Nonetheless, as the fund approaches its first anniversary, the mood among its backers appears to be celebratory. At a TFFF event attended by ministers, UN officials and Indigenous representatives during this month\u2019s UN biodiversity conference (COP17) in Armenia, the gathering of approximately 200 cheered the re-election of Brazil’s president, Luiz In\u00e1cio Lula da Silva. They felt his victory had removed the immediate political threat to the Amazon rainforest posed by his hard-right opponent, Flavio Bolsonaro. It also signalled continuity for the TFFF, they argued.<\/p>\n\n\n\n
The fund has targeted USD 10 billion by the end of the year \u2013 and Norway\u2019s USD 3 billion pledge is contingent on<\/a> that target being achieved.<\/p>\n\n\n\n The TFFF has already set up its governance: an interim charter<\/a> and board and the World Bank<\/a> as trustee and host. It is expected to become operational in 2027, but the first payments are not anticipated before 2028<\/a>.<\/p>\n\n\n\n Meanwhile, some of the rules that will determine how the TFFF works are still being negotiated. That includes how forest degradation will be monitored and penalised, what the fund can invest in and how Indigenous communities will receive their share.<\/p>\n\n\n\n \u201cIt was launched without being bulletproof,\u201d Mauricio Voivodic, executive director of the environmental NGO WWF-Brazil, told Dialogue Earth. \u201cWe need to recognise the vulnerabilities and things that can be improved by making adjustments as we go. If not, we risk losing many years. TFFF has a real potential to change the game.\u201d<\/p>\n\n\n\n Tropical forests are vital for biodiversity and the water cycle. The Amazon basin, the Congo basin and Borneo alone hold about 78%<\/a> of the world\u2019s remaining tropical forests. Yet they are facing a financial shortfall. By 2030, the tropical forest countries will need a total USD 67 billion a year in investment, according to<\/a> the UN Environment Programme: USD 33 billion for reforestation, USD 18 billion for agroforestry and USD 16 billion for conservation.<\/p>\n\n\n\n Agroforestry<\/p> Agroforestry incorporates trees into agricultural systems, and can help to improve soil health<\/p><\/div><\/div>\n\n\n\n The TFFF was set up to address that gap. Unlike conventional conservation funding, which largely relies on grants, it aims to generate income from financial markets over many years.<\/p>\n\n\n\n \u201cIt\u2019s designed to work side by side with other mechanisms,\u201d Torbj\u00f8rn Gjefsen, a climate policy adviser at Rainforest Foundation Norway, told Dialogue Earth. \u201cIt will pay countries for standing forest, which is a new thing and something that is sorely missing in the forest finance landscape.\u201d<\/p>\n\n\n\n Governments and philanthropic groups would provide USD 25 billion in long-term loans, repaid over decades. Private investors would add USD 100 billion by buying bonds issued by the fund, which pay a fixed return.<\/p>\n\n\n\n The whole USD 125 billion would be invested in other fixed-income assets, such as emerging-market government and corporate bonds. If those investments earn more than the fund owes in interest, the surplus is paid each year to countries with tropical forests. That surplus is anticipated to be worth billions of dollars.<\/p>\n\n\n\n But countries are paid only if returns stay above the fund\u2019s own costs. And any shortfall in paying those costs would be covered by using the money loaned from governments.<\/p>\n\n\n\n Under the scheme, eligible tropical forest countries would receive up to USD 4<\/a> a year for every hectare of standing forest (measured by satellite), of which at least 20% must go to Indigenous peoples and local communities. Inversely, payments would be cut in conjunction with rises in deforestation and forest degradation.<\/p>\n\n\n\n The facility will operate through two linked entities. The Tropical Forest Investment Fund (TFIF), based in Luxembourg, will manage the investments. The TFFF will oversee reporting and distribute payments. For now, the World Bank is hosting its secretariat.<\/p>\n\n\n\n The countries that have so far pledged money<\/a> are Brazil, Indonesia, Norway, Germany, France, Luxembourg, the United Kingdom and the Netherlands. More countries could follow in the coming weeks. During the TFFF\u2019s COP17 event, the fund\u2019s co-chairs expressed confidence in reaching USD 10 billion by the end of this year. Sources tell Dialogue Earth that South Korea, Canada and Japan could be next.<\/p>\n\n\n\n Anita de Horde, executive director of the Finance for Biodiversity Foundation, expects private investors to engage once the structure is fully in place. A group of 34 financial institutions and organisations, including Allianz Global Investors and Deutsche Bank, signed<\/a> a statement of support this year \u2013 although these are not commitments to invest.<\/p>\n\n\n\n \u201cWhat makes it unique is that it combines scale and impact with a financial return. Institutional investors manage money on behalf of clients, pension holders and asset owners, so they need a return. That\u2019s why it has been so well received,\u201d De Horde told Dialogue Earth at COP17.<\/p>\n\n\n\n Despite the simple concept, whether the scheme works will depend on rules that are still being ironed out.<\/p>\n\n\n\n Under the design, the annual payment of USD 4 per hectare of standing forest functions alongside a penalty deduction for each hectare of forest that is lost. This deduction cancels out the payment for 100 hectares of standing forest \u2013 in other words, a USD 400 per hectare penalty. \u201cNo one will stop deforestation for getting four dollars, but others will because of the penalty deduction,\u201d Felix Finkbeiner, founder of the NGO Plant-for-the-Planet, told Dialogue Earth at COP17. \u201cThe incentive is the money they are not<\/em> getting.