INTERVIEW: TFFF is expected to begin remunerating forest countries in 2028 - Capital Reset

Belém – The capitalization of the Tropical Forest Forever Facility (TFFF) started within the Brazilian government’s expectations, despite a different mix of initial investor countries than anticipated, says Joao Paulo Resende, Subsecretary for Economic and Fiscal Affairs at the Ministry of Finance and the official responsible for the fund.

“Since Brazil announced its US$1 billion contribution, the game has changed. I haven’t stopped receiving messages from countries and investors wanting to understand the TFFF,” he says in an interview with Reset, where he discussed the expectation of new contributions and when the fund should go to the market to raise capital from investors and begin paying for the conservation of tropical forests.

The US$5.5 billion in investment commitments from countries to the TFFF, in the first week of COP, was within what you expected, or was there a higher expectation of fundraising at that time?

It was within what we expected, for different reasons. The amount presented by Norway was a very positive surprise. We did not expect it to reach that value. On the other hand, we expected an announcement from Germany, and we know it will come, because the Prime Minister was quite forceful in the statement he made, but he did not announce a figure. One thing compensated for the other. This was the [total] figure we imagined would happen, but not necessarily with the countries that contributed.

And with which other countries are conversations heating up? There has been talk of China; I also heard something about Japan. Who are you talking to right now?

It is important to keep in mind that there were six countries we had been talking to for more than a year and a half. Those that made announcements now are in this group: Norway, France, and Germany. But there is another group of countries we started talking to more recently. It is natural that they will take longer to understand what it is and process it internally. Is harder to understand because it is a project that touches on the environment, finance, foreign relations, and often, the office of the presidency or the prime minister itself. That is why we did not expect any announcements, at this moment, from countries that were not part of this initial group. Indonesia, for example, was a great surprise, but it was already in the initial group too.

Now, China was not, Japan was not, Canada was not, Australia was not, many other European countries were not, most of the Gulf countries were not. These countries, as Minister [Fernando] Haddad said, need time to digest, and we believe they will come soon, at the beginning of next year, but we have the whole year to work with, because that is how long Brazil’s COP presidency lasts. We are quite optimistic.

There are countries where we feel we are more advanced, and there are countries we will start talking to now. The Netherlands, for example, was a country that did not make an announcement now; it was not part of the initial group of countries but provided significant resources to cover the structural costs at the World Bank that will start running the TFFF. We raised US$30 million in total for this, including the Netherlands. Why would I give money to set up the fund if I am not going to invest? So, it is a very strong signal from the Netherlands, despite not having made an announcement. We also think Japan is a strong candidate because it has a very close relationship with Brazil. The largest Japanese community outside of Japan is in Brazil. They are always participating in this type of initiative.