Imagine a timber investment bond that can help an African country resolve its growing fuel crisis, which can offset the global warming impact of your holiday flight, and which indirectly assists a fledgling eco-tourism scheme.

Moreover, the bond is likely to make a handsome profit that can either go into the buyer's pocket - or be reinvested by the aid agency that originally sold the £10 ($19.5) stake in a commercial forestry project in Uganda.

It may all sound too good to be true. But if an idea for such a bond, prompted by a recent tour of a Ugandan forestry project proves feasible, coupling the humanitarian drive of non-government organisations with the profit motive of the private sector could make for a unique development strategy.

The investment proposal took shape after a two-hour drive from Uganda's commercial capital of Kampala, through rolling green hills on to the estate of the British-owned New Forests Company (NFC) at Namwasa, the geographical heart of the country.

Now in its third year of operations, 1.3 million conifer and eucalyptus seedlings have been planted across 830ha (2,050 acres) of rich red soil. Watered by annual rain of 1,100 centimetres, encouraged by the African sun, growth is as rapid as anywhere in the world, reaching over 2.5 metres in six months.

A reforesting reversal

Julian Ozanne, managing director of New Forests, is a former Financial Times colleague who was once the paper's Nairobi-based Africa correspondent. After years on the frontline reporting Africa's losing battle for recovery, he left journalism and has taken up development, determined to show that it is possible to combine doing good with making money.

Over lunch in an indigenous forest clearing, under the shade of boughs over 200 years old, he sets out what he and his Ugandan partners have already achieved.

Around 500 casual workers are employed, supporting a core of a dozen salaried staff. At the labourers' daily rates of $3-$4 a day, wages are modest to say the least, though this rate gives them an annual income of twice the per-capita average of the country. And the company is considering ways to supplement it: notably by a cross between a profit-sharing scheme and share options that could deliver a face value worth $100 by year five. It is hardly a fortune - but if all goes well, the employees' stake will be worth substantially more.

A sound relationship with the local community is essential, says Ozanne, and the company has provided a bore-hole, a community centre, and floored classrooms at a local village school. The lunchtime conversation went well beyond local concerns, however. Was there a way in which someone who lived in Europe could take a stake, however modest, in this Ugandan project which was viable, profitable and conscious of its social responsibilities?

No one at the table supported the scheme backed by British-based charities, which invited supporters to donate £10, which would be used to buy a goat, which in turn would be donated to an African family. But it did trigger a suggestion: "What if a British charity such as Oxfam, could sell a £10 timber investment bond at its high-street shops?"

The more it was discussed, the more sense it made.

A Ugandan forestry official pointed out that Africa has been slow to respond to an ecological disaster in the making. Indigenous forests across the continent are being cut down and used for fuel, or exported as timber. In Uganda, the percentage of the indigenous forest has fallen by two-thirds, and systematic reforestation is vital. Moreover, the National Forestry Authority is currently under severe pressure to allow increased commercial cultivation of forests under its management, a move that has sparked bitter protest and resignations.

The plan also makes sense in business terms, as much as any investment does, notwithstanding the usual warning that any investment can fall as well as rise. But assuming current forecasts for timber prices are correct, the bond would double in value by the end of five years - and the company would only have to guarantee the face value.

More than a pipedream?

As we sat around the lunch table, questions came thick and fast:

• Why Oxfam? Indeed, why should any charity sell bonds that go to the private sector? Answer: because Oxfam has a network of high-street shops which are well placed to capture the passing trade. And in doing so, Oxfam can show that the private sector and NGOs can work together to assist Africa

• What is in it for the agency? Oxfam - or whoever sold the bond - would benefit in two ways: it would take a commission on the sales; and the return on the bond at maturity could be reinvested in development

• Would it involve much paperwork? In order to keep this to a minimum, the investment certificate would be issued as bearer bonds, tradable and negotiable

• How could the value of the bond be established? Their value would be linked to the price of timber, and the seedlings bought by the investment would be grown in a separate section of the project - thus de-linking the bonds from the rest of the company's operations.

• What is in it for the company? It gets what amounts to an interest-free loan for five years, at the end of which NFC is committed to honouring the face value of the bonds. But if the market value is higher than the face value, the company will not have to redeem them, but will take a share of the profit - at least to cover the cost of harvesting and marketing the timber.

Meanwhile the ensuing publicity that would accompany the issue would attract further commercial investors.

Finally, the scheme would need help from Gordon Brown. The British chancellor would need to authorise charities such as Oxfam to sell the bonds, and to waive capital-gains tax on profits, provided these were reinvested in development.

"Trees for Africa" bonds may yet prove to be a pipedream. But if they do ever get off the ground, for the first-time profit and compassion can be contained in a single ethical, environmentally-supportive investment that need cost no more than $20 a share.

Better, surely, than buying a goat!

Plans are underway to nearly double the planting at Namwasa to 1,500 hectares (ha) in 2007, and to begin operations at a second plantation in the second half of the year, with a planting target of 700ha, bringing the total 2,200ha with some 3.4m trees.

Despite this phenomenal growth, patience is essential to success. It will be five years at least before there will be any return on the company's $10m investment, and it will be at least double that time before the trees fully mature as a timber source.

But it is well worth the wait: when a ten-cent seedling, which will have cost some $20 in maintenance (in the shape of weeding and pruning) reaches maturity, it should fetch - at current prices - more than $50 a tree.

The project carries the potential for three kinds of benefit.

The first, clearly, is economic - but this goes beyond timber. Off-cuts, sawdust and waste wood from a planned ten-year $25 million investment in a sawn timber plant could help fuel a fifty-megawatt power station, and ease an electricity shortage which daily affects Kampala.

Second, there is a tourist potential to be tapped: areas of indigenous forest, within the area allocated the company on a fifty-year lease by Uganda's National Forestry Authority, will become the site of an ecotourism project, with over 120 species of birds to attract visitors from Europe.

Third, there is a further environmental benefit. The leading, Oxford-based carbon consultants EcoSecurities predict that New Forest's Namwasa plantation will sequestrate ("breathe in") as much as 795,000 tonnes of CO2e by 2012, and 6,240,000 by 2032, with about 60% generated by the pine and eucalyptus plantations and 40% by the company natural regeneration and protection of the existing indigenous forest.

The Uganda operation can make a direct and significant contribution to the reduction of carbon dioxide in the atmosphere, help combat global warming, and provide a valuable new revenue stream through the generation of tradable carbon credits, say NFC officials. If the impact of a holiday flight to say, Paris, could be offset by the planting of trees, the selling-pitch for the bond becomes even more appealing.

In this developmental and environmental focus, the project is complementary to existing community-based African initiatives like the valuable Tree Aid.