Brazil has advanced its Tropical Forest Forever Facility (TFFF) initiative, a fund to preserve global tropical forests that will be launched at the UN Cop 30 summit, adding new governance and financing structures.
Under the updated plan, TFFF will act through two distinct entities: the Tropical Forest Investment Fund (TFIF), a legally independent investment vehicle, and TFFF itself, hosted initially by the World Bank.
The TFIF will blend sponsor capital — 20pc from sovereign and philanthropic sources and 80pc raised via bond issuance to institutional investors. Returns from this portfolio will fund annual payments to participating countries, starting at $4/ha of preserved forest. Payments are subject to an inflation adjustment, capped at 2pc/yr. It aims to raise $25bn in sponsor capital and an additional $100bn in senior market debt.
TFIF will "exclude investments that cause significant environmental impact", such as those in activities related coal, peat, oil and natural gas.
The updated plan also adds that funded countries must maintain deforestation rates below 0.5pc and will face steep payment discounts for forest loss or degradation. Each hectare (ha) deforested could reduce payments by up to 200ha worth of funding, depending on severity.
It also includes a canopy coverage threshold of 20–30pc within specific mapping for countries to apply to the fund. That threshold is subject to updated degradation and deforestation discount ratios.
It also highlights that TFFF will not generate or issue carbon or biodiversity credits, nor will it replace other existing forest finance initiatives such as REDD+. Instead, it is "designed to complement, not duplicate, existing programs".
Finally, the TFFF has reduced its repayment term to 30 years — adding a 10-year grace period — and will require that at least 20pc of payments be allocated to indigenous peoples and local communities.
Brazil plans to launch TFFF during Cop 30, which it will host in November in northern Para state. Deforestation is one of Brazil's flagship issues for the summit.
The TFFF working group expects to conclude the details of the fund's financial model by September. It then expects initial pledges from sponsor countries to begin after the World Bank board's meeting from 13-18 October.
The Amazon Cooperation Treaty Organization countries — Brazil, Bolivia, Colombia, Ecuador, Guyana, Peru, Suriname and Venezuela — will sign a joint declaration in favor of TFFF on Friday, Brazil's government said.
Brazil is working to eliminate deforestation — both legal and illegal — by 2030, to meet its emissions reductions targets under the Paris climate agreement.
