Over the coming ten years, Germany will be providing a total of one billion euros* for the Tropical Forests Forever Facility (TFFF) that was initiated by Brazil. This was announced by Development Minister Reem Alabali Radovan and Environment Minister Carsten Schneider in Brazil at the 30th Conference of the Parties (COP30) to the UN Framework Convention on Climate Change. At the beginning of COP30, Chancellor Merz had already announced that Germany would make a significant contribution. The funding will come from Germany's federal budget. They will help capitalise the fund, which is a particularly valuable contribution, as it enables the TFFF to borrow more private resources in the capital market and facilitate more payments to tropical forest countries.
Development Minister Alabali Radovan commented, "Rainforests are the lungs of our planet. And climate change knows no borders. That is why we are joining forces with international partners to support the development of this innovative financing initiative, which involves a high level of private sector engagement. Its purpose is to provide long-term financial incentives for developing countries and emerging economies to protect their tropical forests. What this means in concrete terms is support for Indigenous and local communities and protecting the world's approximately one billion hectares of tropical forests, which store 360 gigatonnes of carbon dioxide – an absolutely vital factor for the global climate and for the conservation of global biodiversity, which are in turn vital, not least, for prosperity in Germany and Europe."
Environment Minister Carsten Schneider said, "Humanity would be badly off without everything tropical forests do for us. That is why I am so grateful for President Lula's wonderful initiative to protect tropical forests worldwide. I am confident that this is a good investment. We are using the market to protect forests. It is especially important that 20 per cent of the initiative's funding goes directly to the indigenous people living in and from the forest: in areas where indigenous people live, the forest is doing well. The goal is for people to be able to live from the forest and not from cutting it down."
Under the initiative, public donors are to provide a total of 25 billion US dollars (junior tranche) so as to mobilise another 100 billion US dollars from private investors (senior tranche). The resulting total of 125 billion dollars is to be invested in the capital market via the Tropical Forest Investment Fund (TFIF) in a sustainable and profit-oriented manner. The returns generated are to be used for annual payments to tropical forest countries based on area and satellite data.
The World Bank is going to host the TFFF Secretariat for an initial period of three years. Germany and other partners are providing start-up funding for this amounting to 30 million US dollars in total. The further development of the financing model will be based on close consultation with international partners. Key concerns of the German government have already been incorporated (such as an ambition mechanism that will review and, if necessary, tighten access and disbursement criteria after three years).
Twenty per cent of the disbursements are to benefit Indigenous and local communities directly. They play a particularly important role for forest conservation.
One key goal of the initiative is to mobilise a broad donor base that includes non-traditional donors. At COP30, Brazil (under President Lula) and Indonesia have renewed their pledges of one billion US dollars each. Norway and France will contribute as well.
* This commitment is still subject to approval by the German Parliament.