Solutions for Mobilising Financial Sources and Enhancing the Financial Framework for Investments on Deforestation-Free Value Chains

GIZ SAFE, the first official EUDR-support programme jointly financed by the European Union, Directorate General International Partnerships, the German Federal Ministry for Economic Cooperation and Development (BMZ), and Climate & Company join forces in several workstreams relating to deforestation-free supply chains and the successful implementation of the EUDR. Through this partnership, we aim to identify and foster solutions to mobilise financial sources, especially for vulnerable groups, and enhance gender-transformative financial frameworks for investments in deforestation-free supply chains.  

The scope of the SAFE project extends to 6 partner countries, namely: Brazil, Ecuador, Indonesia, Zambia, Vietnam and the Republic Democratic of Congo. 

To comply with the EUDR, verifiable deforestation-free supply chains need to be feasible for all actors along the supply chains. Financial institutions and private and public financial mechanisms can provide the right incentives for the different actors along the supply chain to implement verifiable deforestation-free supply chains and then comply with the EUDR. Public and private financial sources should be channelled towards sustainable investments and feasible solutions should be provided to smallholders, local communities, and SMEs, to support this transition. The investments needed, the gaps faced in the context of transformation, and “upgrading” of supply chains should be investigated to identify effective solutions and support the development of new business ideas for local actors.  

• Output 1: Series of explanatory finance briefings and further capacity building presentations 
  • Series of explanatory “Finance briefings” on different financial instruments that could be fostered by different stakeholders of SAFE partner countries to promote the shifting and allocation of funds to support smallholder farmers and vulnerable groups in the transition to deforestation-free supply chains.
  • Expert participation and contributions to support disseminating key information on finance for smallholders and the implementation of the EUDR.
  • Facilitate capacity building among the SAFE country teams on sustainable finance to support smallholder farmers in the transition to deforestation-free supply chains.
• Output 2: Comprehensive and accessible mapping
  • Creating a database on the different financial solutions and analysis of these that aim to contribute to shifting towards/allocating financial resources for deforestation-free supply chains.
• Output 3: Building blocks as a core analytical recommendation framework for smallholder oriented financial mechanisms:
  • Identification of the main drivers of successful financial products for smallholder farmers.
• Output 4: Broader outreach activities of C&C in different contexts
  • Facilitate dialogues in selected SAFE partner countries on relevant topics in the context of this collaboration
  • Organize and attend high-level events where key messages can be disseminated.