(Businesshala) – BlueSource, a private US company that advises companies on emissions cuts, said on Tuesday it has partnered with an investment firm to buy timber forests to help curb climate change. $500 million joint venture.
The joint venture with Oak Hill Advisors, called Bluesource Sustainable Forest Company, aims to buy and more sustainably manage more than one million acres of forests in North America.
Bluesource president Roger Williams said Oak Hill, which has more than $50 billion in assets, will finance the vast majority of the venture and Bluesource will finance the rest.
Williams said the venture will allow his company to move from developing projects that generate carbon credits to becoming an asset manager of forest land.
“There are less profound social and climate benefits associated with deforestation and there are markets that exist today that reward long-term management behavior,” Williams said.
The aim of the joint venture is to purchase timber forests or co-invest with traditional forest managers to develop carbon credits verified by independent organizations.
Bluesource said it would generate carbon credits by cutting down fewer trees than traditional lumbering operations and would take other steps to allow the forest to grow stronger and absorb more carbon dioxide.
It said it would sell credits representing emissions reductions to companies, such as natural gas producers, in mandatory carbon markets such as California, and voluntary carbon markets, where companies seek to reduce emissions to net zero.
Bluesource, which manages about 80 forest projects from Alaska to South Carolina, did not say where the joint venture aims to purchase or co-manage the forests located. Williams said they would have mixed hardwood forests such as oak, maple, and poplar, rather than the monoculture pine stands in the Southeast of the United States.
Guggenheim Securities LLC acted as BlueSource’s financial advisor and placement agent on the venture.