Forest Investment Program

Forest Investment Program

Summary

The Forest Investment Program (FIP) is a targeted programme of the Strategic Climate Fund (SCF) within the Climate Investment Funds (CIF) hosted by the World Bank. The FIP supports developing countries’ efforts to reduce deforestation and forest degradation (REDD+) and promotes sustainable forest management that leads to emission reductions and the protection of carbon reservoirs. It works towards this goal by providing scaled-up financing to developing countries for readiness reforms and public and private investments, identified through national REDD+ readiness or equivalent strategies. The FIP is active in 23 countries.

Basic Description

Name of the Fund Forest Investment Program (FIP)
Official Fund Website https://www.climateinvestmentfunds.org/topics/sustainable-forests
Date Created
Date fund proposed: February 2008.
Date fund made operational: July 2009.
Proposed Life of Fund The FIP was subject to the CIF’ ‘sunset clause,’ which was designed to phase out the CIF once a new financial architecture under the UNFCCC became effective. However, in June 2019, the CIF governing board decided to indefinitely postpone the implementation of this ‘sunset clause.’ As of now, the donors and recipients continue to operate under the existing framework.
Objectives The FIP supports developing countries in their efforts to reduce emissions from deforestation and forest degradation (REDD+), and promotes sustainable forest management. The FIP pursues four main objectives:

  • Initiating and facilitating transformational change in forest-related policies, governance, and land use practices
  • Mobilising and leveraging additional financial resources for REDD+ and forest investments, including through synergies with UNFCCC-recognised mechanisms
  • Piloting replicable models that generate knowledge on the links between forest investments, long-term emissions reductions, and forest carbon stock enhancement
  • Contributing experience and lessons to inform global REDD+ efforts and UNFCCC deliberations.

As of the latest CIF reporting, the FIP portfolio is expected to contribute to the improved management of over 31 million hectares of forest landscapes, reduce approximately 28.7 million tons of CO₂ equivalent (tCO₂e), and deliver livelihood co-benefits to about 1.5 million people in participating countries.
Financial inputs and fund size Contributions to the FIP total approximately USD 750 million. The contributors include Australia, Denmark, Japan, Netherlands, Norway, Spain, Sweden, Switzerland, United Kingdom and the United States.
Contributions to the CIF, including the FIP, can be classified as Official Development Assistance (ODA) by contributing countries, provided they meet standard OECD-DAC criteria. These include:

CIF funds are implemented through Multilateral Development Banks (MDBs), which structure financing instruments — such as grants and concessional loans — to align with these eligibility conditions, enabling donors to report contributions as ODA where appropriate.
Activities Supported The FIP is currently active in 23 countries; these are Bangladesh, Brazil, Burkina Faso, Cambodia, Cameroon, Congo Republic, Cote d’Ivoire, Democratic Republic of Congo, Ecuador, Ghana, Guatemala, Guyana, Honduras, Indonesia, Lao People’s Democratic Republic, Mexico, Mozambique, Nepal, Peru, Rwanda, Tunisia, Uganda, and Zambia.
The activities supported by the FIP include:

  • Investments that build institutional capacity, forest governance and information
  • Investments in forest mitigation efforts, including forest ecosystem services
  • Investments outside the forest sector necessary to reduce the pressure on forests such as alternative livelihood and poverty reduction opportunities.

FIP investments also mainstream climate resilience considerations and contribute to multiple co-benefits such as biodiversity conservation, protection of the rights of Indigenous Peoples and local communities, and poverty reduction through rural livelihoods enhancements.

Administrating Organization

Secretariat or Administrative Unit The CIF Administrative Unit supports the work of the SCF Trust Fund Committee and other committees, including the FIP Sub-Committee. It provides recommendations and reporting on operational and financial matters to the CIF governing bodies.

The Unit is housed in the World Bank Group’s Washington, DC offices and is comprised of a small professional and administrative staff.
Trustee The World Bank (International Bank for Reconstruction and Development) acts as Trustee for all Climate Investment Funds, including the FIP.

