Forest Carbon Partnership Facility - Forest Carbon Fund

Type of Recipient
Public entity at the national level
Public entity at the sub-national level
Public entity at the regional level
Region
Middle East and North Africa
South Asia
Sub-Saharan Africa
Fund Size

In total the FCPF amounts to over USD 1.4 billion pledged and deposited:

  • The Readiness Fund: USD 472 million
  • The Carbon Fund: USD 947 million.
Co-financing Requirement
Yes
Sectors and Themes
Forestry and Other Land Use
Climate Objective
Mitigation
Type of Support Provider
Multilateral
Trustee or Administrator
World Bank
Contact Information

The Forest Carbon Partnership Facility (FCPF) is a World Bank multi-donor fund of governments and non-governmental entities, including private companies, and consists of two separate but complementary funding mechanisms, namely a Readiness Fund and a Carbon Fund. 

The FCPF was created to assist developing countries to reduce emissions from deforestation and forest degradation, enhance and conserve forest carbon stocks, and sustainably manage forests (REDD+). 

Launched in 2007, the FCPF works with 47 developing countries across the world and 17 donors.

The Readiness fund operated until 2022. However, in June 2024, the Carbon Fund participants approved an extension of its lifespan to December 2028.

The FCPF aims to:

  1. Provide financial and technical assistance to:
    • Assist eligible countries with their REDD+ efforts to achieve emission reductions from deforestation and/or forest degradation
    • Build recipient country capacity for benefitting from possible future systems with positive incentives for REDD+.
  2. Pilot an emissions reduction performance-based payment system for REDD+ activities, to ensure equitable benefit sharing and promote future large-scale positive incentives for REDD+
  3. Test ways within the REDD+ approach to conserve biodiversity and sustain or enhance livelihoods of local communities
  4. Disseminate the knowledge gained through the development and implementation of the FCPF and related proposals and programmes for readiness and emissions reductions.
Support Provider

The FCPF is supported by a diverse group of entities, including governments, non-governmental organisations (NGOs), and private companies. Private companies are required to make a minimum financial contribution of USD 5 million to participate.

Readiness Fund Contributors:
European Commission, Australia, Canada, Denmark, Finland, France, Germany, Italy, Japan, Netherlands, Norway, Spain, Switzerland, UK and USA.

Carbon Fund Contributors:
European Commission, Australia, Canada, France, Germany, Norway, Switzerland, UK, USA, BP Technology Ventures Inc., The Nature Conservancy.

 

Purpose of Support
Project and program implementation
Co-financing Requirement Details

Carbon Fund payments will be complementary to financing from other sources, e.g., the government’s own budget, World Bank financing, loans or grants from the Forest Investment Program, the Global Environment Facility, bilateral donors, or the private sector.

Funding Type
Other
Monitoring and Reporting Procedures

The FCPF utilised the Readiness Fund Dashboard to monitor and provide detailed overviews of the implementation status and related issues of its programmes until its closure in 2022. The FCPF continues to use the Carbon Fund Dashboard to regularly update stakeholders on the progress of its emission reduction programmes, offering detailed insights into implementation statuses and any pertinent issues.
In May 2019, the FCPF adopted an updated programme-level Monitoring and Evaluation (M&E) Framework. This framework includes:

  1. a revised FCPF results framework (revised impact, outcome and output statements, and revised indicators)
  2. an indicator-by-indicator overview and reporting guidance (rationale for indicators, data sources, measurement approaches, reporting responsibilities)
  3. a revised progress reporting templates
  4. an outline of options for future FCPF evaluations.

Independent Evaluations
FCPF programmes have been evaluated in 2011, 2016 and 2023. The first independent programme evaluation was commissioned by the Participants Committee of the FPCF and was conducted by the Nordic Agency for Development and Ecology in 2011. They found that “since its inception in 2008, FCPF has made significant progress in meeting the first and last objectives (building in-country capacity and disseminating lessons learned in readiness), but less progress has been made on the two other objectives as would be expected at this early stage (piloting a performance-based system of payments; enhancing livelihoods & conserving biodiversity)”.
The second independent evaluation was led by Indufor Team in 2016. The main findings on relevance were:

  • “The FCPF continued to add value to REDD Countries through its common readiness framework and structured approach to REDD Readiness,
  • In some countries, the FCPF Delivery Partners had not integrated REDD+ agenda into their country engagement strategies even if they supported REDD+ through the FCPF,
  • Most Financial Contributors had common strategic priorities to which the FCPF had responded appropriately”.

