The Project
FLILA within the International Climate Initiative (IKI)
The context
The FLILA project is part of the International Climate Initiative (IKI) initiated by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU). Our objective is best described by the official project title “Upscaling private Forest Landscape Restoration investments in Latin America”. This means more than just planting trees. It means paving the way for a forest-based green economy that meets the needs of present and future generations for decades to come.
The challenge
Our work stands in support of the Bonn Challenge, which describes the global effort to bring 150 million hectares of the world’s deforested and degraded land into restoration by 2020, and 350 million hectares by 2030, respectively. In Latin America alone, national governments have made commitments to bring 50 million hectares into restoration by 2020. These com-mitments play a key role in achieving the nationally determined contributions under the UN-FCCC Paris Agreement.
The barriers
Meeting such ambitious targets for forest landscape restoration requires significant private sector investments, as public support is unlikely to meet financing needs. However, key bar-riers still hinder such investments. Investors need to ensure that invested funds generate the intended environmental and social impacts while mitigating risks. The challenge in collect-ing this information hinders the development of suitable financial products and bankable forest landscape restoration projects. Investors have yet to design credit products and ade-quate project pipelines that allows them to scale up forest landscape investment.
The strategy
The goal of the FLILA project is to help countries meet their forest landscape restoration targets by addressing the described barriers through pre- and post-investment activities. We work with development banks, impact funds and financial intermediaries, which are potential sources for the much-needed private capital. The project includes the development of an open-access forest landscape impact-monitoring tool for assessing the environmental and social impacts of forest landscape restoration investments. We will test forest landscape lending products and pilot investments in Peru, El Salvador and Paraguay.
Expected results
Public and private investors will visibly promote the tools and the upscaling of successful forest landscape restoration business models within and beyond the project countries. Investors will also gain knowledge on investing in forest landscape restoration and the monitoring of impacts. By developing credit products and project pipelines, the project will demonstrate the business opportunity for other investors to devote resources to upscale forest landscape investments.