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Payments for Ecosystem Services (PES) have emerged as a strategic tool for environmental conservation and for strengthening the livelihoods of Indigenous Peoples, Local Communities and Afro-Descendants (IPLC). In this context, Community Funds are a key ally. These funds are financial mechanisms created and managed by territorially based social movements, such as IPLCs, to strengthen their autonomy and access to finance.

The project promotes initiatives connecting PES and Community Funds in Brazil. These initiatives have involved the Brazilian Ministries of Finance (MF), Racial Equality (MIR), Indigenous Peoples (MPI), and Environment and Climate Change (MMA). This coordination is taking place in the context of the National Policy on Payments for Ecosystem Services (PNPSA) regulation. The initiative aims to unlock climate finance for IPLCs in the Amazon through PES to strengthen Just Transition Financing.

This initiative is implemented in the context of FiBraS II, in coordination with the project Action for Forests (A4F), both forming part of the Brazilian-German Cooperation for Sustainable Development.

• Indigenous Peoples, Local Communities and Afro-Descendants (IPLC)
• Community Funds

The initiative officially began in December 2024 with the signing of a Memorandum of Understanding between GIZ and two community funds in the Amazon: the Podáali Indigenous Fund and the Puxirum Extractive Fund. Between March and April 2025, diagnostic workshops were held for these two organisations. In July, a workshop was held in Brasília to publicise the consultation on the PNPSA regulation. This resulted in the Community Funds submitting contributions to the public consultation. Over the following months, documents were drafted collectively, outlining strategies for each organisation to raise and disburse funds through PES. To further develop and implement the prioritised strategies, a multi-stakeholder innovation workshop was held in Manaus in October, to which the Territorial Funds invited government, civil society, international organisation and development bank representatives. The ideas developed in the workshop are being organised to further strengthen the Community Funds and integrate them into discussions surrounding the regulation of the PNPSA.