National Forest Funds, Towards a solid architecture and good financial governance

The recent forest financing study by the Advisory Group on Finance (AGF) of the Collaborative Partnership on Forests (CPF) noted increased interest among countries to establish and effectively manage national forest funds to support sustainable forest management. National forest funds, in their most basic form, are designed to set aside a portion of national revenues for forestry purposes and exist for more than a single government budget cycle. While in some cases they were established as part of the national forest programmes, in others they were constituted as windows under national environment funds. Despite their existence in more than 50 countries, and their increased importance in recent years, currently, there is little information on their use or on potential ways and means of improving their functioning. This working paper endeavors to address this gap.

This publication is the outcome of a joint initiative by the Food and Agriculture Organization of the United Nations (FAO) and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ) and aims to improve our understanding of this institutional mechanism and of the frameworks within which they are established. After describing the key elements of national forest funds, it discusses a set of elements that serve as a starting point for developing a fund performance assessment methodology. Drawing on some practical experiences of countries operating national forest funds, it illustrates how different funds can be compared and evaluated.