Tropical rainforest conservation fund is at risk after UK bails out

A new global rainforest fund, launched by Brazil at COP30, it may struggle to meet its initial funding target this year, after the UK failed to declare expected pledge during London Climate Action Week and other sponsors late to enter.

The Tropical Forest Forever Facility (TFFF) was launched on the sidelines of last November’s UN climate conference as a new way to fund rainforest protection. Instead of relying on government grants, it wants to raise public and private funds, invest them in financial markets, and pay a portion of the profits to rainforest countries.

The facility has so far raised $6.8 billion but needs to raise at least $10 billion by the end of 2026, under the conditions set by Norway to open its offer. If the fund falls short of this goal, Norway’s contribution of up to $3 billion in loans over 10 years will not be released.

At a meeting of ministers of countries rich in rainforests in Kew Botanic Gardens in London last Tuesday in the heat of the moment, UK climate minister Katie White praised the TFFF and said she had “a strong conversation in government over the last few weeks” about the importance of forests and climate action.

A new global rainforest fund, launched by Brazil at COP30, it may struggle to meet its initial funding target this year, after the UK failed to declare expected pledge during London Climate Action Week and other sponsors late to enter.

The Tropical Forest Forever Facility (TFFF) was launched on the sidelines of last November’s UN climate conference as a new way to fund rainforest protection. Instead of relying on government grants, it wants to raise public and private funds, invest them in financial markets, and pay a portion of the profits to rainforest countries.

The facility has so far raised $6.8 billion but needs to raise at least $10 billion by the end of 2026, under the conditions set by Norway to open its offer. If the fund falls short of this goal, Norway’s contribution of up to $3 billion in loans over 10 years will not be released.

At a meeting of ministers of countries rich in rainforests in Kew Botanic Gardens in London last Tuesday in the heat of the moment, UK climate minister Katie White praised the TFFF and said she had “a strong conversation in government over the last few weeks” about the importance of forests and climate action.

He was in denial, he said, “this is not a nice thing to have – this is very important to our security and prosperity”. He told a small crowd of visiting ministers, officials and forest campaigners at Kew that the TFFF was an “innovative and impactful development”.

But despite the hopes of climate campaigners, the British minister did not follow Norway, Germany, France, Brazil, Indonesia and Luxembourg in pledging the fund, which aims to use capital returns from bond markets to financially reward countries that keep their tropical forests standing.

Ed Davey, the UK head of the World Resources Institute who was in the room for White’s speech, told Climate Home News afterwards that as the UK played a role in developing the idea and the British public’s concern for rainforests, it is “very important” that the government invests in the TFFF “as soon as possible”.

“The TFFF is in a very important stage of its conception, and if a few other important governments do not step in soon, there is a risk that the idea will lose its momentum,” he said.

Anders Haug Larsen, director of advocacy for the Rainforest Foundation Norway, was also disappointed by the lack of a British pledge during London Climate Action Week (LCAW).

The UK government’s funding and its ability to mobilize private sector investment is critical to TFFF’s success, adding that “saving rainforests is a key factor in tackling climate change and sustaining life on this planet”.

Political divide?

Britain’s The Times newspaper later reported that White’s boss – energy and climate minister Ed Miliband – was ready to announce a £400-million ($528m) investment pledge to the TFFF but was overruled by UK finance minister Rachel Reeves.

According to The Times, Reeves was worried about the announcement not being popular, as the government was criticized by the former minister of defense for not spending enough money on the military, and he forced the announcement to be suspended.

Climate Home News understands, however, that the UK Treasury has given the climate minister permission to tell Brazil and Norway that they will invest in the TFFF, but the necessary administrative procedures to make the guarantee were not completed in time to announce the contribution during the LCAW.

The UK has been slashing its foreign aid spending, including on climate projects, to deliver what its foreign secretary called “the biggest increase in defense spending since the Cold War”.

Affected projects include rainforest protection schemes such as the Congo Forestry Programme, which has had its budget cut by almost 80%..

Despite these measures to reduce foreign aid, Defense Secretary John Healey resigned a few weeks ago, demanding more spending on his department.

Last Monday, the first day of LCAW, British Prime Minister Keir Starmer announced that he will soon resign following the bad results of the local elections, and his Labor MP Andy Burnham is likely to take his place at the end of July. It looks like Reeves will be removed from his position as finance minister, and Miliband is reported to be the frontrunner to replace him.

Norwegian test available

If the UK does not contribute money to the TFFF by the end of the year, and other government sponsors, the program’s chances of reversing the destruction of tropical forests will diminish, experts say.

With the US under Donald Trump unlikely to pledge and the two biggest European Union countries France and Germany already doing so, forest campaigners were hoping the UK could meet the nearly £3.2 billion in new pledges needed to meet Norway’s minimum target.

Asked by Climate Home News whether France would increase its $0.6 billion pledge, its international relations minister Eleonore Caroit said last week, “I don’t have specific information about any increase.” He added that France supports the TFFF but also “focuses on other similar projects to achieve similar results”.

The Brazilian Ministry of Finance has requested investment in this fund from Japan, South Korea and China. Last Friday, Brazil’s finance minister Dario Durigan met with China’s finance minister Lan Fo’an and afterwards he told Valor Econômico that he has indicated the possibility of investing in TFFF.

“I think today, for the first time, China has given a strong, strong indication that it understands the TFFF model and is comfortable with it,” Durigan was quoted as saying. “There was a positive sign,” he added. “Now we will work with his team to turn that into tangible commitments.”

Larsen of the Rainforest Foundation in Norway said that there is hope that countries in the Middle East, many countries in Europe and the European Union can contribute. The UAE has expressed interest in the fund, and has provided technical assistance for its development.

Following a recent investor retreat in Rotterdam attended by government officials and private investors, a group of 12 financial institutions – including UK-based Ashmore Group and Dutch firm Robeco – endorsed the fund as “an opportunity to support the protection of up to a billion hectares of tropical forests”.

They added that the fund’s seed money from governments is “building momentum” and that the TFFF has put in place “strong institutional governance” that will deliver long-term results.

The economic value of standing forests

Details of how the TFFF will operate are being finalized in an effort to encourage investment.

Earlier this month, it was announced that its investment arm (Tropical Forest Investment Fund – TFIF) will be based in Luxembourg. The European financial institution said it would provide 50 million euros ($57 million) to the TFIF through the Climate and Energy Fund between 2026 and 2030, after which it would “maintain a long-term annual contribution”.

The Norwegian government commissioned a veteran of its sovereign wealth fund, Knut N. Kjaer, to review the TFFF’s funding mechanism.

At Kew Gardens last week, Brazil’s forest service chief Garo Batmanian said TFFF and other measures are needed to make standing forests economically valuable and therefore protected.

“No crazy person uses a chainsaw to cut down trees for fun,” he said. “He’s cutting down trees because he thinks he can get more money by using the land to get something else, so it’s not only stopping deforestation but also promoting the value of the standing forest.”