Support to developing national forest financing strategies and capacities
Since 2005, FAO and the NFP Facility have been supporting the development of national forest financing strategies (NFFS) in various countries. This is a focused capacity building effort to better understand the variety and effectiveness of various financing options and help the key stakeholders develop a country specific comprehensive forest financing strategy. The work was initiated as a sequel to a Dutch government supported project in Latin America that analysed forest financing in 19 countries and conducted regional and sub-regional synthesis. The initial project was implemented in partnership with IUCN’s Regional Office for Central America (IUCN-ORMA) and the Central American Commission for Environment and Development (CCAD).
Traditionally, the bulk of domestic forest financing comes from central or local government budgets, private sector investments and the sale of forest-related goods and services. However, with greater involvement of diverse stakeholders, funds are now being mobilized from various non-forestry sectors. Innovative approaches adopted to enhance economic benefits from forests include identifying new forest products and services and moving up the value chain by promoting value addition and diversifying product mixes. Mechanisms promoting payments for environmental services (PES) are gaining momentum, often encouraged and aided by proactive government policies and institutional arrangements. Forests are also now at the forefront of climate change mitigation and adaptation efforts.
The NFFS development process helps nations identify and develop these new and emerging financial mechanisms besides improving the investment climate for traditional instruments. In a country-led and country-owned setting, the process emphasizes strong stakeholder participation and involvement to improve sectoral collaboration and institutional arrangements. Besides providing guidelines and training to familiarise stakeholders with financing concepts, terminology, and processes, the capacity building process also provides a framework for systematic analysis and strategy development.
NFFS Experiences in countries
The process of holding dialogues and discussions among forest, finance, and other key stakeholders to develop and implement NFFS and selected forest financing instruments to support SFM is ongoing in the following countries:
Namibia (October 2007), Guatemala (November 2007), Suriname (June 2008), El Salvador (September 2008), Peru (December 2008), Paraguay (February 2009), Costa Rica (May 2009), Philippines (August 2009), Ecuador (September 2009).
The dates in brackets indicate the initial step of this NFFS development process which starts with a training workshop that brings together interested stakeholders that are relatively new to each other. This launching workshop also helps to establish new networks and create a common understanding about conventional and innovative ways to finance forest management.
More information on the workshop can be found on the FAO website on nfps.