Brazil signed the largest conservation deal in history, worth $215 million, by using a Wall Street-inspired mechanism called “Project Finance for Permanence”. This model brought together a whole host of foundations, NGOs and private backers by holding back their funds until the target amount had been reached. Designed to replace piecemeal funding, the deal will protect 600,000 square kilometres of Amazonian rainforest.

Due to the wide range of partners involved, it took 16 years to finally secure the deal, although experts say it should be now be possible to do it within a four-year political term

The PFP deal brought together a large number of backers by holding back their funds until the target amount was reached, and then sealing the deal with a single closing. The funds have then been released to the project as it reaches its milestones, providing a clear template for how they will be spent in the long term. PFP milestones can be things like ensuring all revenue from a national park is used for its maintenance

The government of Brazil, the Brazilian Biodiversity Fund, the WWF-Brazil, the Ford Foundation, the World Bank, the Gordon and Betty Moore Foundation and the German Development Bank

The project secured the largest conservation deal in history, worth $215 million, which should protect 600,000 square kilometres of the Amazon. One example of what it has funded is the Tumucumaque Mountains National Park, the second largest national park in the world. It covers 38,800 square kilometres, about the same size as Switzerland. Protected species include jaguars, macaws and and harpy eagles. Around 5,000 square kilometres of the Amazon are lost annually

The Story

The largest conservation deal in history, worth $215 million, was agreed between the Brazilian government and a whole host of foundations, NGOs and public-private funders to protect 60 million hectares of Amazonian rainforest. Achieved with a unique, Wall Street-inspired mechanism called “Project Finance for Permanence”, it is designed to replace piecemeal funding and provide support for these protected areas in perpetuity.

A PFP makes it easier for governments to bring together a large number of backers, including, in this case, the Brazilian Biodiversity Fund, the WWF-Brazil, the Ford Foundation, the World Bank, the Gordon and Betty Moore Foundation and the German Development Bank. Donors’ funds are held back until the target amount is reached, and the deal is then made with a single closing.

After that point, the funds are released to conservationists and wildlife specialists piece by piece as the project reaches milestones. This is intended to bring in much more money by providing a clear template for how it will be spent in the long term. PFP milestones can be things like ensuring revenue from a national park is used for its maintenance.

Best practice on a PFP, according to the WWF, is to complete the deal within four years, so that it can be done in one political term. Before making a widespread pitch, at least a third of the funding should be in place.

“Brazil’s participation has an importance which goes beyond symbolism,” said Garo Batmanian, World Bank Lead Environment Specialist. “This is the first step, and many other steps must be taken. We are starting to see this PFP approach being considered by other countries.”

Since it was signed in 2014, the Amazon Region Protected Areas Program [ARPA] has already shown results. Its 60 million hectares are split over some hundred sites, including Tumucumaque Mountains National Park, the world’s largest tropical forest national park and the second largest national park anywhere. Earmarked in 2002, the site has now been turned into a park. Its borders were designed to protect its biodiversity and at 38,800 square kilometres, TMNP is about the same size as Switzerland. Protected species include jaguars, macaws and and harpy eagles.

The World Wildlife Fund estimates the annual cost of managing existing protected areas worldwide to be $2.5 billion per year. At present, available spending is only $800 million per annum. Using Brazil’s initiative as an example, two other PFPs have been completed in Canada and Costa Rica and and two are currently in development in Bhutan and Peru. According to the World Wildlife Fund, the model can also be adapted for large-scale social projects and peace processes, such as in Colombia.

Picture: Flickr/ CIFOR