IMPACT REPORTING


As of September 30, 2017

Impact Overview
Percentage of TriLinc Borrowers that:
Comply with local environmental, labor, health, safety and business laws, standards and regulations 100%
Demonstrate their positive impact on the community through community service and/or community donations 76%
Commit to working towards implementing international environmental and health and safety best practices 100%
Implement environmentally sustainable practices, including energy savings, waste reduction and/or water conservation 85%
Top 5 Borrower Impact Objectives:
1 Job Creation
2 Wage Increase
3 Access to New Markets
4 Capacity-Building
5 Agricultural Productivity
Top 5 Environmental and Social Practices:
1 Waste Reduction
2 Energy Savings
3 Maternity / Paternity Leave
4 Fair Hiring and Recruiting
5 Fair Compensation
Case Study: Sustainable Timber Exporter - New Zealand1
Investment Type: Senior Secured Term Loan
Structure: Term Loan Due 2/10/2021
Loan Commitment Amount2: $10,800,000
Interest Rate3: 11.50%
Sector: Logging
Cash Flow Coverage Ratio4: ≥3.00x
Impact Objective(s): Environmental Conservation; Community Development; Capacity-Building

With a 2016 GDP of $185 billion and a population of 4.7 million,5 New Zealand boasts the top position on the World Bank’s Ease of Doing Business index.6 Between 2010 and 2016, the country’s annual GDP growth rate averaged approximately 2.6%,7 mainly driven by dairy and meat exports.8 Although a small player in the international forestry sector, contributing to only 1.1% of the world’s total supply of industrial wood and only 1.3% of the world’s trade in forest products, New Zealand’s forestry sector plays a significant role in the country’s economy, contributing approximately $5 billion of its annual gross income, 3% of its GDP, and directly employing roughly 20,000 people.9 In early 2015, based on the New Zealand Standard for Sustainable Forest Management, New Zealand became a member of the Program for the Endorsement of Forest Certification (“PEFC”) alliance, and later that year, received the PEFC endorsed certification, the most trusted forest certification label globally.10

Recognizing the importance of supporting sustainable forestry practices in the midst of a rapidly growing industry, TriLinc extended a $10,800,000 senior secured three year term loan facility to a New Zealand-based sustainable timber exporter. Established in 2004, the borrower sources responsibly harvested logs in-country to supply the Indian timber sector and operates a vertically integrated business model with different entities focusing on supporting plantation development, harvesting, and transportation. The company owns and manages approximately 10,000 acres of sustainable pine plantations in the Marlborough Sounds and Pouto Peninsula of New Zealand. TriLinc’s loan will finance the acquisition of stumpage rights to harvest timber from sustainably managed timber plantations that operate in accordance with the New Zealand Resource Management Act and Environmental Code of Practice for Plantation Forestry. The majority of harvest contractors and workers are sourced from the Maori tribes and local communities, and it is expected that the ongoing harvesting and management of these assets will generate substantial employment and commercial opportunities for the Maori. The harvest will be shipped to India, where the timber sector is growing rapidly due to an increase in construction activity, coupled with rising consumer demand, which is straining domestic supply.

Additionally, the borrower is engaged in the development of a timber park near Mundra Port in India, through which it will be an anchor supplier of logs, lumber, and other timber raw materials. This industrial park will enable global participants to establish a world-class timber sector value chain through manufacturing, logistics, and design operations, supported by scalable sources of raw materials from stable supply markets like New Zealand, USA and other regions.

Past performance is no guarantee of future results. The impact data above in the Impact Overview section reflects data collected as of September 30, 2017 and is subject to change/rounding. The borrower information presented in the Impact Investment Case Study represents an actual transaction in TriLinc Global Impact Fund as of September 30, 2017. All information provided by TriLinc Advisors, LLC.
1) There is no assurance that our investment in the borrower or this market will be successful or will have the desired impact. 2) The current loan commitment amount represents the current amount that is available to the borrower under the agreement. This amount may change over time. 3) Note, this is not a measure of TriLinc’s investment performance nor is it necessarily indicative of distributions that TriLinc may provide to investors. 4) The cash flow coverage ratio is the ratio of projected total cash available at the end of the current year to the annual in interest and principal payments due on outstanding debt. 5) World Bank, Database, New Zealand, 2016. 6) The World Bank, Doing Business, 2017. 7) World Bank, World Development Indicators Database, New Zealand, 2016. 8) The OEC, MIT, New Zealand, 2016. 9) Ministry of Primary Industries, New Zealand, 2017. 10) The Programme for the Endorsement of Forest Certification, New Zealand, 2017.