"Brazil launches fund tying forest cash to steep deforestation penalties", 07 November 2025

...Brazil officially launched a new financial market fund, called the Tropical Forests Forever Facility, or TFFF, at a Nov. 6 event ahead of the COP30 climate summit it will host in Belém.

Countries with significant amounts of tropical forest cover can receive up to $4 per hectare ($1.62 per acre) of standing forest per year under the fund’s rules. But with penalties of up to $800 per hectare ($324 per acre) of deforestation, payments shrink fast, meaning even small increases in deforestation can amount to hundreds of millions lost...

Tropical forest countries must allocate 20% of payments to Indigenous and local communities, but it’s up to governments to decide how; it may not even be in the form of direct cash payments.

Every hectare of forest cleared can have a big impact on how much a country gets paid. If deforestation rates are low (less than 0.3%), each hectare deforested faces a discount of $400, or the equivalent of 100 hectares if the price per hectare falls below $4. For higher deforestation rates (0.3-0.5%), each hectare cleared is discounted at the value of 200 hectares. Forests degraded by fire are counted as 35 hectares lost...

According to the TFFF’s latest concept note, investor repayments and interest payments are top priority; remaining profits will go toward forest payments. If there isn’t enough left over to meet the $4 target, the per-hectare payment is reduced...

Groups such as the World Rainforest Movement have criticized this feature of the fund, saying it prioritizes investors over Indigenous communities and other forest stewards. Also, financing that relies on emerging market bonds depends on high borrowing costs for developing nations to be feasible.

The fund’s architects aim to secure $25 billion in seed money from countries attending COP30...