Action by KfW Entwicklungsbank

Protection and Sustainable Use

Bongo antilopes and elephants at a waterhole in the Nationalpark of de la Sangha

Stopping deforestation and the loss of biodiversity. Source: WWF (2011)

Through KfW Entwicklungsbank Germany is one of the biggest donors for preserving forests and biodiversity worldwide. Since 1990 we support respective projects in more than 50 countries with a total volume of more than 1.6 billion euros. About 46 per cent are implemented in Latin America, 31 per cent in Africa, and approximately 18 per cent in Asia. In 2010 KfW signed 18 new financing agreements with a total volume of 129 million euros. Together with our partners in developing countries, sanctuaries are established, illegal logging is curbed, fire prevention is strengthened, and land tenure and forest management is fostered. Which measures are most effective against environmental degradation varies from country to country.

Grants, Loans and Trust Funds

KfW thereby applies budget funds, allocated by the Federal Ministry for Economic Cooperation and Development and the Federal Ministry for the Environment, Natural Conservation and Nuclear Safety. These are supplemented by debt for nature swaps. The major share of these funds is made available for projects in order to suit the initial planning and investment of Nature Conservancy Projects and to contribute to preserving global public goods. Loans are applied in China and Vietnam, mainly for afforestation and forest management.

Since 2007 capital contributions for endowment funds have been introduced by the Federal Government as new instrument. Endowment funds serve the long term hedging of investments, especially in nature reserves: the yield only is utilized to cover the operational costs, the endowment capital is left untouched. Until now KfW supports funds with endowments of close to 50 million euros in the name of the Federal Government. Further activities of around 86 million euros are currently being prepared.

An Area as Large as France, Belgium and the Netherlands

Most important instrument in abating deforestation and the loss of biodiversity is the establishment and safeguarding of nature reserves. Currently, KfW Entwicklungsbank supports more than 300 sanctuaries worldwide – in 39 countries. All together, 64 million hectars of forest are protected in these zones. This translates into the area France, Belguim and the Netherlands taken together. Apart from that, the activities for protecting coral reefs, mangroves and savannah are being expanded.

Sustainable management of natural resources is an essential component of pure conservation projects. Nature conservation is only sustainable if man and nature both benefit. Forest management and afforestation are the focus of many projects. In Vietnam alone more than 130,000 hectars of forest were reforested and rehabilitated since the beginning of the 1990ies.

Since forest conservation was added to the eligible activities for climate financing in 2005 under the abbreviation REDD (Reducing Emissions from Deforestation and Degradation) results oriented payments have moved into the focus of the debate on conservation of tropical forests worldwide. According to the concept of REDD climate and development funds are only made available if developing nations are able to prove that they have reduced greenhouse gas emissions through forest conservation. This approach is applied in Brazil on a larger scale. Currently the Federal Government supports REDD programs in the magnitude of 150 million euros in 13 countries through KfW. The new commitments of 2010 already contribute to a CO2 emission reduction of 58 million tons over a period of 20 years.

Further Information

Last updated: July 2011