Norway’s multibillion-dollar bet on forests: An interview with Minister Eriksen

With the announcement of two major forest finance initiatives at the climate talks in Belém, Brazil, there is renewed hope that the Congo Basin, home to the world’s second-largest tropical rainforest, could finally secure the sustained, equitable climate funding it has long been promised.

The first was the Tropical Forest Forever Fund (TFFF), unveiled by Brazil, which is backed by $6.7 billion in commitments. A lion’s share of this funding is coming from a $3 billion pledge from Norway.

The second was the official launch of the Canopy Trust on Nov. 17. The trust, operationalized by the Switzerland-based Catalytic Finance Foundation, has already raised $93 million, with a goal of mobilizing $1 billion by 2030 to support sustainable enterprises and early-stage, high-impact forest projects in the Congo Basin. It does so by leveraging public and philanthropic money to attract private investments.

Over the past two decades, the Congo Basin has attracted financing from a growing constellation of forest funds, often with big ambitions but with uneven delivery and results. Early efforts included the African Development Bank-hosted Congo Basin Forest Fund established in 2008, which mobilized about $186 million, followed by the Central African Forest Initiative (CAFI), now the dominant player, channeling performance-based finance and much of the $1.5 billion pledged at COP26 held in Glasgow, Scotland, in 2021. Newer instruments such as the Global Environment Facility’s Congo Basin Sustainable Landscapes Program add to this crowded landscape.

Finance also flows from other channels like the World Bank, the European Union-backed ECOFAC and from development agencies of countries like France, Germany and Japan. Yet the Congo Basin still receives only a fraction of the finance earmarked to protect rainforests, and several funds have struggled with slow disbursement and limited impact. The question now is whether the latest fund can break that pattern.

The CEO of Canopy Trust told Mongabay that the new initiative could plug a long-standing gap in the climate finance landscape with its focus on early-stage de-risking, a mechanism intended to make high-risk but high-impact projects viable for private investors.

But the excitement has been tempered by concerns that problems that bedevil earlier efforts will also plague new initiatives. Experts point to a pattern of climate finance mechanisms struggling with transparency, accountability, the hurdles African governments face in accessing finance, ensuring benefits for communities and the ability to deliver actual impact on the ground. Many question whether yet another fund, however well-intentioned, can avoid the pitfalls that hampered earlier efforts such as CAFI, the Green Climate Fund and various bilateral initiatives.

Norway is one of the world’s leading donors to initiatives aimed at conserving forests to tackle climate change, including the recently announced TFFF and the Canopy Trust.

Mongabay Africa spoke with Norway’s Minister of Climate and Environment Andreas Bjelland Eriksen via Google Meet in the lead-up to the launch of the Canopy Trust. Eriksen said their long-term commitment has generated measurable results and remains a cornerstone of Norway’s climate strategy.

The minister acknowledged the scale of the challenge. Climate finance needs in Africa are measured in trillions, and the Congo Basin continues to face structural barriers — from weak investment environments to chronic underfunding of local actors. That is where he sees the Canopy Trust playing a critical role.

The ultimate test, according to Eriksen, will be whether these mechanisms finally deliver what communities have long demanded: direct access, local ownership and tangible economic benefits.

Below is a lightly edited transcript of the interview conducted Nov. 17.

Mongabay: What motivated Norway to back the Canopy Trust?

Minister Andreas Bjelland Eriksen: I think this initiative is really important for us. This has been a COP that has focused heavily on rainforests and rainforest protection, which is very encouraging because rainforest conservation is one of the most efficient climate solutions we have, and, of course, an extremely important solution for addressing the nature crisis as well.

You might have seen that last week, Norway supported the TFFF — the new fund launched by Brazil — with a pledge of $3 billion, which is significant. And I think the pledges we’re making today for the Canopy Trust are also important.

One of the most important things to ensure that trees remain standing in the rainforest is to create economic opportunities: jobs, economic development and private investments. So, I think this initiative aligns well with that.

Mongabay: If we’re talking about climate funding overall in Africa, we’re speaking in trillions. At the current scale, what do you think these funds can realistically do to protect forests like those in the Congo Basin?

Minister Andreas Bjelland Eriksen: Norway has already disbursed more than $5 billion for tropical rainforest protection in Africa, Indonesia and South America, and we see that this financing has had an effect in many countries.

So, stepping up both public and private finance — we know that works. This is why it’s important for us not to scale back but to continue doing more, because we see that this type of financing delivers results.

And I think many people want to preserve the rainforest. We know that when we work with the people who live by and with the forest, they are often the strongest protectors of it. But we also need to create opportunities for them to thrive — opportunities to increase income and jobs in their regions. That is very much our perspective. We believe the TFFF has strong potential to contribute to this.

As you know, one of the eligibility criteria for TFFF funding is maintaining deforestation below 0.5%. That creates a strong incentive for countries to protect their forests.

And if you maintain deforestation under that level, you unlock direct, reliable, long-term financing — because you know that investment from the fund will be available over time.

Mongabay: To what extent are governments and other actors in the Congo Basin involved in the design of the Canopy Trust and its blended-finance structure?

Minister Andreas Bjelland Eriksen: Quite involved. I’ve discussed it several times with, for example, the DRC, which has been a strong proponent of the Canopy Trust approach.

Over time, it’s important to stress that the Canopy Trust cannot operate in isolation. It needs to be combined with strengthening market reforms and ensuring that private investments can come in. De-risking private investments is something we can help with through public funding, and governments can help by putting in place the right market frameworks so private investors can participate easily. This really is something we need to work on together.

