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EKO tokens (or simply ‘EKO’) are Ekofolio’s flagship product that aims to make investing in forests easy, affordable and much more liquid before maturity. They are backed by a dynamic portfolio of forest assets globally, which will be acquired, planted, and managed on an on-going basis in developed and emerging timberland markets around the world. Local forest managers will be appointed to take care of the end-to-end process of managing the forests, including sustainable harvesting and the sale of timber.
Key features of the EKO:
- 10-year forest-backed loans, redeemable from Year 5 directly from Ekofolio
- Steady growth in value of 3% p.a., powered mainly by photosynthesis
- Backed up by a portfolio of quality forest assets in developed and emerging markets
- Forest assets managed by leading local forest managers in respective markets
- Clear pricing curve over time (3% p.a. over 10 years, 130% principal on maturity)
- Tradeable peer-to-peer in a secondary market before maturity (coming soon)
Our vision: A global, dynamic, diversified portfolio of the best forest assets in the world
We have a vision to grow toward a stable, diversified, and impactful portfolio of forests in the long run that is appropriate for the widest possible group of investors. But as they say, a journey of a thousand miles begins with a single step. In our initial steps, our focus is on the proven, stable and reliable. The first forests in our portfolio will predominantly be in the European Union, which ensures low risks, proximity to mature consumer markets, clear regulations, and an attractive return.
As the portfolio grows in size, economies of scale will allow diversification into higher yielding assets, including greenfield plantations in emerging markets. These plantations convert bare and degraded land into plantation forests of fast growing tree varieties, that have mature export markets and strong commercial value.
Initiating greenfield projects on degraded land is often the first step in the process of land restoration, and can quickly protect the exposed soil from further erosion, and help with water retention in the ground, while increasing biodiversity.
Brownfield projects in urban areas on the other hand can have a cooling effect and create green spaces that help to beautify barren, industrial landscapes and mitigate air pollution at source.
The best of both worlds
This gradual approach raises the overall return profile, increases potential for impact, whilst minimizing overall risks. It also ensures that there is a steady stream of income from the mature portfolio to finance the operating costs of greenfield and brownfield operations, which require significant ongoing operating investment and care.
Portfolio evolution roadmap
Phase 1: Stable growth: Developed market, standing forests within the EU
- Investment grade forests close to major consumer markets in the EU, ensuring strong demand for wood
- Such forest assets are typically low risk, cash yielding in early years, with liquid secondary markets for the forest assets themselves
- Geographical focus: Initial portfolio of mixed boreal standing forests in the Baltics, which offer superior risk-adjusted returns, and later a mix of standing forests, brownfield and greenfield projects in the rest of EU
- Trade predominantly in EUR
Phase 2: Emerging impact: Increasing allocation of emerging market greenfields
- Addition of greenfield and brownfield plantations in Central and Latin America, which typically have a higher return expectation over 15 years, but also higher perceived venture and currency risks
- Addition of trading in USD
- Conversion into regulated offering, supervised by Tier 1 financial regulator
Phase 3: Future: Diversified and impact focused (coming soon)
EKO value over time
|Forest type||Semi-natural mixed boreal forest|
|Forest tree species||Aspen, Pine, Birch, White Alder|
|Price per ha (incl standing wood value)||€2,500 - €3,500|
|Projected annual timber growth||2.5 - 3.5 m³ / ha|
|Projected average annual timber income||€75 - €95 per ha/yr|
|Projected annual return expectations (includes land price appreciation)||3-6% IRR (nominal)|
|End products||Construction wood, biomass pellets, wood chips, furniture, paper, pallets|
|Expected rotation age||20–40 years|
|Risks||On average less than 0.1% of trees have to be felled due to damage by wind, water, fire, diseases and animal damage.|
|Certifications||FSC® certified forests.|