Towards effective national forest funds

With growing recognition of the critical roles played by forests in addressing global challenges such as climate change, food security and poverty alleviation, supporting sustainable forest management (SFM) remains key. Yet the financing of SFM continues to be a challenge; it has been a standing item at relevant global fora for decades. Strengthening financing is about more than just raising money. Broadening and diversifying the financial base for SFM entails, among other things, effectively demonstrating the multiple benefits of investments in forests; creating new and innovative revenue streams; establishing viable and lasting partnerships with other economic sectors; and strengthening the financial management capacity of forestry institutions.

 

National forest funds (NFFs) have gained international attention in recent years as potential means for addressing the issue of financing SFM. A forest financing study by the Collaborative Partnership on Forests’ Advisory Group on Finance, and the Tenth Session of the United Nations Forum on Forests, noted the potential role of NFFs in absorbing, managing and using domestic and foreign investments to support SFM. Nevertheless, despite the existence of NFFs in more than 50 countries, limited information is available on how NFFs work, the experiences gained from their operation, and the lessons learned. 

 

This publication, Towards effective national forest funds, addresses the need for more information on the way NFFs work and how best to establish and manage them. It shares some of the lessons that have emerged from the establishment and management of NFFs with the aim of supporting countries in designing and operating NFFs effectively according to their specific needs and circumstances. Based on a review of practical experiences, this publication outlines the general architecture and design elements of NFFs, and the potential approaches and actions that can be taken to improve their performance.