The UK has announced its intention to invest £400 million into the Tropical Forests Forever Facility (TFFF).
The UK has announced its intention to invest £400 million into the Tropical Forests Forever Facility (TFFF) via a loan. This is subject to the finalisation of the Tropical Forest Forever Facility’s governance and operational arrangements, completion of our usual due diligence and our conditions being met.
The UK investment into TFFF as a loan, not a grant, ensures value for money for the British taxpayer. A UK investment into the TFFF means loan repayments will be made while still supporting climate and nature action. This demonstrates the UK’s new approach to climate finance, acting as an investor instead of a donor.
By funding the TFFF through a loan, instead of a grant, the UK government will be able deliver additional climate finance using a different ‘financial transaction’ budget. As announced on 22 July, this reprioritisation allows a switch of funding to support the cap on single bus tickets at £2 to help support people with the cost of living. Crucially, forest countries will not be expected to repay this funding. Instead, the Facility is designed to generate investment returns from its performance-based model, enabling it to both repay investors and reward countries that successfully protect tropical forests.
As a condition of the UK government investment, the government is seeking participation in the relevant fund oversight mechanisms. This will enable the UK to work alongside other countries to advance the UK’s priorities and interests whilst overseeing the investment, helping to ensure strong outcomes for UK taxpayers and investors, including the City of London.
The investment remains subject to final due diligence, including a review of the facility’s final size, crediting arrangements, structure and the terms of the loan. The UK government is proud to be a playing a part in shaping a facility, which was launched at COP30 and was an EarthShot Prize finalist, that will help keep the planet’s tropical forests standing for future generations.