Growth in nature finance is fueled by blended finance, using public capital to align risk-return for private investors in nature-positive opportunities. The TFFF, launched at COP, exemplifies this trend, positioning forests as ecological assets and attractive investments.
At COP30 in Belém, nations announced a record-breaking level of financial commitments to tropical forest restoration. A key standout initiative, the Tropical Forests Forever Facility (TFFF), launched as a flagship solution to reverse deforestation by increasing the value of standing forests, raised $6.6 billion during the summit. Whilst far short of the $25 billion initial target, if the fund raises $10 billion by the end of Brazil’s COP Presidency in 2026, this could leverage up to $40 billion in additional private investment, creating a total of $50 billion to pay tropical forest nations $4 per hectare of forests conserved annually.
Beyond the Amazon, countries reaffirmed their commitment to other critical forest regions. The Belém Call for the Forests of the Congo Basin has seen $2.5 billion committed by Germany, Belgium, Norway, the UK, the European Commission, the African Development Bank and the World Bank over a five-year period to strengthen forest monitoring, community tenure rights, and technical capacity across the region.
Overall, these outcomes from COP30 reflect a broader surge in nature finance. In 2024, finance for nature increased by 11 times to $102 billion from $9.4 billion in 2020, with green bonds, biodiversity credits and debt-for-nature swaps playing a key role in this expansion. Another major driver of this growth is blended finance, where concessional capital and guarantees are being increasingly deployed by public sources to align risk-return expectations for private investors looking at nature-positive opportunities. Facilities like the TFFF exemplify this trend, positioning forests as not only ecological assets but also attractive return-generating investment opportunities for all types of investors. By leveraging capital markets and sustainable bonds, instruments like this aim to unlock large-scale private finance while ensuring benefits for indigenous peoples and local communities – a critical dimension highlighted at COP30.
As a leading DFI in the forestry space, FMO remains firmly committed to addressing the climate crisis through strategic investments that protect and restore forests. With a goal to grow their sustainable forestry portfolio to $1 billion by 2030, FMO champions sustainable forest management and conservation and deforestation and conversion free agrobusiness as transformative climate strategies. A part of this commitment is realized through the Mobilising Finance for Forests (MFF) programme, a $300 million blended finance initiative launched by the UK government and managed by FMO. The Dutch government also joined the program in 2024, with an financial contribution of $33.5 million. MFF uses concessional capital to increase investment into funds strategies and business models which protect and restore tropical forests.
The programme is structured around the three core components of an investment facility, a development contribution facility, and a technical assistance facility, which together serve to improve the risk-return profile of investments, and overcome systemic barriers that are slowing investment from the private sector into forest-positive models. MFF has a flexible and responsive structure that can support projects across different stages of maturity. It can deploy concessional debt or equity depending on the project’s needs, while also offering advisory support to strengthen project viability and impact. MFF can also provide smaller, risk-tolerant development contributions to high-potential projects, helping to bridge the acute early-stage financing gap faced by many nature-based solutions models in particular.
To date, MFF has deployed approximately $109 million over nine investments, showcasing its ability to support diverse and innovative forest and sustainable land use projects, while laying the groundwork for scalable, long-term climate and biodiversity impact.
In order to encourage the scaling and future replication of ambitious blended finance models for accelerating investment in nature, “Mobilising Finance for Forests: a Blueprint for Tropical Forest Protection and Restoration” has recently been released by the MFF’s Learning, Convening and Influencing Platform (LCIP). As well as a clear explanation of the fund’s investment model and operational structure, the blueprint synthesizes lessons learned from programme management, technical assistance delivery, and capital deployment so far, and is a clear example of the scaling potential of blended finance for nature.
Fundamentally, the blueprint is intended to provide a reference point for other donors interested in designing and implementing similar catalytic finance programs, or scaling existing initiatives, and demonstrates how blended finance can be implemented effectively to deliver on climate and biodiversity goals and support inclusive development.
If you would be interested in scaling or replicating all or parts of the MFF model, then please do get in touch.
The MFF Program is delivered by FMO and funded by the government of the United Kingdom and the government of the Netherlands.