Financial mechanisms for SFM

This training module builds on experiences generated in various countries around the world. It aims to help national institutions develop comprehensive national financing strategies as an element of their national forest programmes. Basically, a national strategy for forest financing consists of an overall vision of all the financial needs and means to promote the sustainable use and conservation of forests in a given country according to its policy and development objectives. The strategy should provide guidance to policy-makers and forest stakeholders on how to finance, in the short and long terms, planned activities for sustainable forest management, taking into consideration the multi-purpose management of forest resources and ecosystems.

This workshop can be seen as an initial step to bring together stakeholders that may be relatively new and possibly unfamiliar to each other. The traditional forest officer often does not know officers from the Ministry of Finance, and private banking managers often know little about forests. This module should thus help establish new networks and assist in creating some common understanding about conventional and innovative ways to finance forest management, be it through plantations or conservation, and with community involvement or through private enterprise.

This module seeks to help participants:

  • understand the role of financing mechanisms in the context of the national forest programme development and develop a sense of urgency in developing a financing strategy;
  • critically assess existing financing mechanisms in their strengths and weaknesses and role towards achieving NFP objectives and SFM at large;
  • broaden their views on the attribution of economic values of forest functions and their relevance for developing a financing strategy under the NFP; and
  • agree a plan of action to initiate the elaboration of the financing strategy with involvement of relevant stakeholders.

The objectives of the three parts of the module are given below with more information available through the "The NFP for all" initiative. The "NFPs for all" site and the capacity development module itself were developed by FAO, the NFP Facility and the Wageningen UR International. More information on the FAO and NFP Facility support to the development of National Forest Financing Strategies is available here.

For further information, please contact FAO Forestry Officer Marco Boscolo - email:; telephone: +39 (0) 65705442.


Part 1: Visioning a financial strategy for SFM

In this first section, participants familiarize themselves with the required elements of the financial strategy and are introduced to the financial mechanisms model. By the end of the session participants should have:

  • familiarity with the workshop participants' stakes and interests in financing SFM;
  • understanding of the role of a financing strategy for SFM as part of the country's NFP;
  • shared understanding of the analytical model on financing mechanisms;
  • shared understanding of investment instruments and their potential roles for improving SFM in the country.

Part 2: Country experience with financial mechanisms and enabling environment

The second part of the workshop focusses on the appraisal of existing financing mechanisms by applying the conceptual model in the country context. The analysis of responses from the questionnaire will provide a first impression on existing knowledge and experiences among the participants. The workshop enables participants to make use of their experience but is equally suitable in cases where participants are relatively new to the idea of financing mechanisms. Facilitators should decide where to make use of participants’ case experiences.

The enabling environment for financial mechanisms is closely related to the institutional context in the country. This includes, for example, a conducive legal framework, appropriate technology and capacities, and supportive power structures. Institutions or “rules of the game” can assist in building trust among stakeholders, without which they would not be willing to deal with each other. Issues such as contractual arrangements, legal enforcement and conflict resolution mechanisms are examples.

By the end of the session participants should be able to:

  • appraise and compare the existing financial mechanisms in the country;
  • find information on case studies and resources on innovative mechanisms and experiences gained with their use and introduction;
  • characterize the enabling environment for development of a strategy for financing SFM.

Part 3: Strategy development

By the end of this session participants should have:

  • broad understanding of enabling factors for SFM;
  • shared understanding of some of the priority areas for action in developing an enabling environment;
  • agreed on the necessary steps to be taken for developing a country financing strategy for SFM;
  • clarity on the follow-up steps to be undertaken and the agreed roles among stakeholders.  
last updated:  Tuesday, August 7, 2012