Explainer - Tropical Forest Forever Facility

• The Tropical Forest Forever Facility (TFFF) was officially launched at the COP30 Leader’s Summit in Belem during a high-level event with leaders of more than 30 countries.

• Hosted by Brazilian President Luiz Inacio Lula da Silva, the event featured the announcement of the TFFF Launch Declaration, which has already received endorsements from 53 countries, including 19 potential sovereign investors. 

• Conceived as a blended finance mechanism, the TFFF aims to mobilise $25 billion in sovereign capital to leverage up to $100 billion in private investment, in line with a broader strategic agenda to channel private capital toward international development objectives. 

• India welcomed the TFFF recognising it as a significant step towards collective and sustained global action for the preservation of tropical forests, and joined the initiative as an Observer.

Why TFFF?

• The rapid destruction of tropical forests around the world threatens commodity production, water and food security, biodiversity, and the livelihoods of millions and is pushing us closer to climate tipping points. 

• The impacts of this stretch far beyond the forests of Africa, Latin America, and Asia. In fact, what happens in the Congo Basin, the Amazon, the South Asian Rainforest, and other forests in the Global South affects everyone on the planet.

• Currently, most of the funding spent to reduce deforestation and degradation is channeled through traditional input-focused approaches. 

• This is inappropriate and inadequate, and given the inherent complexity of deforestation, it does not always provide sufficient flexibility to direct funding where it is needed most.

• The Tropical Forests Forever Facility (TFFF) was born out of the recognition that a major innovative incentive is needed to encourage tropical forest countries to continue protecting and conserving them at the right scale and speed.

Highlights of TFFF

• The TFFF design was led by Brazil in partnership with Democratic Republic of Congo, Ghana, Malaysia, Indonesia, Colombia, the UK, Germany, Norway, France, the UAE, and counted with the valuable contributions of Indigenous Peoples and local communities. 

• The TFFF launch in Belem highlights the urgent need for collective action to address climate change, protect biodiversity, and promote sustainable development in tropical forest countries, with a recognition of the critical stewardship of Indigenous Peoples and Local Communities.

• It was a significant milestone for the TFFF and marks the beginning of a new era of global collaboration between public and private investment, driving permanent conservation strategies and strengthening partnerships worldwide to safeguard the most critical tropical ecosystems.

• The TFFF is a historic paradigm shift in global efforts to protect and restore tropical forests, as the facility will address a market failure and recognize the value of, and pay for, the ecosystem services provided by tropical forests to the world. 

• The TFFF creates an unprecedented global financial incentive to protect standing tropical forests, rather than destroying them.

• TFFF has the potential to support the protection of over one billion hectares of tropical forests in over 70 developing countries. 

• Payments to countries will be based on satellite remote sensing data that tracks forest canopy cover annually in a low-cost and transparent manner. 

• The TFFF will be built by finance from traditional as well as non-traditional sovereign sponsor governments, philanthropy, family offices, and private sector investors.

• It has a potential to increase manyfold the budgets of the environment ministries in Tropical Forest Countries.

• Next steps include the establishment of the Tropical Forest Investment Fund (TFIF) in a national jurisdiction, paving the way for the beginning of the operations.