Fund Finance and Access Modalities

Conditions and Eligibility Requirements FIP is available to middle-income and developing countries.
To access FIP resources, countries must meet the following conditions:

  • Be ODA-eligible, as defined by OECD-DAC
  • Have an active country programme with a participating MDB
  • Show potential for significant greenhouse gas emissions reduction
  • Demonstrate government commitment to low-carbon development pathways
Accessing the Fund
Access Modalities – Access to FIP funding is exclusively facilitated through MDBs acting as implementing partners — namely, the World Bank Group, Inter-American Development Bank (IDB), African Development Bank (AfDB), European Bank for Reconstruction and Development (EBRD), and Asian Development Bank (ADB). Countries do not receive direct financial transfers; rather, MDBs design and implement projects in partnership with national governments.
Eligibility for FIP funding is established through a structured, multi-stage process involving country selection, investment planning, and project preparation. While no new country selection processes are currently active, the general framework follows this sequence:Pre-Programming Phase

  • The FIP Technical Committee determines the number of country or regional pilots and establishes selection criteria
  • Countries are invited (via MDBs) to submit expressions of interest, typically led by national governments
  • An independent Expert Group evaluates submissions and recommends countries based on criteria such as: the alignment with FIP objectives, the REDD+ readiness and institutional capacity, the potential for emissions reduction at scale
  • Selected countries confirm their interest and appoint a focal point and a national multi-stakeholder steering committee.

Programming Phase

  • A joint MDB-country mission is conducted to assist in the development of a national Investment Plan
  • The Investment Plan is reviewed and must be endorsed by the FIP Technical Committee
  • Following endorsement, specific project and programme concepts are developed and refined
  • The FIP Technical Committee approves funding allocations, and MDBs proceed with project preparation and internal approval processes according to their own operational policies.

All projects must demonstrate a strong alignment with FIP’s transformational objectives, go beyond business-as-usual interventions, and deliver measurable climate and development benefits.
Financial Instruments – The FIP can offer grants, concessional loans, guarantees, or equity as detailed in its Investment Criteria and Financing Modalities. The FIP Sub-Committee decides which type of financing is suitable for a specific project or programme; it either approves the proposed financing modality (grant or concessional loan) or approves a range of proposed financing modalities (grant, concessional loan, guarantee and/or equity).
Accreditation process – There is no accreditation process for the CIF as only the MDBs can access and implement CIF funding, including for the FIP.
Overview of implementing entities – The World Bank Group, the African Development Bank, the Asian Development Bank, the European Development Bank, and the Inter-American Development Bank are the implementing agencies for FIP investments.
Nature of recipient country involvement – FIP programmes are country-led and country–owned, by building on, enhancing and strengthening existing nationally prioritised REDD efforts, and respect national sovereignty.
Allocation criteria – The maximum total FIP preparation grant allocation for an investment strategy is USD 250,000. There is however no maximum allocation for a project preparation grant.

There does not seem to be a financing cap for a single FIP project, although most are in the range of up to USD 10 million.
Safeguards, Gender and Indigenous Peoples
Safeguards – One of the FIP’s investment screening criteria outlined in the design document of the FIP is the safeguarding of natural forests and the prevention of support for industrial logging, conversion of natural forests to tree plantations or other large-scale agricultural conversion. Guidance on safeguards is mostly related to the inclusion of relevant stakeholders in the development of country level FIP investment strategies, as well as to the transparency of the process and the need to make available all documents related to proposed programmes/projects for public review and comment. The safeguards included at the project level under the FIP depend on the partner MDB implementing the project.
Gender – FIP falls under the CIF Gender Policy and the CIF Gender Action Plan. While the Gender Policy provides a governance framework for gender integration in the CIF, the Action Plan is “committed to mainstreaming gender in CIF policy and programming, in support of gender equality in climate resilient, low-carbon development investment across the CIF portfolio”. The CIF Gender Action Plan is currently in Phase 3 and has two main aims:

