United Kingdom to Invest US$ 540 Million in Brazil's Tropical Forest Fund

The United Kingdom announced on Thursday that it will invest 400 million pounds sterling, approximately US$ 540 million, in the Tropical Forests Forever Fund (TFFF). This contribution will be made as a loan and is contingent upon the finalization of the fund's governance and operational mechanisms, as well as the British government's participation in decision making structures, according to the Department for Energy Security.

This investment brings the total amount committed to the TFFF to US$ 7.3 billion. The fund must reach US$ 10 billion by the end of the year to maintain a US$ 3 billion investment from Norway. Launched by the Brazilian government during COP30 in Belém last November, the TFFF is designed to remunerate both donors and countries that protect tropical forests. The UK government stated that this approach marks a shift toward acting as an investor rather than a donor, as the loan will be reimbursed while supporting climate and nature actions.

The UK's contribution is lower than those of other European nations. Germany has confirmed 1 billion euros, and France has approved 500 million euros. The overall goal for the TFFF is to raise US$ 125 billion, consisting of US$ 25 billion in public resources and US$ 100 billion from various sources, including private investors.

The fund intends to invest its capital in a diversified fixed income portfolio with expected annual returns of 7% to 8%. Approximately 4% of these returns will go to financiers, and another 4% will go to countries that preserve forests. The fund will pay US$ 4 per conserved hectare, though payments will be reduced in cases of deforestation or fire degradation. Up to 74 developing countries, including Brazil, are eligible for these rewards, provided that at least 20% of each nation's returns are allocated to indigenous peoples and local communities.