- As Brazil approaches a pivotal presidential election, grantees of the Amazon Fund warn that a radical change in administration could derail its recent momentum, which saw annual financing quadruple.
- While the fund helped drive Amazonian deforestation to its lowest level in a decade, experts warn a new disruption would have greater impacts amid the growing climate crisis.
- International donors are already signaling caution, as widespread anxiety reflects the trauma of 2019, when the previous government dismantled Brazil’s environmental frameworks.
In 2018, the Amazon Fund chose to support a project in the Brazilian Amazon helping 614 families engaged in babassu coconut breaking in 11 traditional communities. Encroached on by soy farming and cattle ranching, the families in the state of Tocantins would receive financial support to keep producing oil, flour and handicrafts from this unique Amazonian fruit while reinforcing their role as guardians of the forest.
But the promise was short-lived. Jair Bolsonaro took office as Brazil’s president in January 2019, and immediately set his far-right agenda to work dismantling the country’s environmental frameworks and freezing the Amazon Fund’s contributions.
The fund was created in 2008, with initial donations from Norway and Germany to reward Brazil for its success in reducing Amazonian deforestation. Over the last 18 years, it has benefited 288,000 people and supported 144 projects in forest restoration, sustainable production, firefighting, inspections and monitoring of environmental crimes, and Indigenous issues.
“It is one of the world’s leading funds for investing in projects that protect the rainforest,” said Rayandra Araújo, climate policy specialist at Talanoa, a Brazilian climate think tank.
When Luiz Inácio Lula da Silva replaced Bolsonaro, returning to the presidency in January 2023, he revived the Amazon Fund’s operations. The babassu coconut breaker project, led by the group Alternatives for Small-Scale Farming in Tocantins (APA-TO), was again considered and began implementation in April 2026. “The project was on hold for almost 10 years,” says Selma Yuki Ishii, the project coordinator and technical director at APA-TO.
With Lula, the Amazon Fund quadrupled its annual financing volume, from 300 million reais in 2009-2018 (about $82 million at the 2018 average exchange rate) to 1.3 billion reais in the 2023-2025 cycle ($233 million at the 2025 exchange rate), according to a report by Brazil’s environment ministry and the country’s national development bank, BNDES, which manages the fund. By Dec. 31, 2025, the fund had 6.7 billion reais ($1.2 billion at the exchange rate at the time) available to honor existing projects and support new ones.
The number of endorsed projects also increased by 50%, and the range of donors, previously just Norway and Germany, now includes the U.K., Switzerland, Denmark, the U.S., Ireland, Japan, and the European Union.
In Tocantins, APA-TO received more than 13 million reais ($2.5 million) to benefit communities that rely on babassu coconut products. After decades of struggling with a lack of resources and the expansion of soy and eucalyptus cultivation and cattle ranching over their palm groves, the families will have support to build an agroindustry around their crop and access new markets. The project will also help families grow other Amazonian fruits, such as cajá, açaí, acerola, cupuaçu, cashew, and passion fruit.
APA-TO will manage the money and redistribute it to three local organizations, including two women’s associations. “We are simultaneously strengthening the local economy, women’s empowerment and forest conservation,” Ishii said. “The Amazon Fund enables us to link environmental policy with the everyday lives of the communities responsible for keeping the forest standing.”
But she said she fears the project may be paralyzed again depending on the outcome of the next presidential election, to be held on Oct. 4. So far, polls indicate a tight race between President Lula and Senator Flávio Bolsonaro, the eldest son of Jair, who’s been barred from running after being sentenced to prison for a failed coup attempt following his loss to Lula in the last election.
“It is one of the worst-case scenarios,” Araújo said of a return by the Bolsonaro clan to power.
In 2023 and 2024, the Amazon faced a historic drought aggravated by El Niño, the abnormal warming of the surface waters of the equatorial Pacific Ocean. This year, an even stronger El Niño may fuel the Amazon fire season.
“Today, [a suspension of the Amazon Fund] would have a much more serious impact than it would have had four or eight years ago, because the climate system is under greater stress and there is much less room for maneuver to reverse the trend,” Araújo said.
BNDES acknowledged the risk of discontinuity in the fund’s 2025 annual report, “particularly if the fund’s governance and objectives are changed,” and cited the paralysis under Bolsonaro’s term. In a WhatsApp statement to Mongabay, the development bank said the risk analysis is a routine part of fund management and has no connection to the election calendar. “As for donors, there are no indications so far that new contributions are being postponed because of the elections,” BNDES stated.
