BioCarbon Fund

BioCarbon Fund


The BioCarbon Fund Initiative for Sustainable Forest Landscapes supports developing countries’ efforts to reduce emission through testing jurisdictional approaches that integrate reducing deforestation and degradation, sustainable forest management with the climate smart agricultural practices to green supply chains.

Basic Description

Name of Fund BioCarbon Fund
Official Fund Website
Date Created The BioCarbon Fund concept was first revealed at the Katoomba Group meeting in March 2002, and was approved by the World Bank’s Board of Executive Directors in 2003.  The Fund became operational in 2004.
Proposed Life of Fund
Administrating Organisation The World Bank
Objectives For the ISFL, “The objective is to work alongside private firms that can provide capital, innovation, operational resources as well as technical expertise to accelerate the greening and securing of their supply chains.” Specifically, to:

  • Scale up interventions to jurisdictional landscapes
  • Break down sectoral silos and work across forest, agriculture, and energy sectors
  • Build partnerships with private sector to scale up beyond available public financing
  • Combine results-based payments with dedicated grant funding for technical assistance
Activities Supported Includes environmental restoration, reforestation for fuel wood, REDD+ activities, sustainable agricultural land management, fast-growing tree plantations for timber.
Conditions and Eligibility Requirements For selection of ISFL jurisdictions, a series of high-level quantitative and qualitative indicators across three areas are considered, including REDD readiness, general factors not related specifically to REDD+ or agriculture (such as private sector engagement in the country and potential co-benefits) and agricultural drivers
Accessing the Fund Jurisdictions approved by the BioCarbon Fund will be entered into the funding portfolio.  A project will be proposed by an entity associated with the host country, like a company, NGO, government agency, or international partner through a Project Idea Note.  If the parties decide to continue, then a Project Design Document and an Emissions Reductions Purchase Agreement will be drawn up.

Fund Governance

Decision Making Structure  The World Bank’s Carbon Finance Unit handles the day-to-day operation of the BioCarbon Fund.  The WB’s social and environmental safeguard policies apply to all BioCarbon Fund operations. Local level governance relies on a partnership between BioCarbon Fund contributors and local entities.
Non-Government Stakeholder Participation The World Bank Group’s tools for stakeholder engagement apply to BioCarbon Fund projects.  These tools include World Bank and IFC operational and safeguard policies, Strategic Environmental and Social Assessment, Environmental and Social Management Framework, Operational Policy 4.10 on Indigenous Peoples, and Performance Standard 7.  The BioCarbon Fund declares that it engages stakeholders throughout design and implementation through “studies; consultations; in-country missions and field visits; regular engagement with recipient governments; and steering committees, user groups, secretariats, working groups, and existing platforms.”
Information Disclosure The World Bank Group’s Policy on Disclosure of Information applies.
Issues Raised Broadly speaking, the BioCarbon Fund’s role in selling emissions reductions to offset voluntary emissions reductions has been criticised.The BioCarbon Fund’s experimentation with “avoided deforestation” that assign monetary values to the capacity of standing forests to serve as carbon sinks was criticised by Institute for Policy Studies.

A BioCarbon Fund sponsored reforestation project in Guangxi, China was forced to suspend implementation in 10% of affected communal lands due to tenure and resource disputes.

The BioCarbon Fund “JK Papermill project” has been criticized for putting a financial burden on poor farmers involved in the project, whose financial situations have worsened considerably as they have not been able to repay loans provided to buy seedlings and other supplies needed for the paper plantation.

Relationship with Official Development Assistance

Inclusion as Official Development Assistance  Some projects may involve Official Development Assistance (ODA) resources.  ODA monies cannot be used to purchase [Emissions Reductions].  However, often infrastructure and technical capacity derived from ODA will be crucial in enabling the local proponents to bring the project into being.

ODA funds may be used for project funding needs aside from emissions reductions purchases.

Financial Instrument/ Delivery Mechanism Used (e.g. grant, loan)  BioCFplus provides grant funding and technical assistanceBioCarbon Fund provides results-based payments for achieved emissions reductions
Nature of Recipient Country Involvement Developing countries