European country will host TFFF’s financial arm; project has to raise US$10 billion by December to start operations
The Luxembourg government formally announced its membership of the TFFF (Tropical Forests Forever Fund). The European country has committed to injecting R$285 million (the equivalent of 50 million euros) in the project from 2026 to 2030, in addition to maintaining long-term annual donations. With these additional resources, the fund now gathers US$6.8 billion.
The announcement was made at the end of the International Climate Finance Daysin Luxembourg, with the presence of the Minister of Foreign Affairs of Brazil, Mauro Vieira. It was decided that the European country, in addition to being an investor, will be the official headquarters of the project’s investment arm, called TFIF (Investment Fund for Tropical Forests).
The TFFF was created as a mechanism to remunerate countries that keep their tropical forests standing. The model establishes annual transfers that could reach US$4 billion per preserved hectare, based on satellite monitoring. The initiative has support from the World Bank, international organizations, civil society, indigenous peoples and local communities.
For the TFFF to actually start operating, it is necessary US$10 billionwhich the Lula government hopes will happen by December 31st of this year. The fund officially at COP30 with a robust base of investment intentions, .
Reaching the level of US$10 billion in public capital works as the contractual trigger to activate the fund. The final long-term goal is to structure an ecosystem worth US$125 billion, with US$25 billion coming from governments and another US$100 billion raised directly from the international private sector.
As the official headquarters of the TFIF, Luxembourg will serve as the legal domicile and operational structure of the initiative. The country will use its banking infrastructure and global leadership in sustainable securities to manage, audit and distribute resources internationally, providing the legal security required by large private investors.
In addition to the initial contribution, the Luxembourg government will adopt a model of annual return of taxes charged on the fund’s income, causing these taxed values to return to the structure as reinvestment.
Financial engineering aims to accelerate the pace to reach the US$10 billion needed for the fund to fully operate.
“What started as a Brazilian proposal is becoming a truly global initiative, which will now establish an important presence in Luxembourg”stated the Brazilian chancellor, Mauro Vieira, during the announcement.
The topic will be discussed at the last major UN preparatory meeting on climate before COP31, . The event is held in Bonn, Germany, from June 8th to 18th.
What is TFFF
Created by Brazil and launched at COP30, in Belém, the TFFF acts as an international financing mechanism focused on keeping tropical forests standing.
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Operation: The fund captures resources on the market and financially rewards developing countries that are proven to preserve their vegetation cover.
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Traditional communities: The rules stipulate that, at a minimum, 20% of all payments are aimed directly at indigenous peoples and local communities.
In the first announcement of the initiative, in September 2025, that the fund represents a structural change in the way of facing the climate crisis: “TFFF is not charity. It is a worthwhile investment in humanity and the planet against climate chaos.”
