As all eyes fall on COP30 this November, the urgency of bridging the forest finance gap is undeniable. Governments, investors, and corporations must move beyond previous pledges made and implement key changes that will unlock the capital needed to protect and restore the world’s forests, recognizing them as a cornerstone of climate and biodiversity action.
At present, investment opportunities in the wider climate and nature-based space are expanding fast, partially driven by blended finance mechanisms that can help de-risk and scale sustainable development. In 2024, finance for nature increased by 11 times to $102 billion from $9.4 billion in 2020, with blended finance playing a key role in this expansion. Concessional capital and guarantees are being increasingly deployed by public sources to align risk-return expectations for private investors, and up-and-coming blended finance facilities focused specifically on forestry, such as the Tropical Forest Forever Facility, are hoping to attract large-scale private investment. This reflects a growing recognition worldwide that forests are not just ecological assets, but attractive revenue-generating investment opportunities for all types of investors.
The MFF Model
As a leading DFI in the forestry space, FMO remains firmly committed to addressing the climate crisis through strategic investment that protects and restores forests. With a goal to grow their sustainable forestry portfolio to $1 billion by 2030, FMO champions sustainable agribusiness, forest management and conservation 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 joined the program in 2024, with a financial contribution of $33.5 million.
The programme is structured around the three core components of an investment facility, a development contribution facility, and a technical assistance facility, which serve to improve the risk-return profile of investments, and overcome systemic barriers that are preventing investment from the private sector. To aid with scaling, 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.
To date, MFF has deployed approximately $109 million over nine investments, showcasing its ability to support diverse and innovative forest and land use projects, while laying the groundwork for scalable, long-term climate and biodiversity impact.
A blueprint for scaling blended finance in tropical forests
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.
Fundamentally, the blueprint is intended to provides a reference point for other donors interested in designing and implementing similar catalytic finance programs (or scale existing initiatives), and demonstrates how blended finance can be implemented effectively to deliver climate and biodiversity benefits and support inclusive development.
The MFF Program is delivered by FMO and funded by the government of the United Kingdom and the government of the Netherlands.