Not a 'single hectare of Irish land' will be sold to UK investment fund

Agriculture Minister Charlie McConalogue said: 'Gresham House has absolutely nothing to do with the purchase or management of land.' Picture: Garret Chaney/Collins Photos

The UK-based investment fund at the heart of the Coillte forestation controversy will "not buy one single hectare of Irish land”, Agriculture Minister Charlie McConalogue has said.

The Government said that Coillte is using UK fund Gresham House to manage the development of forests as it is banned by EU laws from drawing down premium payments since 2003.

In a briefing note compiled by Agriculture Minister Charlie McConalogue’s department, it is stated that the Irish Strategic Investment Fund is providing the finance to create new forests which will be managed by Coillte.

Gresham House will be managing the finances of the specially created venture the Irish Strategic Forestry Fund (ISFF), on behalf of Coillte.

The fund will also take on existing forests, which will result in those existing forests benefitting from Coillte’s timber certifications. Between new and existing forests, ISFF will have somewhere in the region of 12,000ha in this fund.

The forests themselves will be managed by Coillte, Mr McConalogue has said and, under existing Central Bank rules, an independent third party must manage the fund.

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He said that after a competitive and independent process, Gresham House’s Irish office was chosen to manage the fund.

“Gresham House has absolutely nothing to do with the purchase or management of land. This will all be done by Coillte.

“Gresham House is solely managing the finances of the ISFF — something which is a legal requirement.

“Gresham House is already operating in this space,” the note says.

Ireland’s new €1.3bn National Forestry Programme, subject to State aid approval, is the country’s largest-ever forestry programme.

Farmers will also receive single farm payment on afforested land; other landowners will not receive this payment on afforested land, the note states.

While it is Government policy for Coillte to engage in afforestation, Coillte has not been in a position to draw down annual premium payments from the State since a 2003 EU state aid decision. 

“In essence, this means Coillte cannot buy lands themselves for planting,” the note says.

Mr McConalogue and Junior Minister Pippa Hackett met with Coillte on Thursday, January 19 and requested Coillte to update them further on the range of possible models to deliver on its targets for new forest creation between now and 2050.

In a bid to downplay the controversy, the Department states that the total area of new forests planted through the fund will deliver just 3.5% of the 100,000 hectares of new forests Coillte has committed to enabling between now and 2050.

Of the State’s overall national target of 450,000 hectares of new forests by 2050, the fund will plant less than 1% of that total.

The project between Coillte, ISFF, and Gresham House is for an initial five-year period.