In April 2023, the FCPF commissioned its third independent evaluation to assess the programme’s achievements, challenges, and lessons learned. The findings from this evaluation were published in June 2024 and highlighted the following:

  • While the FCPF has contributed to biodiversity conservation and improved livelihoods in participating countries, the evaluation highlighted the need for more robust monitoring and reporting mechanisms for these non-carbon benefits
  • By developing readiness capacities and piloting results-based payments, the programme has facilitated countries’ entry into carbon markets, thereby promoting sustainable forest management practices
  • The establishment of 68 partnerships with the private sector has been instrumental in advancing REDD+ initiatives.

Complaint mechanisms
The World Bank’s applicable policies and procedures on grievance and accountability mechanisms apply through the ‘Common Approach’ for FCPF Readiness Fund delivery partners and regulate the establishment of FCPF related grievance and redress mechanisms. FCPF has a country/programme feedback and grievance redress mechanism. Stakeholders (including geographically, culturally or economically-isolated or excluded groups) can use this mechanism during the preparation phase and the operation stage to address their grievances.

In addition, affected communities can file complaints to the World Bank Inspection Panel when they feel that FCPF programmes cause harm to people or the environment.

Organizational and Decision Making Structure

The World Bank provides secretariat services through a Facility Management Team. The team has three core functions:

  1. Administering the Funds: The World Bank, as the trustee of the FCPF’s Readiness Fund and Carbon Fund, manages day-to-day operations, including fund management and administration
  2. Supporting Governance Bodies: The FMT prepares proposals for approval by the FCPF’s governing bodies, such as the Participants Committee and the Carbon Fund governance, facilitating decision-making processes
  3. Providing Technical and Methodological Support: The FMT offers technical assistance to REDD+ countries, including overseeing validation and verification processes to ensure compliance with World Bank Group policies and Carbon Fund requirements.

Additionally, the FMT manages the Carbon Asset Trading System (CATS), the FCPF’s transaction registry, and ensures that all operations comply with applicable policies in areas such as safeguards, procurement, and financial management.

Eligibility Criteria

Only developing countries that are members of the World Bank can participate in the FCPF. Eligibility for accessing the FCPF is not restricted to ODA countries. Currently, the FCPF has 47 country participants.

Conditions for participation in the Readiness Fund

  • REDD+ Country eligibility
    • An eligible REDD+ country is:
      • A borrowing member state of the IBRD or IDA; and
      • Located in the tropical area or sub-tropical area
  • Relevance of Country in the REDD+ context
    • Priority should be given to countries with the following characteristics:
      • Significant forest area and carbon stock;
      • High importance of forests in the national economy; and
      • High current or projected deforestation or forest degradation
  • Conditions for participation in the Carbon Fund
    Countries that successfully participated in the Readiness Fund could then be selected, on a voluntary basis, to participate in the Carbon Fund.
Eligible Countries

The FCPF is open to REDD+ Country Participants. REDD+ Country Participants are defined as developing countries located in a subtropical or tropical area that has signed a Participation Agreement to participate in the Readiness Fund. Forty-seven developing countries have been selected to join the FCPF (18 in Africa, 18 in Latin America, and 11 in the Asia-Pacific region).

The Carbon Fund is only open to those countries that have prepared a Readiness Preparation Proposal, and have had their Readiness Package (R-Package) endorsed by the PC under the Readiness Fund of the Forest Carbon Partnership Facility (FCPF).

Information on how to
Understand steps to access

The Carbon Fund Process consists of the following steps:
a) ER Program pre-approval: Preparation of the ER Program Idea Note (ER-PIN) and presentation to
the FCPF Carbon Fund for its acceptance;
b) ER Program approval: Preparation of the ER Program Document (ER-PD), FCPF due diligence and
presentation to the Carbon Fund for its acceptance;
c) Monitoring and Reporting:
d) Validation and Verification:
e) Payments and allocation of ERs to the Carbon Fund
f) Post-Carbon Fund

For detail, see here.