The private-public initiative was jointly launched by the finance ministry, development and infrastructure ministry, the BCEE, BIL and Foyer to provide financial support to businesses, communities and small farmers managing secondary and degraded forests in Central America.

According to a government press release published on 20 October, the fund supports only models of sustainable forest management in a bid to fight against deforestation and promote new growth of forests.

The launch comes after the Paris climate agreement set the goal of limiting temperature increases to below 2°C. Countries now face the challenge of reducing greenhouse gas emissions by adapting energy production methods and mobility, among other things. Deforestation accounts for about 15% of annual greenhouse gas emissions, which is why forestry management will be an essential tool for mitigating climate change.

Luxembourg environment minister Carole Dieschbourg said at the launch: “The forest and climate fund is…an exemplary combination of sustainable land and forest management, while creating opportunities for economic, ecological and social development in Central America, including Costa Rica, Guatemala and Nicaragua. This allows the implementation of the objectives of the Paris Agreement on Climate as well as the 2030 Agenda for Sustainable Development in these countries.”