By Eduarda Thurler, Victoria Bastos, Ana Cecília Gonçalves and Ana Beatriz Villela
Expanding investments in landscape and forest restoration is urgent and strategic. According to MapBiomas, Brazil has over 30 million hectares with high potential for ecological and productive restoration. Restoring these areas could generate up to 2 million jobs and drive over R$$ 230 billion in bioeconomy and reforestation chains, according to estimates from the Brazil Climate, Forests and Agriculture Coalition.
Resources are available, but this money is not yet reaching the restoration chain. The global flow of climate finance exceeds US$1.4 trillion annually, according to the Climate Policy Initiative, but only US$3 trillion is allocated to Nature-Based Solutions. There are also entrepreneurs and communities willing to restore our ecosystems, but they face difficulties accessing credit and resources. The result is that there is capital seeking impact and projects seeking resources, but the two rarely meet.
How do we build a bridge connecting these two worlds?
The Fundo Flora emerges as a new investment model that could redefine restoration financing in the Amazon and in Brazil.
To be launched at COP30 in Belém, the Fund is inspired by the TerraFund for AFR100 model, implemented by WRI in Africa. This model has already mobilized US$33 million in funding and is supporting 198 projects that have restored more than 65,000 hectares. TerraFund shows that it is possible to fill the investment gap for small and medium-sized organizations and companies that are at the heart of a new restoration economy, connecting people who want to restore with the necessary funding.
Financial innovation to scale up the restaurant industry.
An initiative of WRI Brazil and with financial management by Sitawi Finanças do Bem, Fundo Flora is a financing partnership focused on selecting, training, and monitoring locally led restoration projects in the Brazilian Amazon. It is structured as a facility – a platform that brings together different sources and instruments of financing under a single governance structure, allowing the combination of philanthropic, public, and private capital to amplify the impact of socio-environmental projects.
The great innovation of Fundo Flora is that it goes beyond traditional financing. Its investment thesis incorporates blended finance mechanisms, combining philanthropic, public, and private capital. Furthermore, it focuses on a results-based finance approach, where part of the payments is linked to socio-environmental metrics, such as hectares restored, jobs created, and the productive inclusion of local communities.
This strategy offers two main advantages:
- Risk reduction to attract private capital, through concessional resources that function as guarantees or first loss coverage.
- Large-scale mobilization, allowing investors of different profiles to participate in the same vehicle, from philanthropic donors to institutional and impact funds.
In practice, the Fund will invest in ventures and projects with socio-environmental relevance, technical consistency, execution capacity, impact potential, and alignment with Brazilian public policies, focusing on Assisted Natural Regeneration (ANR), agroforestry, and the bioeconomy of socio-biodiversity.
The arrangement combines donations to organizations with projects focused on restoration, loans to support bioeconomy ventures, and hybrid investment for organizations that need support on both fronts, plus technical support and strategic monitoring for up to six years via the TerraMatch platform.
Monitoring is one of the pillars of Fundo Flora: more than just tracking the use of resources, it's about ensuring transparency, credibility, and verifiable results for investors and society. This approach allows the fund to become a reliable mechanism for generating impact and attracting new resources.
More than just financing projects, the fund enables a new standing forest economy, where natural regeneration and the sustainable use of biodiversity go hand in hand to transform landscapes and generate prosperity.
Transforming the Arc of Deforestation into the Arc of Restoration
In Brazil, Fundo Flora was adapted to the Amazonian context, initially focusing on the state of Pará. The goal is to mobilize US$10 million to finance, monitor, and accelerate restoration projects led by local organizations. But why choose to start with the Amazon region of Pará?
Pará is today one of the most strategic states for restoration in the Amazon. Besides being the largest in economy and population in the region, it has taken a leading role by launching the first Native Vegetation Recovery Plan (PRVN-PA) in the Amazon, aligned with the Amazônia Agora Program, a pioneering state initiative in the region that aims to align economic and social development with environmental management policies and the fight against deforestation.
With the goal of restoring 5.65 million hectares by 2030, Pará can play an important role in transforming the "arc of deforestation" into the "arc of restoration." The expectation is that the implementation of the PRVN (National Program for the Recovery of Deforested Areas) can generate... up to R$ 40 billion in wealth, R$ 9.4 billion in income and R$ 1.9 billion in revenue for the state., according to a study by WRI Brasil.
This vision is directly connected to the New Economy for the Amazon (NEA), which points to restoration and the bioeconomy as drivers of regional economic transformation. The study, launched in 2023, indicates that financing restoration and the transition to a low-carbon economy requires new arrangements capable of mobilizing resources on a large scale — estimated at R$ 2.56 trillion by 2050, approximately 1.8% of the national GDP per year.
To achieve this, it is recommended to create innovative financial mechanisms, such as hybrid instruments (blended finance) that combine public, private and philanthropic capital, and strengthen incentives for the local bioeconomy – exactly the type of financial innovation that Fundo Flora seeks to bring about.
From local impact to the global climate agenda.
Fundo Flora is expected to support approximately 15 projects in different municipalities of Pará in its first round of investments. By 2026, the goal is to reach 50–75 organizations through funded projects, restoring between 5 and 7 million trees in 12,000 to 20,000 hectares of degraded areas, benefiting thousands of families throughout Pará, as well as strengthening local governance, monitoring results, and systematizing lessons learned.
In its first phase, Fundo Flora operates primarily with philanthropic capital, focused on the initial structuring of the mechanism, strengthening local capacities, and directly financing restoration projects. In this stage, the Fund has financial support from Bezos Earth Fund, from the AKO Foundation, and from The Coca-Cola Foundation.
The next step seeks to consolidate this foundation and create the necessary conditions to attract private investment, essential for scaling up the restoration. With this approach, Fundo Flora positions itself as an innovative and replicable mechanism to strengthen sustainable production chains in the Amazon, in addition to directly contributing to Brazil's commitments under the Paris Agreement and the global climate agenda.
Innovative financing models may be the key to building a new restoration economy, consolidating the Amazon as an engine of a new green economy, based on the standing forest, biodiversity, and the people who depend on it for their livelihood.
*This article is a collaboration between WRI Brasil and Sitawi Finance for Good and is authored by:
Ana Beatriz Villela – Senior Impact Investment Coordinator at Sitawi
Ana Cecília Gonçalves – Restoration Manager at WRI Brazil
Eduarda Thurler – Finance and Investment Coordinator at WRI Brazil
Victoria Bastos – Project Coordinator at WRI Brazil
