Many promising forest and nature opportunities never reach investors because they lack the funding needed to get investment-ready. MFF's Development Contribution Facility helps bridge this gap by financing the critical early-stage work that enables future investment.
If we want to mobilize billions into forests and nature, we need a pipeline of investable opportunities. Yet, many promising businesses, projects and funds struggle to access the early-stage capital needed to prove concepts, test markets, strengthen business models and prepare for investment. Consider a new nature-focused fund with a compelling investment thesis and a strong pipeline of potential deals: Before it can reach first close level, it still needs legal structuring, market validation, investor engagement and months of fundraising.
Traditional investors are often unwilling to fund this stage, yet without it the fund may never launch. This "missing middle" remains one of the biggest barriers to scaling investment in the sector - and is precisely the challenge that MFF's Development Contribution Facility was designed to address.
Mobilising Finance for Forests’ (MFF) Development Contribution Facility addresses this issue. As part of MFF's wider blended finance architecture, the DCF provides flexible, repayable or convertible development contributions that support the early-stage work required before larger-scale investment can take place. DCF support is linked to pre-agreed milestones or success events, helping maintain investment discipline while recognizing the uncertainty inherent in early-stage development. Examples of these milestones include the first close of a fund, positive cash flow, or a scale-up of investment. Ticket sizes typically range from USD $1 million to $3 million.
The DCF serves as both a pipeline-building and market-creation tool. It not only funds early stage development work, but also aims to help generate the evidence, confidence and capital needed to channel more capital into nascent forest and nature markets. Examples of support include pilot-stage testing, business model strengthening, pre-investment evidence generation, fund formation and first close readiness work (legal and tax structuring, impact strategy development, and investor materials). By supporting these activities, the DCF helps reduce uncertainty, improve transaction readiness, derisk investment, and create a stronger pipeline for other DFI’s, commercial investors and specialist fund managers.
An example of this is MFF’s work with Levasflor, where DCF support helped fund forest inventories, concession due diligence, environmental and social assessments, carbon feasibility work, market studies, product testing, financial modeling, and investor outreach. It also supported testing for higher-value wood products, including veneer and thermally treated wood, alongside laboratory testing to understand product quality and durability. This work ultimately helped turn a high-level growth plan into a more detailed investment proposition.
MFF’s Learning, Convening, and Influencing Platform have recently released a new paper on the DCF, as well as key lessons and case studies from the growing portfolio. For more information, read it here.
The Mobilising Finance for Forests (MFF) program is funded by the UK government and the government of the Kingdom of the Netherlands. MFF was established in 2021 by the UK government and FMO as a blended finance investment program to combat deforestation and other environmentally unsustainable land use practices contributing to global climate change. The Netherlands’ Ministry of Foreign Affairs joined MFF as a second funder in 2024. To explore MFF’s wider fund structure, click here.