The environment ministry didn’t comment on the possible impact of the elections on the Amazon Fund. In a WhatsApp statement to Mongabay, it emphasized the fund’s importance in controlling deforestation and strengthening sustainable development initiatives.
The Amazon Fund isn’t the only financing initiative at stake in the election. According to the Brazilian environmental economics website Capital Reset, at least five countries are expected to wait for the poll’s results before confirming their contributions to the Tropical Forest Forever Facility (TFFF). This financial mechanism, aimed at rewarding countries conserving their tropical forests, was launched by Brazil at the last United Nations climate summit, which it hosted in the Amazonian city of Belém in 2025.
Projects in the Brazilian Amazon had already been affected by funding cuts earlier that year from the U.S. Agency for International Development (USAID), following the inauguration of Donald Trump to a second term as president. According to the Brazilian website ((o))eco, Brazilian environmental initiatives lost 84 million reais ($15 million at last year’s average exchange rate) from USAID.
Fueling a new economy
Brazil created the Amazon Fund to be compensated for its success in slashing the deforestation rate in the Amazon between 2004 and 2012 by 83%. This reduction was achieved largely during Lula’s first two terms in office, thanks to a series of policies that included satellite monitoring and the designation of protected areas. Under Bolsonaro, the deforestation rate spiked, before steadily decreasing again under Lula, reaching their lowest level in a decade in the period from August 2025 to July 2026.
Keeping the deforestation rate low in the long run, however, hinges on offering livelihood alternatives to communities that have historically depended on land grabbing, illegal logging, gold mining, and cattle ranching. “If we don’t have a new economy, we’ll just keep chasing our tails,” said Carlos Koury, director of bioeconomy innovation at Idesam, an institute that works on sustainable practices and innovation in the bioeconomy in the Amazon.
In 2017, Idesam managed an Amazon Fund-backed project called Forest Towns. It received almost 12 million reais (about $3.8 million at the exchange rate at the time) to support oil production and sustainable forest management in river communities in the state of Amazonas.
“We are increasingly seeing an empowered Amazonian hinterland, but we need to work hard on this,” Koury said.
The Mamirauá Institute, based in Tefé municipality in Amazonas state, has just started its second project backed by the Amazon Fund. The Remanso Project will support extractivist families, who depend on sustainably harvested forest and aquatic resources, in the states of Pará and Amazonas. It will cover honey production from native bees, and sustainable management of timber harvesting, caiman hunting, and catches of pirarucu, one of the world’s biggest freshwater fish.
Dávila Corrêa, the Mamirauá Institute’s director of management and social development, said one of the challenges in developing such projects in the Amazon is the high logistical cost. To reach some communities, for example, can take several hours by boat.
“We deal with high operating costs on a daily basis — whether it’s transportation, logistics, communication, or ongoing technical support,” Corrêa said. “The monthly visits to the communities and the work of supporting them require resources that are commensurate with this reality.”
The projects being managed by both APA-TO and the Mamirauá Institute run under a model launched in 2011 by the Amazon Fund. Under this system, an umbrella organization receives the money and distributes it to smaller associations that would otherwise be unable to meet the fund’s eligibility requirements or navigate its bureaucracy.
“Community-based organizations face many difficulties, as well as numerous administrative, legal, and accounting constraints, when it comes to directly accessing large-scale funds such as the Amazon Fund,” Corrêa said.
Following the same strategy, other organizations, such as Fundo Casa Sociambiental, have been working as intermediaries between major donors and small local associations. In 2020, the Coordination of Indigenous Organizations of the Brazilian Amazon (Coiab) created the Podáali, the first Indigenous financing mechanism. The Interstate Movement of Babaçu Coconut Harvesters (MIQCB) has also had its own fund since 2012.
Financing for suitable initiatives is also spread across several other organizations, such as the Climate and Society Institute (iCS), the Brazil Fund, Fundo Ecos, and funds offered by private companies such as miner Vale and state oil and gas company Petrobras as a way of offsetting their environmental impacts.
Few funders, however, offer amounts as large as the Amazon Fund, allowing complex projects to move forward. Before the fund’s support, for example, APA-TO spent nine years securing smaller grants to build a single industry facility for processing babassu coconuts.
“You’ll keep gathering various resources until you’ve built the best possible structure,” said Ishii, the project coordinator. “A significant sum, such as that from the Amazon Fund, goes a long way toward enabling us to take a bigger step forward.”
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Cite this article
Fernanda Wenzel (2026). Amazon Fund grantees fear a new funding freeze after Brazil’s election. Mongabay Conservation news. DOI: https://doi.org/10.66709/news-329406
