Germany to contribute €1 billion to Brazil's rainforest fund

Germany will contribute €1 billion ($1.15 billion) over 10 years to Brazil's new rainforest fund, Brazilian Environment Minister Marina Silva announced on Wednesday at the UN Climate Change Conference in Belém.

Berlin has pledged to support Brazilian President Luiz Inácio Lula da Silva's Tropical Forest Forever Facility (TFFF), which aims to reward countries financially for preserving their rainforests in an effort to combat deforestation.

Conversely, countries will face penalties for every hectare of forest destroyed, monitored through satellite imagery.

"This is about protecting the tropical rainforests, the lungs of our planet," German Environment Minister Carsten Schneider and Development Minister Reem Alabali Radovan said.

Fund aims to raise $125 billion

According to Brazil's estimates, the fund, with a target volume of $125 billion, could distribute around $4 billion annually after an initial start-up period, nearly three times the current volume of international forest financial aid.

Rainforests are considered vital "green lungs of the Earth" because they absorb large amounts of climate-damaging greenhouse gases, cool the atmosphere through water evaporation and host vast biodiversity. They are under pressure from deforestation to make way for agriculture, pasture land or gold mining.

Norway has already pledged $3 billion to the fund over 10 years, while Brazil and Indonesia are set to add $1 billion each.

Founding members of the initiative include Brazil, Colombia, Ghana, the Democratic Republic of Congo, Indonesia and Malaysia.

The fund will be overseen by an 18-member executive board, evenly split between tropical forest countries and investor countries, with the World Bank initially serving as trustee.

Some 70 developing countries could benefit

Around 70 developing nations could benefit, with recipients free to decide how the funds are used. A key requirement, however, is that 20% be specifically allocated to Indigenous peoples and traditional communities.

At its official launch in early November, the initiative was already supported by 53 countries, including 19 potential state investors, according to Brazil.

Brazil hopes wealthy nations will contribute an initial $25 billion, with a further $100 billion to be mobilized from the private sector in the coming years.

Investments linked to fossil fuels are excluded under the fund's rules.