The International Tropical Timber Organization (ITTO) has underscored the urgent need to scale up forest finance across the Asia–Pacific region. The message was delivered during the Asia–Pacific Regional Workshop on Forest Financing, hosted by the UN Forum on Forests (UNFF) from 20 to 23 January 2026 in Bangkok, Thailand.
The workshop brought together government representatives from across the region. Multilateral institutions were present. Development banks participated. Private sector actors also joined the discussions.
Representatives attended from the World Bank, Green Climate Fund, Global Environment Facility, Asian Development Bank, FAO, UNEP, IUCN, the Forest Carbon Leadership Programme and BIOFIN. The objective was clear. Access to forest finance must be strengthened.
Addressing Gaps in Climate Finance for Forests
During the opening session, ITTO Executive Director Sheam Satkuru highlighted the widening gap between climate ambition and funding allocation for forests. Forests contribute significantly to mitigation and adaptation. They support biodiversity. They sustain livelihoods. Yet climate finance directed to forests remains comparatively limited.
“Forest finance must work for people, nature and climate at the same time,” Ms Satkuru stated.
She expressed concern that forest-related funding has been constrained by fragmented international policy frameworks. Over the past three decades, the number of actors engaged in forest issues has increased considerably. Coordination has not always kept pace. In some cases, duplication of effort has been observed. Financing streams have been dispersed rather than consolidated.
As a result, efficiency gains have been difficult to achieve. Greater alignment is needed. Partnerships must be reinforced.
Approximately 10% of global climate finance is estimated to be channelled towards forest-related initiatives, despite the sector’s cross-cutting environmental and economic value. More coherent mechanisms were said to be required.
ITTO’s Model for Leveraging Finance
On the second day, Ms Satkuru and ITTO Director of Forest Management Jennifer Conje presented a session titled “Leveraging forest finance for impact”. The organisation’s integrated approach was outlined.
ITTO combines policy guidance, field implementation, statistical data and capacity building. The aim is to catalyse sustainable forest management while mobilising additional capital flows.
Small investments can unlock larger funding. Impact can be scaled.
Several country-level case studies were presented to demonstrate how targeted forest finance can generate both environmental and socio-economic benefits.
Indonesia: Blending International and Domestic Finance
In Indonesia, an ITTO-supported initiative strengthened management planning for the legal and sustainable harvesting of non-timber forest products (NTFPs). Community-based small enterprises were supported. Local capacity was improved.
Income opportunities were expanded. Pressure on nearby protected areas was reduced.
Following the project’s implementation, the national government built on the outcomes. Investments were made to enhance the capacity of local authorities to issue harvesting permits. Business incubation support was introduced. Grants were provided to universities to develop workshops and training materials.
The Central Bank of Indonesia also introduced low-interest loan facilities for community cooperatives.
“This case study showed the importance of how domestic public and private financing can build on an investment made by international public finance,” Ms Conje noted. An enabling environment was created. Communities were empowered to generate sustainable income streams.
Cambodia: Microcredit Supporting Forest Protection
Participants were also shown a video highlighting an ITTO-backed microcredit scheme in Cambodia. The programme provides low-interest loans for forest-friendly livelihood activities.
Revenue generated from these enterprises supports community monitoring systems. Forest protection activities are financed locally. The approach links income generation directly with conservation outcomes.
The scheme was designed to ensure that economic incentives align with sustainable forest management principles. Local ownership was strengthened.
Market Access for Smallholder Timber Producers
Another example focused on smallholder teak and high-value timber producers. Access to markets remains a persistent barrier for many small-scale operators in the Asia-Pacific forestry sector.
ITTO’s initiative seeks to improve primary processing capacity and explore innovative financing tools. One approach involves using standing trees as collateral. This allows smallholders to meet short-term liquidity needs without prematurely harvesting their timber resources.
Harvest cycles can therefore be extended. Climate-positive outcomes are supported. Investment models become more scalable.
Barriers to finance were reduced. Market integration was enhanced.
Partnerships and Catalytic Investment
Collaboration was emphasised as a critical enabler of impact. ITTO has partnered with FAO on a joint policy brief promoting compensation mechanisms for forest stewards under payment for ecosystem services schemes. An expert workshop was organised to inform a World Bank publication examining fiscal reforms to support forest conservation.
A new initiative with the Asian Forest Cooperation Organization (AFoCO) is also advancing community-based timber enterprises and nature-based climate solutions.
ITTO projects have frequently played a catalytic role. In several countries, relatively modest investments—sometimes below USD 1.2 million—have unlocked substantially larger follow-on financing from the Global Environment Facility, development banks, national governments and private sector partners.
Targeted funding was deployed strategically. Larger capital flows were subsequently mobilised.
According to Ms Satkuru, ITTO’s core function is to translate policy ambition into practical, bankable action. By supporting member countries with focused investments and technical guidance, long-term financial sustainability can be strengthened.
For the Asia-Pacific forestry sector, the message from Bangkok was clear. Forest finance must be scaled. Coordination must improve. Catalytic investment can deliver measurable results for climate resilience, biodiversity protection and forest-dependent communities.
Read more news on Forestry
Stay updated, follow us on Linkedin.
