Less than three weeks before COP30, Brazil sees “strong indications” that several countries will commit sovereign funds to its new Tropical Forests Forever Fund (TFFF), according to a source in the economic team. The brainchild of President Luiz Inácio Lula da Silva, who announced the TFFF at the UN last month, the fund could provide up to $125 billion to protect tropical forests.
And whilst officials are increasingly confident pledges may come during the Heads of State Summit, some countries, however, are expected to confirm their investments only after COP30, as they still need to finalise budget approvals in their respective parliaments. New contributions could therefore be announced at any time until the end of 2026, the year when Brazil’s presidency of COP30 concludes, according to the source. Despite this, the fund’s formal launch timeline is proceeding as initially scheduled.
So far, only Brazil has confirmed participation, pledging $1 billion. Advanced talks are underway with Colombia, Ghana, Congo, Indonesia, Malaysia, Norway, Germany, the UK, France, the US, and the UAE. Recent discussions have also involved the EU, Canada, Australia, New Zealand, Japan, and Singapore.
On Tuesday (21), the World Bank announced it will administer the TFFF. “The bank will also provide secretariat and treasury services and support the issuance of securities to ensure the TFFF’s success,” said Marcos Vinicius Chilliatto, the World Bank’s executive director for Brazil. “This is a significant show of support from the bank’s board,” he added.
Brazilian officials expect strong interest from the financial sector in bonds issued under the TFFF framework, describing them as safe assets with a “very high-grade” rating. In addition, the fund’s structure is expected to include criteria to penalise or exclude countries that invest in polluting energy sources such as oil and coal or engage in deforestation.
The TFFF aims to raise $125 billion in low-interest financing, with 20% from sovereign funds, to support tropical forest conservation. Returns would be distributed to forest countries for conservation projects. Private investors, including pension funds, insurers, and asset managers, will provide the remaining 80%. Investors will receive $4 per hectare over a 40-year period.
Brazil first introduced the TFFF concept at COP28 in Dubai. Since then, the government, through the Finance and Environment ministries, has been working to make the initiative financially viable, moving from the conceptual stage to financial structuring. “[The TFFF] is like a supercharged Amazon Fund—50 times larger, global in scope, and free from political interference,” said João Paulo de Resende, deputy secretary for economic and fiscal affairs at the Finance Ministry.
- To learn more about the TFFF and how it will function, click here for Wood Central’s special feature.
