A new fund to protect the world’s rainforests, championed by Brazil, received a $3-billion boost from Norway at a COP30 leaders’ summit, but remains far off its goal of winning $25 billion in startup capital from donor governments.
The Tropical Forest Forever Facility (TFFF), launched today at a high-level event on the sidelines of the COP30 Belém Climate Summit, has gathered support from rainforest countries, which Brazilian officials said is crucial for its success, but has fallen short of hopes for early contributions to get it up and running.
The largest investment announced at the fund’s launch came from Norway, which pledged 30 billion krone ($3 billion) to the TFFF in the form of loans over 10 years, providing certain conditions are met.
Smaller pledges were also announced by Colombia ($250 million), Netherlands ($5 million for the TFFF’s secretariat) and Portugal ($1 million). The UK, one of the TFFF’s initial supporters that has been involved in its design, said it would not provide taxpayers’ money for the initiative.
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Brazil was the first country to pledge $1 billion to the fund, followed by Indonesia which announced it would match Brazil’s initial contribution. In October, the World Bank confirmed it will serve as interim host and trustee for the fund, which the bank’s CEO Ajay Banga said would allow beneficiary countries and donors to “focus on delivery”.
“The new Tropical Forest Forever Facility can provide stable, long-term funding to relevant countries. It is important for Norway to support this initiative,” said Norwegian prime minister Jonas Gahr Støre.
Unlike other investors, Norway has set out a series of conditions for its loans, adding pressure for the TFFF to find more financial backers. For example, the country requires that “at least NOK 100 billion ($9.8 billion) must have been secured from other donors by 2026”, adding that “Norway is not to provide more than 20% of the (fund’s) total amount”.
It also said the TFFF’s funding model “must be sustainable and maintain an acceptable level of risk”. Some critics say the fund’s strategy of investing in emerging market bonds would be too risky and would fail to deliver the expected results.
Toerris Jaeger, director of Rainforest Foundation Norway, celebrated the Scandinavian country’s announcement and said the pledge “is a substantial commitment to the rainforest and for our planet to remain habitable”.
Germany will announce its commitment to the TFFF when its chancellor speaks at the summit on Friday.
“Unprecedented” initiative
Speaking at the fund’s launch on Thursday, Brazil’s President Luiz Inácio Lula da Silva described it as “an unprecedented initiative”, adding that “for the first time, Global South countries will have protagonism in the forest agenda”.
The president said current climate funds “do not live up to the challenge posed by climate change”, which had motivated Brazil to assemble a group of countries and design an alternative. The UN estimates that forest protection is severely underfunded, with an annual gap of $216 billion.
“The TFFF is not based on donations. Its role will be to complement the mechanisms that pay for the reduction of greenhouse gas emissions,” Lula told a roundtable of world leaders that included UK Prime Minister Keir Starmer and Colombia’s President Gustavo Petro.
“The TFFF will be one of the main concrete results in the spirit of implementation of COP30,” he added, although the fund is not an instrument that has been set up under the UN climate talks.
The launch of the fund is a “hugely important step”, according to UN climate chief Simon Stiell, noting that the TFFF aims to make standing forests more valuable than cleared land. “It creates long-term, predictable support for the countries and communities who protect them,” he said. According to the fund’s design, 20% of all payments must be allocated to Indigenous people and local communities.
“Progress is happening, but it has to move faster and benefit more nations. That means closing the finance gap, strengthening monitoring and restoration, and ensuring support reaches Indigenous peoples and local communities,” Stiell said in a statement. “If we succeed, we can make forests stand forever, as pillars of climate stability and human prosperity.”
What is the TFFF?
The TFFF is designed to become a blended finance instrument that will invest in financial markets and pay a share of the returns to tropical countries that are protecting their rainforests.
The fund’s concept note proposes startup capital of $125 billion – $25bn coming from governments and $100bn from private investors like pension funds and asset managers. In theory this would allow the fund to pay forest countries about $4 per hectare per year, disbursing a total of $2.8 billion for rainforests every year.
As the TFFF is not a negotiated outcome at COP30, donors to the fund are not subject to the same responsibilities that govern the UN climate negotiations where the onus falls on developed countries. Experts say this could help bring on board wealthier developing countries like China and the Gulf states, which would otherwise shy away from assuming donor-country responsibilities.
TFFF payments are designed to be directed at tropical countries that can show results in reducing deforestation. Of the 74 eligible countries, only about 20 would meet the TFFF criteria if it was active today, according to online tracking platform TFFF Watch.
Torbjørn Gjefsen, international forest finance advisor at the Rainforest Foundation Norway, told Climate Home that “results-based payments” from the TFFF will be an innovative way to protect large, intact primary forests, which currently struggle to access other forms of forest finance.
Mirela Sandrini, interim executive director of WRI Brasil, said broad backing for the new fund from almost 50 countries “marks an important start… reflecting growing recognition of the need for collective action to protect and restore tropical forests”.
“However, the pool of those that have actually committed funding so far remains limited. Broader support will be essential if the facility is to become fully operational,” she added.
This story was updated after publication to include comments by UNFCCC executive secretary Simon Stiell.
The post Norway pledges $3bn in boost for Brazil-led tropical forest fund appeared first on Climate Home News.
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