million in its African operations. Green Resources has activities in Tanzania, Uganda and Mozambique.
GRAS is implementing an investment program over the next three years to expand and modernize its saw mill operations in Sao Hill, Tanzania, and establish additional plantations in Tanzania, Uganda and Mozambique. The program will include:
- achieving internationally recognized certifications including FSC, CDM and ISO 14001/9001;
- planting 9,000 ha of land with eucalyptus, pine, teak and indigenous trees;
- expanding its equipment for harvesting and wood transportation;
- modernizing an existing saw mill to increase efficiencies and capacity;
- retrofitting a small wood waste to energy plant at the mill, and installing a new wood waste-fired Combined Heating and Power (CHP) facility; and
- associated miscellaneous capital expenditures.
GRAS’s plantation and wood waste-to-energy projects will address the issues created by deforestation by:
- increasing the amount of trees planted every year, thereby functioning as a carbon sink,
- creating carbon offsets that will add to revenues,
- generating electricity from fuels produced by sustainably managed forests,
- providing a source of power poles for electric power distribution systems, and
- generating significant employment in rural areas for some of the poorest people in the countries where it operates.
Approximately one person is employed for every plantation hectare planted. In addition, the increase in available electricity will decrease the demand for firewood, and will improve the living conditions of surrounding communities.
Green Resources Limited (GRL) is the largest afforestation company in Africa. GRL expects to plant 5,000 ha in 2008 and to increase to more than 10,000 ha/year by 2011. GRL’s Tanzanian plantations have received 233,000 tons of Voluntary Emission Reductions (VERs), certified by SGS utilizing Kyoto and Chicago Climate Exchange (CCX) criteria. VERs were credited to the 1998-2005 period. The credits can be sold at a market price in the web-based voluntary market. GRL expects strong growth in annual offsets in the future but because of the negative effect of new planting during the first 2-3 years there may be little ongoing sequestration. However, there will be strong growth in annual offsets thereafter. GRL will also generate additional carbon offsets from its existing plantations in Uganda.
Modification and expansion of the Sao Hill Industries Limited (SHI) sawmill will enable SHI to more fully utilize an existing government forest concession in Tanzania. This concession consists of mature pine and eucalyptus forests, which are currently licensed by the Department of Natural Resources to SHI with a sustainable harvest of 250,000 m³/year. The SHI sawmill is the largest in East Africa, producing utility poles and logs respectively from eucalyptus and pine trees. Renovation activities will include consolidation and expansion of pressure treatment for utility poles and sawn lumber as well as de-bottlenecking of existing operations. SHI expects that the sawmill, within three years, will procure directly from GRL’s own plantations at lower cost than from government plantations, and with a different mix of species available for sawn lumber production.
GRL’s proposed new CHP biomass-fired power plant at SHI will ensure much greater reliability of power supply both to the sawmill and to local consumers, who frequently have erratic electric supply. The biomass-fired CHP plant will utilize sawmill wood waste to generate electricity and steam. The steam will be used for thermal processes such as dry kilns and a portion of the electricity generated will be used to operate the sawmill. Excess electricity is to be sold to Tanzania Electric Supply Company (Tanesco) or to local industries nearby. The size of the biomass-fired CHP plant is still under review pending a fuel study and associated preliminary engineering.
Overview of IFC's Scope of Review
IFC staff visited GRAS’s offices in Dar es Salaam, Tanzania, and met staff responsible for certification programs in the plantations; reviewed the GIS system being developed for data tracking, management and utilization of all plantations resources; conducted visits to sales yards where lumber products are marketed to the public; conducted a conference call with GRL’s senior compliance manager in the Netherlands; and met with local ministries including Department of Forestry and Beekeeping, the Designated National Authority (DNA) for CDM Projects within the Ministry of Environment, and the Tanzanian Electric Supply Company Limited (Tanesco). And, IFC staff conducted a physical inspection of GRL plantations in the southern Tanzanian highlands and the Sao Hill (SHI) sawmilling company situated in the vicinity of government pine and eucalyptus plantations in Tanzania’s southeastern highlands, and met with management staff for all field operations. The IFC team reviewed diverse company documentation including annual reports, business plans and the existing CHP audit and proposed reconstruction plan.
