50 mill. USD partnership to protect Ecuador's rainforest

During Oslo Tropical Forest Forum in June 2018, Ecuador, Germany and Norway pledged to work together to reduce deforestation in Ecuador through support to the country’s efforts to reducing deforestation.

This includes the expansion of an innovative program incentivizing forest conservation and the creation of alternative income sources to local communities. In the agreement, signed during the Oslo Tropical Forest Forum, Germany and Norway commit up to 50 million USD in results-based finance—payable only if deforestation is in fact reduced in comparison to the recent past.

— Ecuador has worked hard over many years to reduce deforestation. We are very happy to partner with Ecuador to reward these results, and to help protect one of the world's most precious and biodiverse forests for the future. We will not meet the Paris climate goals without reducing tropical deforestation, said Ola Elvestuen, Norway’s Minister of Climate and Environment.

The funds will be delivered through the REDD Early Movers Program (REM) operated by the German Development Bank.

Rainforests are essential to the climate

Ecuador, among the most biodiverse countries in the world, has a forest cover of 13,6 million hectares, about half the size of United Kingdom, of which the largest share lies within the Amazon biome. In the 1990’s and 2000, the country had one of the highest deforestation rates in Latin America. With a strong commitment to halt deforestation, Ecuador has been active on the global and national scene. Since 2009, deforestation in Ecuador has continuously declined.

— This is an important agreement. Ecuador has been reducing deforestation consistently since 2009. Through results-based payments from Germany and Norway we are now being rewarded for this effort, and incentivized to reduce emissions, said Tarcisio Granizo, Minister of the Environment of Ecuador. With the payments, we will invest in a more sustainable economy.

Benefit to local communities and indigenous peoples

The funds will be reinvested by Ecuador into activities that benefit local communities, supporting sustainable production and the protection of forests. In addition, the funds will be invested to strengthen government capacities and policies.  At least 70% of the funds will be invested towards benefits at the local community level.

One of the most important measures to reduce and prevent deforestation in Ecuador has been the establishment of the Socio Bosque Program in 2008. It is an innovative program to incentivize forest conservation and create alternative income sources to rural communities. Today it benefits 170 000 rural inhabitants throughout the country. The payment from Norway and Germany for reduced emissions from deforestation will contribute to expanding the Socio Bosque Program, restore forests, and support indigenous people’s own initiatives.

— This partnership helps Ecuador to sustain its considerable efforts in protecting their forests. Through the innovative benefit sharing structure, REM ensures that especially local communities and indigenous groups are an integral part of the program. Rewards for traditional forest protectors and incentives to reduce deforestation are combined to strengthen the livelihoods of the forest dependent communities, says Stefan Schmitz from the German Ministry for Economic Cooperation and Development.

An Early Mover

Ecuador has also advanced significantly in developing the necessary governance and institutions to receive payments for reduced emissions from deforestation and forest degradation (REDD+) as agreed under the UN Framework Convention for Climate Change (UNFCCC). The country has today a National REDD+ Action Plan, a system to monitor report and verify deforestation and emission from deforestation (MRV), and has submitted the first Safeguards report for REDD+.

— Ecuador is considered a REDD+ Early Mover in reducing greenhouse gas emissions from deforestation because of its long-term and demonstrated political commitment to protect its forest ecosystems and to support forest-dependent communities. Ecuador has also proven its capacity to reduce deforestation and therefore deliver results that we can reward. We are very proud to collaborate with Ecuador, where we have the first Program at national scale, says Christiane Ehringhaus, the Coordinator of the REDD Early Movers Program of KfW, the German Development Bank.

The funds will be delivered through the REDD Early Movers Program (REM) operated by KfW German Development Bank in partnership with technical support from GIZ.