Jakarta. By pledging $1 billion (Rp 16.6 trillion) to the Tropical Forest Forever Facility (TFFF), Indonesia is positioning itself to gain substantial financial support while advancing domestic forest protection and climate goals. The country could receive up to Rp 6.3 trillion ($360 million) annually in interest and returns on investment, helping to close its forestry finance gap and strengthen programs for forest monitoring, indigenous communities, and climate adaptation.

The TFFF, launched under Brazil’s leadership at COP30, operates as a blended-finance trust fund combining public and private capital. Its aim is to raise $25 billion from sovereign sponsors, unlocking an additional $100 billion from private investors. Annual returns, estimated at $3–4 billion, will be distributed to tropical forest countries that maintain deforestation rates below 0.5 percent. At least 20 percent of these funds are earmarked for indigenous peoples and local communities, recognizing their essential role as forest guardians.

Sita Primadevi, a climate and sustainability researcher at the World Resources Institute in Jakarta, said Indonesia holds a dual role within TFFF. As a sponsor, Jakarta assumes “junior capital” status, taking on higher financial risk while helping establish the fund. As a beneficiary, Indonesia stands to receive performance-based payments, offering a predictable source of additional financing for forest and land-use programs.

“The TFFF is a mechanism that rewards countries for maintaining forest cover while directly supporting local and indigenous communities,” She said during a presentation in Jakarta on Tuesday. “For Indonesia, it is an opportunity to generate new, sustainable financing for conservation, close the funding gap, and strengthen governance and monitoring systems.”

Sita said Indonesia could still benefit from the fund even without contributing capital. “The TFFF has real potential for Indonesia as a beneficiary, not just as an investor,” she said. “Even if Indonesia did not contribute to the fund, there is a possibility we could receive around Rp 6.3 trillion per year,” she said, referring to the potential annual payout Indonesia could earn if it meets TFFF’s forest-cover requirements.

“It won’t fully close the roughly Rp 35 trillion funding gap, but it would significantly help,” she added.

The Rp 35 trillion annual gap refers to the shortfall between what Indonesia needs each year to meet its forestry and land-use climate targets under the FOLU Net Sink 2030 plan and the funding currently available.

The fund’s performance-based model is simpler than mechanisms such as REDD+, focusing on forest cover rather than carbon stock estimates. Countries that maintain their forest cover within the required thresholds can receive payments of roughly $4 per hectare, with deductions applied if deforestation exceeds set limits.

To qualify, Indonesia must maintain a deforestation rate below 0.5 percent, demonstrate sound financial management, and allocate at least 20 percent of its payments to local communities. Importantly, TFFF funds are additional to existing conservation budgets, ensuring they supplement rather than replace the national budget.

Globally, TFFF has attracted commitments from Brazil, Norway, France, the Netherlands, and Portugal, with Germany endorsing the concept pending financial discussions with Brazil. The fund’s total target is $125 billion, with the World Bank serving as trustee to manage disbursements.

Sita added that TFFF aligns with broader COP30 outcomes, including the Baku-to-Belém Roadmap, which targets $1.3 trillion annually for developing nations by 2035, and a political commitment to triple climate adaptation finance. Such mechanisms aim to close financing gaps for climate mitigation and resilience, particularly in tropical forest countries.

For Indonesia, Sita said, TFFF offers tangible domestic benefits: it provides long-term funding, strengthens forest monitoring standards, promotes recognition of indigenous land rights, and incentivizes the preservation of forest cover. Effective implementation could position Indonesia as a global leader in performance-based tropical forest conservation while supporting national climate adaptation and mitigation targets.