Cameroon, the Central African Republic, the Democratic Republic of Congo, Gabon and the Republic of Congo are eligible for investment support from the Canopy Trust. So, this is truly a collaboration between governments and the private sector.

Mongabay: Is this all grants, or concessional funding, or are loans also involved?

Minister Andreas Bjelland Eriksen: From Norway’s side, this is all grant funding. We have already provided $10 million to the Canopy Trust, and we will provide more going forward, entirely as grants.

Mongabay: This is not the first major funding initiative in the Congo Basin. We’ve had CAFI. We now have the TFFF, launched by Brazil. And now we have this new blended-finance initiative. Overall, are you satisfied with how funding is flowing into the Congo Basin?

Minister Andreas Bjelland Eriksen: Yes, absolutely. I think the work CAFI does is very complementary to what the Canopy Trust will do. CAFI provides payment for environmental services to local communities to support sustainable primary production and ensure that production does not cause deforestation. The Canopy Trust, meanwhile, connects this production to markets, allowing value addition through processing, commercialization and scaling up.

One cannot really work overtime without the other. That’s the complementary effect I see between the two, and it has been well received. We’ve learned a lot, both from the Norwegian side and from the countries we support.

Capacity building is also extremely important — being able to measure deforestation and operate solid monitoring and reporting systems over time. Markets need to know what they are investing in, so good measurement systems are crucial. And for the Canopy Trust to work, there must be bankable projects.

Mongabay: And one of the biggest issues in the region is the lack of bankable projects for the private sector. How will this initiative help ensure that projects are designed in a way that will eventually attract private investors?

Minister Andreas Bjelland Eriksen: One of the most important things the Canopy Trust does is de-risk projects. It is meant to invest early in projects that are too risky for other investors. By going in before projects are fully bankable — before you can approach a private finance institution — it provides catalytic capital that helps projects develop beyond the initial stage and prepare for scaling.

That’s why the Canopy Trust works with concessional capital within investment funds — so that when the projects reach the scaling stage, they are bankable. It’s really a de-risking instrument that complements other de-risking tools to help projects attract market finance over time.

Mongabay: How do you make sure these projects benefit local people and not just commercial entities or big businesses?

Minister Andreas Bjelland Eriksen: That is where the complementarity becomes important. First, the Canopy Trust primarily targets small and medium-sized enterprises, which are often owned by local people and communities. That strengthens local opportunities. Second, CAFI’s work is also designed to support local communities, ensuring that opportunities are created for local people and workers.

Mongabay: Many actors in the Congo Basin complain about access to finance. Climate finance, whether through the Global Environment Facility, the Green Climate Fund or the Adaptation Fund, has been difficult to access. How do you ensure countries in the region can actually access this funding?

Minister Andreas Bjelland Eriksen: First, the design of the Canopy Trust and CAFI, directly supporting smallholder production systems, is itself a way of ensuring that capital reaches the places we want it to reach. Being a targeted mechanism is extremely important for access to finance.

Second, we’ve had very good discussions with some of the African countries we work with, and over time, we’ve tried to make CAFI’s instruments as lean as possible so funding reaches the ground quickly. We already have valuable lessons and can build on these to ensure capital is accessed faster.

There is still room for improvement, but I believe the Canopy Trust complements what we’ve done so far by directly targeting the actors who need this finance to develop local value chains.

Mongabay: Most developed countries prioritize mitigation over adaptation, yet adaptation is a major concern for African countries, including in the Congo Basin. How do these initiatives address adaptation needs?

Minister Andreas Bjelland Eriksen: One reason Norway strongly supports public funding for rainforest protection is that mitigation and adaptation are complementary. For instance, when it comes to flood control, keeping forests standing is one of the most effective tools available.

So, using nature-based solutions and creating payment systems to support them is one of the best ways to integrate mitigation and adaptation. It’s not sufficient alone, which is why we also invest in adaptation finance. We’ve committed to tripling our adaptation finance within our existing climate finance targets because this is important for us.

But we do think rainforest preservation and mechanisms like the TFFF are complementary to those efforts.

Mongabay: Funding for climate and biodiversity protection is very fragmented. Many funds are being created: the Canopy Trust, the TFFF and others. Isn’t this fragmentation inefficient?

Minister Andreas Bjelland Eriksen: I believe strongly that creating new funds just for the sake of it is not a good idea. Generally, I prefer having as few and as lean funds as possible. At the same time, these funds do different jobs.

The TFFF is an incentive mechanism to keep deforestation low. CAFI and the Canopy Trust help ensure not only that forests stand, but also that economic opportunities are created for the people who live by and with the forest. They do different things and complement each other well.

Mongabay: Finally, how do you ensure donor priorities align with the priorities of recipient countries? How do countries in the Congo Basin take ownership of these processes?

Minister Andreas Bjelland Eriksen: This is why we work closely and bilaterally with the countries we support. In many regions, we’ve shown that close collaboration over time helps align interests. We’ve learned a lot from the processes we’ve participated in.

The feedback we consistently get is that efficient and direct access for local communities is essential for these mechanisms to work. That is exactly why the Canopy Trust is built to ensure funding directly targets local communities and the people who need access to finance in order to benefit from it.

Banner image: Logging concession near Ndolou, Gabon. Image by Rhett Butler / Mongabay.

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Malavikavyawahare Editor

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