TFFF to receive €127 million from Germany in 2027
German government passes draft budget with appropriations for the rainforest fund
The German government intends to make a first payment of €126.6 million ($145m) to the TFFF in 2027. Eight further tranches are planned for the following years, each ranging from €68 million to €133.4 million ($78m–$153m).
Once the ninth and final payment is made in 2035, Germany will have invested the full €1 billion ($1.15bn) it pledged to the TFFF at COP30.
The planned appropriations for the TFFF are a part of the 2027 draft budget for the country’s Climate and Transformation Fund, or KTF. On July 15th, Chancellor Friedrich Merz’s cabinet approved that budget, though it’s not yet final.
The Bundestag, Germany’s parliament, is expected to vote on the KTF budget, alongside Germany’s main budget, by late November. Until then, parliament could still make changes.
The KTF is a special fund made up of an additional ~€40 billion outside of Germany’s main €555 billion federal budget, and it is explicitly tasked with financing climate programs. Even though the law establishing the KTF allows the funds to be spent internationally, only 2% will be spent outside of Germany. The planned budget calls for that rate to decline further until 2030. The TFFF will be a rare international program.
The KTF was first set up in 2010 and is mostly funded by revenue from the EU ETS and the German BEHG, two systems that set limits of carbon emissions and let companies buy and trade pollution permits. Last year, the government coalition bolstered the KTF with an additional debt-financed €100 billion over the next ten years, in exchange for Green Party votes to increase military and infrastructure spending.
Independent of the provisions for the TFFF, the 2027 draft has already faced criticism for plans to redirect 7% of the KTF’s funds from climate programs to the Government’s core budget.
While TFFF commitments from other countries will come as long term concessional loans, Germany’s contribution is in the form of grants. The grant reduces the loss risk for other investors and allows a higher leverage of payouts to rainforest countries from the invested funds. Norwegian TFFF leadership has suggested that grants could count differently than loans toward the €10 billion target by the end of 2026 since they won’t need to be paid back, but they have not made any official statements on how this counting would work.
In addition to these contributions intended for the TFFF’s investments, Germany has also provided €20 million to the TFFF to cover operational costs.
The Green Party called on the German government to increase its total investment to €2 billion. A group of German NGOs – including Plant-for-the-Planet – have asked Germany to match Norway in providing $3 billion, by providing loans in addition to the pledged grant.