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Developing the International Financing Facility for Forests (IFFFor)

Program Summary

The International Financing Facility for Forests (IFFFor) is a proposed mechanism designed to fill an incentive gap in the effort to combat deforestation. The IFFFor is a long-term investment fund, which will offer financial incentives to forest countries to preserve and restore the world’s most valuable forests. This would contribute to combatting climate change, preserving biodiversity, and enhancing economic development of forest countries.

Conceived by the World Bank Treasury and developed by the Center for Global Development (CGD), the IFFFor is currently being co-financed by PROFOR and the Rockefeller Foundation. Currently, this activity aims to develop IFFFor and explore its feasibility by building support across internal and external stakeholders and developing the investment case for different types of target investors.


Despite intensifying global conservation efforts, deforestation continues at unsustainable rates. In addition, investments to protect forests have been insufficient due to the following:

  • Limited foreign assistance for promoting the development benefits of forests;

  • Compensation for forests’ public goods is primarily focused on carbon – and even those programs are underfunded compared to the value of the services that forests provide;

  • Progress in “greening” trade and investment in forest-risk commodities has been slow;

  • Domestic subsidies and international investments in “grey” agricultural practices that drive deforestation far outweigh “green” investments that help maintain forests.


IFFFor aims to offer countries a large, highly-visible reward for successfully tackling deforestation. Specifically, IFFFor proposes to raise significant non-ODA investments and manage that capital in an endowment-like fund. Shares of the portfolio’s gains would then be allocated to forest countries, conditional on their success in reducing and reversing forest loss.

The team is developing IFFFor in a three-phased approach:

  1. analysis of design feasibility and review of the concept;
  2. detailed modeling analysis and external consultations; and
  3. fundraising and launch of the facility.


This activity has concluded with the following key outputs:

A suite of communications products that will continue to be adapted and refined for specific audiences and purposes going forward.

Outreach Plan: The team mapped out key stakeholder groups and sequenced the approach phases to build awareness and seek feedback to improve design and materials. The strategy includes the identification of key global events to showcase IFFFor and seek broader support.

Target stakeholders who have been identified, consulted, or acted as partners include World Bank departments, co-conveners, sovereign investors, environmental nongovernmental organizations (NGOs) with influential forest mandates, and forest country beneficiaries of the fund.

Advanced analytical work:

  • Financial options assessment: The World Bank Treasury modeled financial scenarios of portfolio composition, performance and timeline
  • ESG investing assessment: The World Bank Treasury modeled fund performance based on the application of investing rules to screen for environmental impact (e.g., fossil fuel free fund).
  • Performance assessment and rewards allocation options: The IFFFor team created technical scenarios for forest country selection and scenarios for rewards allocation that offer sufficient incentive to counter deforestation pressures.
  • Climate finance narrative: The IFFFor team clarified how IFFFor will complement or align with existing climate finance mechanisms, including the global REDD+ process. 
  • Budget accounting research: Analysis commenced on the budget accounting and financial reporting implications of investing in IFFFor for EU member countries, the United States, and Japan.

Next Steps:

In 2020, the project will complete its internal review and begin external outreach to target investor countries, forest countries, and key CSO stakeholders/partners. This second outreach effort will culminate in a final design and public announcement.

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Last Updated : 06-20-2020