Norwegian Government to provide NOK 30 billion to new fund to preserve tropical forests

'It is vital to stop deforestation to reduce the impacts of climate change and limit biodiversity loss. There is no time to lose if we are to save the world's tropical forests. The new Tropical Forest Forever Facility can provide stable, long-term funding to relevant countries. It is important for Norway to support this initiative,' said Prime Minister Jonas Gahr Støre.

On Thursday, Prime Minister Støre announced that Norway will provide up to NOK 30 billion in loans over ten years to the Tropical Forest Forever Facility (TFFF). The announcement was made ahead of this year's Climate Change Conference, which is being held in Belém in the Brazilian Amazon.

'Protecting tropical forests is an investment in our common future. This fund will help to protect vulnerable ecosystems that are needed to mitigate the global climate and nature crisis. We hope that more countries will also contribute funding,' said Minister of Climate and Environment Andreas Bjelland Eriksen.

Brazil and Indonesia have each already announced a contribution of USD 1 billion as well.

Conditions for the Norwegian loans

The Norwegian loans will be disbursed gradually in the period up to 2035 and must be repaid by 2075. Norway has stipulated a set of conditions before the funds can be disbursed, including:

• at least NOK 100 billion must have been secured from other donors by 2026;
• Norway is not to provide more than 20 % of the total amount;
• the funding model must be sustainable and maintain an acceptable level of risk.

The Storting (Norwegian parliament) will consider the allocation to the fund in connection with the debate on the national budget.

How the new fund works

The funding provided by Norway and other donors will be used to mobilise additional funding from private investors. The combined assets will be placed in a global fund that is to invest in a broad portfolio of securities. The excess returns on the investments after the investors have been paid will be distributed annually to countries with low deforestation rates to fund further forest conservation efforts. The TFFF aims to raise approximately NOK 1 250 billion in capital.

At least 20 % of the funds transferred must go to indigenous peoples and local communities. The TFFF will be open to all tropical forest countries. Brazil has spearheaded the initiative to establish the new fund and has sought contributions in the form of loans.

In the long term, the TFFF is intended to become self-sustaining and not require further contributions.

Norway's rainforest conservation efforts

Norway has been one of the largest donors of funding to rainforest conservation for more than 15 years. The announced contribution to the TFFF reflects Norway's ongoing commitment to these efforts. Brazil is one of the partner countries that has achieved great success in reducing deforestation. The contribution to the TFFF is the largest investment made under Norway's International Climate and Forest Initiative since it was launched in 2008.

Although Brazil, Indonesia and other countries Norway cooperates with have succeeded in significantly reducing deforestation, the level of global deforestation remains high. Extensive wildfires, exacerbated by higher temperatures and drought, are a key reason for this.