\u201d The penalty doubles for losses above a 0.3% annual deforestation rate. This mechanism can only reduce what a country receives, not leave it owing money.<\/p>\n\n\n\n Voivodic acknowledged the payment cannot compete with profits from cattle ranching or soy. But he also said that the total amount a country could receive would still be \u201csomething they can\u2019t ignore\u201d.<\/p>\n\n\n\n WWF has made calculations and prepared fact sheets to show tropical countries what they could receive. Suriname, for example, could get an estimated USD 42-46 million a year if the fund hits the full USD 125 billion. That compares with about USD 2 million a year that it currently receives in bilateral aid for biodiversity. \u201cOnce countries start receiving it, there will be so much pressure to avoid and decrease deforestation,\u201d Voivodic said.<\/p>\n\n\n\n With so much money at stake, the way forest loss is measured will be vital. As currently designed, the fund only penalises<\/a> fire-based degradation. \u201cFire-based degradation is easier to monitor than other forms,\u201d Finkbeiner explained, adding that it is only behind about a third of all forest loss. Ignoring the other causes \u201cis a bad incentive for countries\u201d.<\/p>\n\n\n\n Voivodic agrees, but said there is no global methodology reliable enough to use right away. Waiting for one would cost years.<\/p>\n\n\n\n Getting things right now will be important, as most future board decisions will require a two-thirds majority<\/a>. Donors and rainforest countries will hold equal seats. Changing the method for measuring deforestation in the future would create winners and losers, Finkbeiner said: \u201cYou can get a majority in most cases, but it will be tricky.\u201d<\/p>\n\n\n\n Plant-for-the-Planet has therefore suggested that the scientific advisory panel be able to propose new measurement methods. The board could veto them but would not have to approve them, allowing a method to become employed without needing a vote in its favour. The current charter covers only the preparation phase and is due to be updated before the fund takes effect, which is when such a change could be written in.<\/p>\n\n\n\n The fund\u2019s investment criteria are also still being worked out. Finkbeiner said the broad principles<\/a> are set: no money should be invested in activities that lead to deforestation or the extraction of fossil fuels. \u201cBut the details matter a lot,\u201d he adds.<\/p>\n\n\n\n De Horde said investors are pushing for safeguards that go beyond deforestation. They want social and environmental checks to apply to the whole company the fund buys bonds from, not just to the project the money pays for: \u201cThey are united with the NGO world.\u201d<\/p>\n\n\n\n Valentina Figuera Mart\u00ednez, who coordinates the Global Forest Coalition\u2019s gender justice and forests campaign, is not reassured. It is not clear that extractive companies would be kept out of the portfolio, she told Dialogue Earth: \u201cAt the same time you are financing a miner in the Congo, you are paying four dollars per hectare of standing forest. That is contradictory. It is not sustainable.\u201d<\/p>\n\n\n\n The 20% for Indigenous peoples and local communities is among the fund\u2019s most welcomed features. The fund has outlined two routes<\/a>: national accounts overseen by community committees, or, where countries agree, payments through a global agency.<\/p>\n\n\n\n Finkbeiner said the fund\u2019s respect for national sovereignty makes sense but oversight would still be necessary: \u201cWe don\u2019t want governments to use TFFF money to pick their favourite communities and exclude others.\u201d<\/p>\n\n\n\n Indigenous organisations, including the Global Alliance of Territorial Communities, helped design<\/a> the fund but, as Figuera Mart\u00ednez points out, their role is only advisory. Communities are meant to have a say over how their share is spent but their representatives hold no voting rights<\/a> on the board. Speaking at London Climate Action Week in September, Brazil\u2019s vice minister of Indigenous peoples, Marcos Kaingang, said<\/a> consultations were underway on governance, and on criteria for spending the payments.<\/p>\n\n\n\n Political differences will inevitably continue to build obstacles to the TFFF’s work as the years pass by. President Lula\u2019s re-election in Brazil has eased much of that worry for now, although in Voivodic\u2019s view, the fund is built for exactly the kind of government that is not on board: \u201cIf we have a government against the environment, it\u2019s even more important to have TFFF. We need a strong, robust financial mechanism to hold deforestation down even if there is no political willingness.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" Meant to pay countries for keeping forests standing, the fund has an interim charter, a board, a World Bank home \u2026 and insufficient funds<\/p>\n","protected":false},"author":50000563,"featured_media":60157545,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_has_post_settings":[],"footnotes":""},"categories":[50039902],"tags":[523,531,544,50040324],"hashtags":[],"country":[50041540,50000021],"class_list":["post-60157524","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-forests","tag-conservation","tag-deforestation","tag-finance","tag-rainforests","country-armenia","country-brazil"],"acf":[],"yoast_head":"\nWe need to recognise the vulnerabilities and things that can be improved by making adjustments as we go. If not, we risk losing many years<\/blockquote>Mauricio Voivodic, executive director, WWF-Brazil<\/cite><\/div><\/div>\n\n\n\n
A fund taking shape<\/h2>\n\n\n\n
The challenges ahead<\/h2>\n\n\n\n
![\"crowd](\"https:\/\/dialogue.earth\/content\/uploads\/2026\/10\/COP17-TFFF-side-event_CBD-COP17-Yerevan-Armenia_Flickr_55615145328-scaled.jpg\")
<\/div>Indigenous empowerment<\/h2>\n\n\n\n