Tropical Forest Conservation Act

What is the TFCA?

The Tropical Forest Conservation Act (TFCA) was enacted in 1998 to offer eligible developing countries options to relieve certain official debt owed the U.S. while at the same time generating funds to support local tropical forest conservation activities. TFCA is implemented through bilateral agreements with eligible countries. Six countries currently have TFCA agreements: Bangladesh, Belize, El Salvador, Panama, Peru, and the Philippines. These deals will generate over $60 million for tropical forest conservation in these countries over the life of the agreements. A number of other countries have qualified for or expressed interest in the TFCA.

Eligibility Criteria

TFCA is based on the same principles as the successful Enterprise for the Americas Initiative (EAI) established by former President Bush in 1991 to relieve the debt burden of Latin American countries that moved to open investment regimes. To be eligible for TFCA, developing countries must have a tropical forest of global or regional significance and meet certain political and economic criteria established in the law. Specifically, they must have democratically elected governments, cooperate on international narcotics control measures, and have a suitable economic reform program in place. They must not support international terrorism or violate human rights.

Eligible Activities

A TFCA agreement can be structured as a debt reduction, a debt buyback, or a debt-for-nature swap. Local currency funds generated by a TFCA agreement may be used for a broad variety of in-country forest conservation activities identified in the Act. These include forest restoration, implementation of sound natural resource management systems, establishment and maintenance of parks and protected areas, training in conservation management, protection of animal and plant species, research on medicinal uses of tropical forest plants, and development and support of the livelihoods of people and local communities in or near a tropical forest.

Unique Public-Private Partnership

In addition to forest conservation and debt relief, TFCA is intended to strengthen civil society by creating local foundations to support small grants to non-governmental organizations (NGOs) and local communities. The program also offers a unique opportunity for public-private partnerships. Three of the agreements to date have included funds raised by U.S.-based NGOs in addition to appropriated debt reduction funds. The Nature Conservancy (TNC) contributed about $1 million to the Belize agreement, which set aside 23,000 acres of new forest preserves and provides support for local NGOs managing 270,000 acres of national reserves. TNC, the World Wildlife Fund, and Conservation International together contributed about $1.1 million to the Peru agreement, which has already generated $200,000 in grants for training and capacity building to manage two protected areas. TNC contributed about $1.2 million to the June 2003 TFCA agreement with Panama, to help preserve the Chagres River Basin, a high biodiversity tropical forest that is also the major source of water for the Panama Canal.

Current Participating Countries

Botswana (10/2006)
Guatemala (10/2006)
Paraguay (6/2006)
Columbia (4/2004)
Panama (9/2004)
Peru (6/2006)

TFCA Secretariat (USAID)