Brazil’s Lula announces $1 billion investment in global forest fund

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By Lisandra Paraguassu

BRASILIA (Reuters) -Brazil’s President Luiz Inacio Lula da Silva announced on Tuesday a $1 billion investment in the Tropical Forests Forever Facility, a multilateral funding mechanism it has proposed to support conservation of endangered forests, at a United Nations event in New York.

The announcement, which confirmed an earlier report by Reuters, makes Brazil the first country to commit a contribution to the forest fund, which may be the Brazilian government’s main deliverable at the U.N. climate summit known as COP30 that it will host in the Amazonian city of Belem in November.

“Brazil will lead by example,” Lula said. “I invite all partners present to put forward equally ambitious contributions so that the TFFF can become operational at COP30.”

Sources had told Reuters that the announcement was designed to unlock more contributions from both wealthy and developing economies, which have been at odds about funding global climate policy.

That ambition seemed to resonate with several officials attending the meeting. Razan Khalifa Al Mubarak, Special Envoy for Nature of the United Arab Emirates, said Brazil’s efforts put developing countries as leaders in the climate finance debate.

“Led by Brazil and embraced across the tropics, the TFFF marks a turning point,” she said, adding that the fund was “an innovative global south-led initiative.”

Several country representatives also indicated that they could follow Brazil’s lead and support the fund.

“I applaud you for being the first country to make a pledge today,” said Andreas Bjelland Eriksen, Norway’s Minister for Climate and the Environment. “We need to quickly expand the number of sponsor countries in order for the TFFF to achieve its full potential.”

The TFFF has also received initial signs of support from nations such as China, the UK, France, Germany, Singapore and the United Arab Emirates, according to people involved in the negotiations.

Policymakers envision the TFFF as a $125 billion fund combining sovereign and private-sector contributions that would be managed like an endowment, paying countries annual stipends based on how much of their tropical forests remain standing.

To achieve that lofty target, Brazil needs governments and major philanthropies to contribute the first $25 billion, which could then attract another $100 billion from private investors, under preliminary estimates.

(Reporting by Lisandra Paraguassu in BrasiliaWriting by Manuela AndreoniEditing by Brad Haynes, Nia Williams, Chizu Nomiyama and Aurora Ellis)