  1. to deepen upstream support to MDBs and countries on gender technical assistance for Investment Plan and project design,
  2. to enhance gender monitoring and reporting, and knowledge and capacity.
Indigenous Peoples – FIP is subject to CIF governance which treats Indigenous Peoples as a core stakeholder group. While there is a separate CIF Gender Policy, there is no equivalent CIF Indigenous Peoples Policy. Instead, the existing policies and approaches of the MDBs implementing FIP projects and programmes apply.
Indigenous Peoples are granted representation in CIF governance as active observers. This status gives Indigenous Peoples have the opportunity to advocate on behalf of their constituents in the CIF Trust Fund Committees and the FIP Technical Committee.
The USD 80 million Dedicated Grant Mechanism for Indigenous Peoples and Local Communities (DGM), under the FIP, supports the active participation of Indigenous Peoples and local communities (IPLCs) in national REDD+ and FIP processes. Governed by IPLC-led steering committees at global and national levels, the DGM funds locally prioritised projects across 14 countries, along with a global knowledge-sharing platform.
Recognised as the largest REDD+ initiative designed specifically for and governed by IPLCs, the DGM is widely cited as a model for devolving climate finance and improving direct access for marginalised and forest-dependent communities.

Fund Governance

Decision Making Structure The FIP is part of the governance arrangements for the SCF, which includes a SCF Trust Fund Committee, a FIP Sub-Committee, and an MDB Committee.

SCF Trust Fund Committee
The SCF Trust Fund Committee is in charge of overseeing the operations and activities of the SCF, which includes the FIP. It gives equal weight to representatives from donor and recipient countries. The composition of the SCF Trust Fund Committee consists of representatives from:

  • Eight recipient countries
  • Eight contributor countries
  • Select observers, namely one each from Green Climate Fund (GCF), Global Environment Facility (GEF), United Nations Development Programme (UNDP), United Nations Environment Programme (UNEP), United Nations Framework Convention on Climate Change (UNFCCC), United Nations Permanent Forum on Indigenous Issues (UNPFII)
  • In addition, there are active observers with the right to intervene in SCF Trust Fund Committee meetings, namely four from civil society organisations, two from the private sector, and two from Indigenous Peoples.

The list of actual SCF Trust Fund Committee members is available at: https://www.cif.org/strategic-climate-fund-governance-structure FIP Sub-Committee (FIP-SC) FIP Sub-Committee is established by the SCF Trust Fund Committee to oversee and decide on the operations and activities of the FIP.

The FIP Sub-Committee is composed of:

  • Up to six representatives from donor countries to the FIP
  • Six representatives from eligible recipient countries, selected through consultation with the recipient countries
  • Select observers, including from the GEF, the Adaptation Fund, United Nations Development Programme (UNDP), the United Nations Environment Programme (UNEP) and the UNFCCC
  • In addition, there are active observers with the right to intervene in FIP Technical Fund Committee meetings, namely four from civil society Organisations, two from the private sector, and two from Indigenous Peoples.

Decisions are made by consensus. Members of the FIP Technical Committee serve for one-year terms, and may be reappointed.
The list of actual FIP Sub-Committee members is available at:

MDB Committee
The MDB Committee facilitates collaboration, coordination and the exchange of information, knowledge, and experience among MDB partners.
The list of MDB focal points is available at: https://www.cif.org/forest-investment-program-technical-committee

Accountability Mechanisms FIP The original FIP Results Framework, adopted in May 2011, provided a foundational structure for monitoring and evaluating the outcomes and impacts of FIP-funded activities. While it did not define core indicators, it included a broad menu of illustrative indicators to guide pilot countries and MDBs in integrating FIP-relevant results into their own M&E systems.

In 2018, the framework was formally revised through the adoption of a revised Monitoring and Reporting Toolkit. The FIP monitoring and reporting system (M&R) is “structured to enable annual tracking and reporting on the progress of FIP investments at multiple levels – from project to country to global programme”. The system rests on the foundation of the FIP results framework, which serves as “a basis for monitoring and evaluating the impact, outcomes, and outputs of FIP-funded activities”. It incorporates four categories of reporting themes reflecting the expected transformation process-taking place in FIP countries:

  • reducing greenhouse gas emissions from deforestation and forest degradation
  • enhancing institutional capacity
  • improving land tenure and
  • reducing biodiversity loss.

