Tropical Forest Fund reaches $5.5 billion in investments

Three more countries have joined Brazil in investing in the Forever Tropical Forest Fund (TFFF). Norway, Indonesia, and France announced investments of $3 billion, $1 billion, and $500 million respectively in the new climate financing mechanism. With the $1 billion investment announced by the Brazilian government, the fund now totals $5.5 billion.

The investments were announced shortly after the official launch of the TFFF on Thursday afternoon (6) by President Luiz Inácio Lula da Silva at the Climate Summit in Belém. According to the Minister of Finance, Fernando Haddad, the new financial tool is innovative as it combines public and private resources in the form of investment, rather than donations.

“There is capital investment from investors who will be remunerated at a basic rate. These resources will be loaned and used to finance projects determined by its committee. The difference in interest rates, the spread between what is paid to the investor and what is charged from the borrower, will serve as a guarantee to finance the payment for these environmental services,” explained Haddad.

Minister Sonia Guajajara of Indigenous Peoples noted that 20% of the payment for these services to ensure the standing forest will be allocated to indigenous peoples and local communities. “Indigenous peoples have actively participated in the development of this mechanism,” she emphasized.

Minister of Environment and Climate Change Marina Silva celebrated the progress of the financial mechanism in such a short time. “I am very happy to see world leaders saying that this is the COP of implementation because this here [the TFFF] is implementation.

Ambassador Maurício Lyrio, Secretary of Climate, Energy, and Environment at the Ministry of Foreign Affairs, highlighted that with the already disclosed investments and Germany’s announcement expected on Friday (7), a total of 53 countries endorsed the support declaration for the TFFF presented by Brazil at the Climate Summit.

Among the countries endorsing the declaration are potential investors such as Germany, Armenia, Australia, Austria, Belgium, Canada, China, Denmark, United Arab Emirates, Finland, Ireland, Japan, Monaco, the Netherlands, Portugal, the United Kingdom, Sweden, and the European Union.