Central America covers only 0.5% of the Earth’s surface, but it is home to approximately 8% of the world’s biodiversity. Additionally, it is highly vulnerable to the effects of climate change and natural disasters. The high population growth in the region, combined with poverty and weak political structures, exerts high pressure on natural resources leading to high deforestation rates. Given the mountainous terrain and distinct coast lines, the sustainable management of forests, including mangroves, is a core element in enhancing the countries’ resilience to climate change and natural disasters. The importance of sustainable management of forests and trees is reaffirmed in the Nationally Determined Contributions (NDCs) to the Paris Agreement of all Central American countries that identified forestry as a key sector. The Central American Commission on Environment and Development (CCAD), which is part of the Central American Integration System (SICA), and its member ministries developed a Regional Strategic Policy Framework for Environment and Climate Change, which established restoration as a political priority in the region as a nature-based solution to climate change (Ecosystem-based Adaptation, EbA). Correspondingly, Central American Governments are strong supporters of the Bonn Challenge, the international flagship initiative for forest and landscape restoration, and are committed to restore nearly 9 Mio hectares of degraded landscapes.
Recently, CCAD, with funding from the European Union and the Federal Ministry of the Environment, Nature Conservation and Nuclear Safety of the Federal Republic of Germany (BMU) introduced the investment mechanism of the Green Development Fund for SICA countries.
This “white paper” for the session at the GLF Investment Case 2019 in Luxembourg. Implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), the Fund’s local investment component provides a blended finance mechanism (public-private) for ecosystem restoration projects in prioritized landscapes as designated by each country.