Latin America, Leading the Way in Innovative Nature Finance

Extreme weather events threaten food security, water availability, public health, infrastructure, and economic opportunities for millions of people. In 2024 (then the hottest year ever recorded, a record since surpassed in 2026) the World Meteorological Organization (WMO) reported more than 150 climate-related disasters that displaced over 800,000 people. In the Amazon, a historic drought pushed the Negro River in Manaus to one of its lowest levels in more than a century, disrupting access to water, food, education, and healthcare services across several Amazon Basin countries.

The economic costs are equally significant. According to Swiss Re, losses associated with natural disasters reached US$145 billion in 2025, an amount roughly equivalent to Colombia’s annual national budget. Yet behind these figures are communities and families bearing the heaviest consequences.

Climate finance has expanded substantially over the past decade, but the funding gap remains enormous. According to the Climate Policy Initiative, annual investments of US$7.4 trillion will be needed by 2030 to address climate change, biodiversity loss, and ecosystem degradation. While the scale of the challenge is immense, so is the opportunity to transform economic systems toward greater sustainability and resilience.

Latin America needs mechanisms capable of directing public, private, and philanthropic capital toward solutions that generate environmental, social, and economic benefits. That is why TNC works with governments, local communities, financial institutions, and other partners to design models that connect conservation and sustainable development.

The challenge now is scaling these solutions while ensuring integrity, measurable outcomes, and strong institutions capable of sustaining them over the long term.

Brazil: A Laboratory for Financial Innovation

The idea that conservation and development are opposing forces is a false dilemma. When conservation creates tangible benefits and improves productivity for communities, governments, and businesses, protecting ecosystems is no longer viewed as a cost but as an investment in resilience, economic prosperity, and sustainable development.

Brazil offers a compelling example. In recent years, the country has emerged as a global laboratory for innovative nature finance, pioneering solutions that connect financial markets, public policy, and private-sector commitments to forest conservation.

Among the most important initiatives supported by TNC are the concessions of public lands for forest restoration, a model that combines conservation, responsible management, and revenue generation through the sustainable use of forest resources.

This mechanism enables public forest lands to be managed under rigorous environmental and social standards, creating a viable economic alternative to illegal deforestation while increasing the value of standing forests as productive and sustainable assets. Through this model, TNC partnered with the Government of Pará to restore 10,000 hectares of native vegetation and remove 3.7 million metric tons of CO₂ from the atmosphere. 

Brazil has also played a leading role in developing and promoting international financial mechanisms such as the Tropical Forest Forever Facility (TFFF), which aims to mobilize billions of dollars to reward tropical countries that successfully conserve forests and reduce deforestation.

The TFFF seeks to establish long-term incentives for conservation by recognizing the value of the critical ecosystem services tropical forests provide, including carbon storage, climate regulation, and biodiversity protection. One of its most significant commitments is allocating at least 20% of its resources directly to Indigenous Peoples and local and traditional communities, acknowledging their role as the primary stewards of tropical forests.

At the same time, partnerships such as the Coalition for Climate and Amazon Transformation and the Innovative Finance for the Amazon, Cerrado and Chaco Initiative (IFACC) are mobilizing private and philanthropic investment to accelerate the transition toward deforestation-free supply chains, sustainable agriculture, ecosystem restoration, bioeconomy, and other forest-friendly activities.

Together, these initiatives illustrate Brazil’s growing leadership in developing innovative financial solutions for ecosystem protection. While each mechanism operates differently, they share a common objective: creating economic conditions that reduce pressure on forests, halt deforestation, and generate long-term benefits for people and nature.

Nature Bonds: Refinancing Debt to Protect Nature

Debt-for-nature swaps have emerged as an attractive financing option for countries. Instead of directing scarce resources toward debt repayment alone, governments can secure better financing terms by committing to protect strategic ecosystems and invest in their conservation and management.

The largest deal of its kind was completed in December 2024 through an initiative led by TNC in partnership with the U.S. International Development Finance Corporation, the Inter-American Development Bank (IDB), and Bank of America. Through the agreement, Ecuador refinanced a portion of its debt and unlocked US$460 million for Amazon conservation over the following 17 years. 

The initiative will improve the management of 4.6 million hectares of protected areas, help conserve 18,000 kilometers of rivers, and strengthen livelihoods for Indigenous Peoples and local communities across the Amazon.

Three years earlier, Belize paved the way with one of the first large-scale debt-for-nature swaps. The country repurchased US$553 million of external debt and committed to protecting at least 30% of its territorial waters, which include one of the hemisphere’s most important marine ecosystems. The agreement created a fund expected to mobilize nearly US$180 million over two decades to support ocean conservation and sustainable fisheries. 

Indigenous Peoples and Local Communities are at the Center of Nature Finance

One of the greatest challenges is that the majority of conservation finance still does not reach Indigenous Peoples and traditional communities, even though they steward some of the world's most important carbon stocks and biodiversity-rich landscapes. Today, they receive only around 1% of available funding.

Through funds designed around participation, transparency, and inclusive governance, TNC supports local capacity-building, territorial management, sustainable livelihoods, and community-led initiatives. The goal is to ensure that a greater share of resources reaches the people living in the territories that harbor much of the planet’s biodiversity.

One example is TNC’s support for the Podáali Fund in Brazil, the Amazon’s first Indigenous-led financing mechanism, designed, governed, and managed by Indigenous organizations to channel resources directly toward priorities identified by their communities. TNC is advancing similar direct-finance initiatives in Colombia, Ecuador, Peru, and other countries across the region.