Komaza Forestry Ltd (FMO-63135)

Countries
  • Kenya
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • Netherlands Development Finance Company (FMO)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Approved
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
C
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
Nov 27, 2023
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Borrower
Komaza Forestry Limited
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Agriculture and Forestry
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 0.50 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Primary Source

Original disclosure @ FMO website

Updated in EWS Apr 13, 2024

Disclosed by Bank Feb 8, 2024

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

According to the Bank’s website, Komaza Forestry Limited ("KFL") is currently under administration as the company is in a bankruptcy scenario. Together with some shareholders of Komaza, FMO has structured a short-term bridge funding for KFL of USD 1.5m (USD 500k for FMO) to facilitate an orderly wind-down.

FMO facilitates the orderly wind-down of the company by providing the Administrator with bridge funding to liquidate the company. This bridge funding will have priority in repayment from the sale of the assets.

Back in 2020, FMO invested USD 7.5m in Komaza, which is a vertically integrated micro-forestry company working with smallholder farmers in Coastal and Central Kenya to address a large and fast-growing wood market in Africa. The funding objective at that time was to support the growth of Komaza within Kenya and potentially across Sub-Saharan Africa.

 

Early Warning System Project Analysis
For a project with severe or irreversible impacts to local community and natural resources, the Early Warning System Team may conduct a thorough analysis regarding its potential impacts to human and environmental rights.

This particular transaction has an E&S risk of category C. The investment has no significant negative environmental and social impacts; the funding will be used to facilitate an orderly wind-down and no forestry-related activities will be implemented in this phase of KFL.

Investment Description
Here you can find a list of individual development financial institutions that finance the project.

Together with some shareholders of Komaza, FMO has structured a short-term bridge funding for KFL of USD 1.5m (USD 500k for FMO).

Funding: LUF

Private Actors Description
A Private Actor is a non-governmental body or entity that is the borrower or client of a development project, which can include corporations, private equity and banks. This describes the private actors and their roles in relation to the project, when private actor information is disclosed or has been further researched.

Our customer is Komaza Forestry Limited ("KFL"), which is a company in Kenya that is 100% owned by Komaza Group Inc ("Komaza"). Komaza is a vertically integrated micro-forestry company working with smallholder farmers in Coastal and Central Kenya to address a large and fast-growing wood market in Africa.

Private Actor 1 Private Actor 1 Role Private Actor 1 Sector Relation Private Actor 2 Private Actor 2 Role Private Actor 2 Sector
- - - - Komaza Forestry Limited Client -

Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

No contacts available at the time of disclosure.

ACCESS TO INFORMATION

As part of FMO's ex-ante disclosure (disclosure of transactions before contracting), you can send requests or questions for additional information to: disclosure@fmo.nl

ACCOUNTABILITY MECHANISM OF FMO

Communities who believe they will be negatively affected by a project funded by the Dutch Development Bank (FMO) may be able to file a complaint with the Independent Complaints Mechanism, which is the joint independent accountability mechanism of the Dutch Development Bank (FMO) and the German Investment Corporation (KfW). A complaint can be filed in writing, by email, post, or online. The complaint can be filed in English or any other language of the complainant. The Independent Complaints Mechanism is comprised of a three-member Independent Expert Panel and it can provide either problem-solving, compliance review or both, in either order. Additional information about this accountability mechanism, including a guide and template for filing a complaint, can be found at: https://www.fmo.nl/independent-complaints-mechanism

How it works

How it works