The investment will support the expansion of NFC’s plantation operations in Uganda and Tanzania and finance the development of new local timber-processing facilities.

The company said the additional capital will help increase its forest estate from 30,000 hectares to 100,000 hectares over time.

NFC operates commercial forestry plantations and manufactures products such as transmission poles, sawn timber and pallets for construction and infrastructure markets across East Africa.

The company was established in 2004 and has positioned itself as one of the region’s largest sustainable forestry businesses.

Impact Fund Denmark said the investment is aimed at strengthening local timber production at a time when East Africa still relies heavily on imported wood products.

According to the fund, expanding domestic processing capacity could help create employment opportunities, increase tax revenues and support industrial growth in the region.

The Danish development finance institution also noted that demand for timber is expected to continue rising as East African economies urbanize and invest in housing, energy and infrastructure projects.

Utility poles, construction materials and industrial wood products remain in high demand across the region.

NFC currently manages plantation forests in Uganda and Tanzania, including large areas certified under the Forest Stewardship Council (FSC) standards for responsible forestry management.

The company also maintains conservation areas to protect biodiversity and support carbon sequestration.

Development finance institutions and impact investors have increasingly shown interest in forestry projects across Africa, viewing the sector as both an economic opportunity and a climate-related investment.

Forestry projects are seen as important for reducing pressure on natural forests, supporting local manufacturing and capturing carbon emissions.

Impact Fund Denmark, formerly known as IFU, invests in businesses across developing markets with a focus on sustainable economic growth and climate-related projects.