By Patrick Omoake
Eight South American nations have pledged their support for Brazil’s proposed Tropical Forest Forever Facility (TFFF), a global fund aimed at channeling finance for rainforest conservation. The declaration was made at the Amazon Summit held in Bogotá, Colombia, where leaders from the Amazon Cooperation Treaty Organization (ACTO) member countries came together to discuss the future of the world’s largest rainforest.
The TFFF, proposed by Brazil in 2023, is a global investment fund that would allocate a share of its returns to rainforest conservation initiatives around the world. The fund is expected to be backed by an initial, one-time $25 billion contribution from donor nations, along with $100 billion in private funds.
According to the concept note, the fund will borrow money from investors at interest rates of around 5% and then invest in higher-yielding emerging market bonds paying around 8% interest. This would allow the fund to pay an estimated $4 per hectare to rainforest nations – an expected $2.8 billion in total disbursements per year.
The support for the TFFF from Amazon nations is a significant step towards a more sustainable future for the region. As Brazilian President Luiz Inácio Lula da Silva said, “We need this to be the most serious COP of all, one that doesn’t end in empty speeches and promises.” With the right approach, the TFFF could be a game-changer for rainforest conservation and a model for sustainable development in the Amazon region.
However, not everyone is convinced that the TFFF is a good idea. Researchers Max Alexander Matthey and Aidan Hollis have called the fund a “risky gamble” with taxpayer money, pointing to the potential for defaults and volatility in emerging market bonds. They argue that the strategy relies on market yields being structurally too high, which may not be the case.
One notable outcome of the Amazon Summit was the creation of a new advisory body, the Amazonian Indigenous Peoples Mechanism (MAPI), which will advise on issues like deforestation and species trafficking. Each country will be represented by a government and an Indigenous delegate, ensuring that the voices of Indigenous peoples are heard in decision-making processes.
The TFFF aims to channel finance for rainforest conservation and promote sustainable development in the Amazon region. The fund will be officially launched in Belém, as one of the main initiatives led by the Brazilian COP presidency. Countries in the BRICS bloc of emerging economies – among them, crucially, China – have pledged support for the new fund.
As the world looks to the upcoming COP30 climate talks in November, the support for the TFFF from Amazon nations sends a strong signal about the importance of protecting the world’s largest rainforest. With the right implementation, the TFFF could be a crucial step towards a more sustainable future for the Amazon region and beyond.
The Amazon Summit in Bogotá follows a meeting two years ago in the COP30 host city of Belém where ACTO leaders issued a declaration in support of Brazil’s COP30 presidency and laid the groundwork for co-operation around the world’s largest rainforest.
The declaration from Amazon nations also invites “potential investor countries” to “announce substantial contributions” intended to guarantee the fund’s quick activation. Those that have expressed interest so far include Britain, Norway, and the UAE.
The latest TFFF concept note rules out investments in polluting industries such as coal, oil, and gas, something that was praised by campaign group Global Witness. But the nonprofit called on governments to reinforce their participation in the fund with strong laws to stop banks and other financial actors more generally funneling trillions into businesses responsible for forest destruction policies.