REDD+ funding mechanisms

In 2019, UN-REDD consolidated its knowledge and technical assistance stream on REDD+ funding mechanisms, with concrete efforts to help countries organize, mobilize, sequence, channel, co-ordinate and monitor finance for REDD+.

This support took the form of technical advice on a range of issues, from finance for policy reforms to incentive schemes and investment programmes, and from private-sector finance to results-based payments, depending on the opportunities, needs, circumstances and priorities of each country. The focus of technical advice and knowledge generation under this output was to connect funding (public and private, domestic and international) with national strategies, policies and safeguard measures.

During the year, UN-REDD generated, mobilized, and offered knowledge to craft innovative funding arrangements in support of implementing REDD+ actions in five countries. Most notably, UN-REDD provided intense support to four countries – Brazil, Chile, Ecuador and Paraguay – to access REDD+ results-based payments from the GCF, for a combined total of $228.6 million. UNREDD also provided technical support to national entities in Ecuador and Honduras to achieve GCF accreditation.

In addition, UN-REDD supported a number of exercises to distil and codify knowledge related to REDD+ funding mechanisms and results-based payments. UN-REDD hosted a webinar to share information regarding the GCF results-based payments proposal of Brazil with civil society organizations and observers, and presented lessons learned from the Brazil results-based payments proposal at the GCF REDD+ talks in Songdo, Republic of Korea, in February 2019. UN-REDD also briefed African countries on approaches and challenges for REDD+ results-based payments during the GCF Africa REDD+ workshop, held in Abidjan, Côte d’Ivoire, in August 2019. UN-REDD technical advice also informed detailed comments to the midterm review of the GCF pilot programme for REDD+ results-based payments.

In 2019, UN-REDD also provided support to Costa Rica, Mexico and Paraguay to access REDD+ results-based payments from market sources, as these countries had already developed strategies to access REDD+ results-based payments from a variety of market and non-market sources.

In Paraguay, UN-REDD technical assistance served to advance an innovative collaboration between the country and the Dutch Entrepreneurial Development Bank (FMO) in an initiative that will provide a $240 million concessional credit line for cattle ranchers and soy farmers to invest in climate-resilient and deforestation-free practices. Farmers are often hesitant to do so, as such practices require long-term financing, which is expensive. FMO therefore aims to address this market failure by providing farmers with concessional loans that will enable them to invest in these practices. The loans will be conditional on a no-deforestation commitment by farmers. In Ecuador, UN-REDD technical assistance supported the conclusion of a memorandum of understanding with Lavazza S.p.A creating a novel partnership between the country and Lavazza to pilot the world’s first production and marketing of “deforestation-free” coffee.

This report is made possible through support from Denmark, Japan, Luxembourg, Norway, Spain, Switzerland and the European Union.