This September, the Mobilising Finance for Forests’ Learning, Convening, and Influencing Platform spoke to Jenya Shandina, Blended Finance Portfolio Manager, about the evolution of the MFF programme over five years and how strategic blended finance is unlocking private capital for forest protection and sustainable land use.
Over the past five years, the Mobilising Finance for Forests (MFF) program has grown from a bold idea into a proven model for channeling private capital into Forestry and Sustainable Land Use (FSLU). We’re showing that blended finance can work—and is working—in this space. By structuring concessional capital strategically, we’ve been able to unlock significant private sector investment.
A major milestone has been the deployment of $100 million across nine investments in Latin America, Africa, and Asia. These include funds like the &Green Fund, the Responsible Commodities Facility (RCF), EcoEnterprises IV, and The BTG Pactual Reforestation Strategy, along with several smaller direct investments. Each combines commercial investment structures with measurable climate and biodiversity outcomes.
Another key moment came in 2024, when we welcomed the Netherlands’ Ministry of Foreign Affairs as a new funding partner. At the same time, the UK Government pledged additional support for MFF at COP29 in Baku. These commitments not only allow us to grow the portfolio and crowd in more private capital, but also signal strong confidence in the MFF model.
With public budgets under pressure and the need for nature-based solutions more urgent than ever, mechanisms like MFF—which use public funds to mobilize multiples in private finance—are becoming essential to meeting global climate and biodiversity goals.
Absolutely. One of the most compelling examples is our $40 million commitment to the BTG Pactual Reforestation Strategy in 2024. This is a Latin America-focused private equity forestry strategy, targeting marginal pasturelands for the purpose of protecting and restoring natural forests on 50% of its holdings, and planting sustainable commercial tree farms on the remaining 50% of its holdings. It’s an ambitious model that seeks attractive risk-adjusted returns via a combination of commercial timber revenues from FSC-certified plantations, and the sale of carbon credits from both the commercial plantations and areas that are restored beyond legal requirements. Their goal is to restore approximately 133,000 hectares of natural forest and establish sustainable commercial tree farms on an additional 133,000 hectares in order to protect and enhance biodiversity and expand economic opportunities in rural communities.
What made this investment catalytic was our role as an early investor and provider of first-loss capital. By taking on more risk in the structure, MFF was able to help the BTG Pactual Reforestation Strategy make strong progress towards their 1bn total fundraising goal – they raised 500 mln already by November 2024 and are still going! That’s a clear demonstration of how concessional finance can help unlock large-scale investment in the FSLU space.
We’re actively exploring investment models that generate revenue through carbon credits, biodiversity credits, and payments for ecosystem services. As a program with a mandate to restore and protect tropical forests, we are encouraged to see so many investable models developing that are aiming to protect standing forests and restore thousands of hectares of degraded land with native tropical forests and vegetation. The impact could be huge! Carbon and biodiversity finance offers a way to pay for this protection and restoration work that, unfortunately, has few other scalable revenue streams.
However, we are also approaching this space with care. The voluntary carbon market, in particular, has faced questions around integrity and long-term viability. To address this, FMO and MFF have developed a set of Carbon Credit Integrity Principles, grounded in the latest best practices. All investees must commit to following these principles, which aim to ensure that:
We published a white paper on our approach to carbon markets in 2023, which outlines our thinking in more detail.
By applying this rigorous lens, we believe MFF and FMO can help shape a high-integrity carbon finance ecosystem—one that builds trust, attracts capital, and channels much-needed funding to the countries safeguarding the world’s tropical forests.
Blended finance is at the core of MFF’s strategy. The Forestry and Sustainable Land Use (FSLU) sector holds enormous potential for both impact and investment—but it also comes with challenges that often deter commercial investors: long timelines, uncertain cash flows, and environmental and social risks.
That’s where MFF steps in. We fill critical financing gaps by acting as an anchor investor and provider of first-loss capital. By taking on more risk, we help improve the risk-return profile of investments, making them more attractive to private investors. This approach has proven effective in unlocking capital for projects that would otherwise fall outside the scope of traditional investment mandates—opening up new markets, diversifying portfolios, and delivering measurable climate and biodiversity outcomes.
MFF is part of FMO’s broader blended finance platform, which manages over $1.6 billion across multiple programs. We follow the Blended Finance Principles, including the principle of “minimum concessionality”—using only as much concessional funding as needed to make a deal viable. It’s more art than science, and we’re constantly learning and refining our approach.
Importantly, we’re committed to sharing those learnings. Knowledge exchange and ecosystem development are central to MFF’s mission—because scaling impact in this space requires collaboration, transparency, and continuous improvement.
The Learning, Convening and Influencing Platform (LCIP) is a core pillar of the MFF program. While MFF mobilizes capital through blended finance, LCIP works to strengthen the enabling environment for Forestry and Sustainable Land Use (FSLU) investments. It tackles the systemic barriers that often prevent capital from flowing into nature-based solutions—by generating practical knowledge, convening key stakeholders, and promoting alignment across development finance institutions, investors, and market actors.
A standout example of LCIP’s work is the ESG Guide for Forestry Investments. This Guide provides investors with a robust framework for integrating environmental, social, and governance (ESG) considerations throughout the investment lifecycle. It addresses the unique risks and complexities of forestry projects, helping investors make more informed, context-specific decisions. As ESG becomes increasingly central to capital allocation, tools like this are critical to scaling high-integrity investment in forests and nature. The Guide has been downloaded over 1500 times, and is published in Spanish to increase accessibility in Spain and Latin America.
Beyond publications, LCIP connects our investees with technical experts, peer investors, and potential customers—building the networks and knowledge needed to scale and succeed. This ecosystem-building role ensures that MFF’s financial interventions are not only catalytic, but also sustainable. In many ways, LCIP transforms MFF from a funding mechanism into a platform for systemic change—accelerating the flow of capital into high-impact, high-integrity FSLU models.
We’re seeing a growing wave of fund managers and entrepreneurs stepping up with bold, scalable solutions that combine investable models with real environmental and social impact. That’s encouraging. But the sector is still maturing, and one of the biggest challenges remains building a stronger pipeline of bankable opportunities—especially in early-stage ventures and in geographies where project development takes more time.
To help address this, MFF has been deploying a tool called the Repayable Development Contribution—a repayable grant, structured like a zero-interest loan. If a project reaches financial close or other agreed milestones, the funding is repaid. This mechanism helps promising ventures move closer to bankability while preserving concessional capital for future use.
We’ve learned that there’s more demand for this type of flexible, risk-tolerant capital than we initially expected. As a result, we’re scaling up its use and sharing our insights through the LCIP to help others in the ecosystem learn from our experience.
Another key lesson is the importance of strategically matching FSLU investments with the right types of investors. Not every project fits every investor profile. We’re now taking a more targeted approach, looking closely at how different subsectors, project types, and asset classes generate returns and impact over time. This helps us align opportunities with investor expectations, whether they’re focused on stable cash flows, biodiversity outcomes, or long-term climate impact.
Ultimately, these lessons are helping us build confidence in the sector and unlock capital where it’s needed most.
The MFF Program is delivered by FMO and funded by the government of the United Kingdom and the government of the Netherlands.