Company Announcements

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 website¹. 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 NDC² 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 Ordinance³, 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/ 

²  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,

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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. 

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