CIF
The CIF have initiated and published dozens of independent evaluations, many focused on transformational change, gender, stakeholder engagement, and private sector mobilisation:
Participation of Observers and Stakeholders In designing the CIFs, consultations took place with potential donors and recipients, the United Nations family, other MDBs, civil society organisations, and the private sector. The CIFs were created on agreement from some 40 developing and industrialised countries.

Regional consultative meetings with Indigenous Peoples and local communities from FIP pilot country regions were held between November 2010 and April 2011. These consultations contributed to the design of the FIP and the DGM, ensuring strong IPLC representation in FIP governance.

The FIP Technical Committee includes active observers from a range of stakeholder groups: four civil society representatives (from Africa, Asia, Latin America, and developing countries), two private sector representatives (one each from a developed and developing country), and two Indigenous Peoples representatives, and technical observers, including from the, GEF and UNFCCC. While active observers and technical observers do not vote, they actively participate in discussions and thus can influence decision-making processes.

In addition, biennial stakeholder scoring workshops bring together state and non-state actors to assess FIP project performance and stakeholder engagement. These workshops contribute qualitative insights into the effectiveness and inclusiveness of FIP-funded activities.

Partnership Forum
The CIF Partnership Forum is a key convening platform that enables dialogue on the CIF’s strategic directions, results, and impacts. While historically held on an annual basis, recent editions (e.g. 2018 and 2023) reflect a non-fixed frequency.
Forum participants include a diverse range of stakeholders: donor and recipient country representatives, MDBs, UN agencies, the Global Environment Facility (GEF), the Green Climate Fund (GCF), the UNFCCC, the Adaptation Fund, bilateral development partners, Indigenous Peoples, civil society, private sector entities, youth, and technical experts.
The Forum promotes inclusive, multi-stakeholder engagement through plenary dialogues, thematic panels, and networking opportunities, and serves as a platform for shared learning and reflection on CIF’s impact in climate finance.
Transparency and Information Disclosure Pledges, deposits and funding decisions for SCF and its subsidiary funds (PPCR, SREP and FIP) are reported to the SCF Trust Fund Committee in bi-annual trustee reports. Details on individual projects are made public and available at: https://www.climateinvestmentfunds.org/projects

Disclosure Policy
With respect to information disclosure, the CIF largely rely on the public information polices of the partner MDBs which implement CIF projects and programmes. In addition, in May 2009, the Trust Fund Committees approved a disclosure policy supporting in-country disclosure of country-owned investment plans and strategies (developed under the Trust Funds) prior to their submission to a CIF Committee for approval.
Proposed plans are also posted on the CIF website no later than three weeks prior to review of the proposal by a Committee. In the case of proposed programmes and projects, an information document describing the proposal is to be made public at least two weeks prior to a decision on the funding of the proposal.
The policy recognises that a country or a project proposer may have justifiable reasons for not publicly disclosing all information in an investment plan or project, and in exceptional cases, subject to Committee approval, certain information may be kept confidential.
Other Issues Raised During FIP’s early implementation phase, civil society and private sector observers raised concerns about the country selection criteria, noting that they were largely technical and did not adequately account for governance quality or absorptive capacity. Organisations such as the Rainforest Foundation and Forest Peoples Programme also questioned whether some FIP investments reflected ‘business-as-usual’ forest sector lending, particularly in relation to industrial-scale logging and plantation forestry.
While FIP’s operational guidelines were revised to reference the UN Declaration on the Rights of Indigenous Peoples (UNDRIP), formal criteria to ensure compliance with UNDRIP or require Free, Prior and Informed Consent (FPIC) across all projects have not been uniformly adopted. CIF relies on the safeguards of implementing MDBs, which vary in scope and enforcement.
Civil society organisations, including Global Witness and the Forest Peoples Programme, have pointed to inconsistencies in safeguards and stakeholder engagement, particularly in the preparation of investment plans. CIF has taken steps to address some of these concerns—such as through the DGM, stronger gender and inclusion guidance, and revised stakeholder engagement procedures—but many of the foundational critiques remain part of ongoing discussions on climate finance accountability and equity.