Germany and US warn Brazil against using Amazon Fund to pave rainforest road

Western donors to the Amazon Fund have warned against the Brazilian government’s plans to use it to pave a major road in the rainforest.

A spokesperson for the German government, the fund’s second-biggest donor, told Climate Home that support for such a project “is not possible” according to the rules of the fund, which was specifically set up to reduce forest destruction in the Amazon.

The United States is “confident” the fund will use its resources “consistent with its governing regulations”, a US State Department spokesperson told Climate Home.

Environmentalists fear the project would trigger an explosion in forest destruction by giving illegal loggers easier access to remote areas of the rainforest.

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Investment in large-scale infrastructure projects is not listed among the target actions of the 2008 presidential decree that established how the fund should spend its money.

But officials in the Lula administration want to tap the green funds for the paving of the 900-kilometre long BR-319 highway, cutting through the rainforest and connecting Manaus and Porto Velho.

The lower house of the Brazilian Congress voted last December in favour of a bill that would allow for the use of conservation funds to finance public works aimed at “recovering, paving and increasing the capacity” of the road. The bill needs Senate approval before becoming law.

The German government said it “is observing the developments closely”. A spokesperson added that, if the bill was conclusively approved, the German government would affirm to the Amazon Fund’s managers that its resources cannot be used to pave the road.

‘Tremendous consequences’

Research shows every major highway project in the Amazon has set off a surge in land grabbing and illegal deforestation.

Philip Fearnside, a scientist at the National Institute for Amazonian Research in Manaus, told Climate Home “the consequences would be tremendous”.

He added that trees would not only be cleared on the roadside, but the project would create an interconnected network of major roads giving deforesters access to a much larger area.

Built in the 1970s by a military government, the BR-319 was abandoned a decade later due to a lack of maintenance.

Since disintegrated into a dirt road, much of the route is now impassable during the rainy season. Vehicles that attempt it during dry months crawl along the broken pavement.

The Brazilian government has been sketching out plans to restore the highway on economic and social development grounds.

The transport minister, Renan Filho, announced last August that he was planning to pitch the Amazon Fund’s governing board a project to pave the road.

This would turn the road into the world’s “most sustainable highway” and would allow easier access for police patrols to monitor and prevent deforestation, the ministry argued.

But environmentalists argued that this is not the kind of project that the fund is meant to support. One of the fund’s creators, forest scientist Tasso Azevedo said the project “does not fit into any of the fund’s planned support lines”.

Amazon Fund revived

Created in 2008, the Amazon Fund has over $1.2 billion available for projects that prevent, monitor and combat deforestation in the Brazilian Amazon. The fund’s largest donors are Norway, Germany, the US, Switzerland and state-owned oil company Petrobras.

They have promised to inject an extra $800 million into the fund since President Lula revived the mechanism on his first day in office in 2023 after three years of inactivity.

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Western donors had stopped money transfers in 2019, under the previous government of Jair Bolsonaro, after the former president unilaterally suspended the board of directors and the technical committee of the fund.

The Brazilian Development Bank (BNDES) manages the fund and decides how to allocate its resources.

Last September it told Climate Home that any requests are processed “in accordance with the strategic vision, guidelines and focuses” outlined in the 2023-25 ​​Biennium, a new set of guidelines created by the Amazon Fund’s Guiding Committee. It has not replied to further requests for comment.

Donors sceptical over plans

A spokesperson for Germany’s Ministry for cooperation and development, said the use of Amazon Fund resources “is clearly defined and restricted” by the presidential decree underpinning the fund’s creation. “Based on these rules and regulations, the use of financial resources for paving a road through the rainforest i