Impact Policy Tracker Policy

Fund for Life and Biodiversity



The Fund for Life and Biodiversity is an innovative financial mechanism established in Colombia in 2023 through Decree 1648. Its objective is to mobilise, coordinate, and strategically allocate resources to address long-term critical environmental challenges, in line with national environmental policy priorities. These include climate resilience, biodiversity conservation, and ecosystem restoration at both national and subnational levels.

The Fund draws resources from five primary sources: 80% of revenues from Colombia’s National Carbon Tax, allocations from the General State Budget, national and international cooperation, donations, and voluntary contributions from public and private entities. Government projections estimate that more than COP 5 trillion (approximately USD 1.35 billion) will be invested through the Fund by 2026, positioning it as one of Colombia’s most significant environmental financing instruments to date.

The Fund operates as an autonomous public trust attached to the Ministry of Environment and Sustainable Development and is administered through a fiduciary arrangement by Fiduciaria Colombiana de Comercio Exterior (Fiducoldex). Strategic oversight and priority-setting are carried out by a public Governing Council, composed of representatives from the Ministry of Environment and Sustainable Development, other relevant ministries, regional environmental authorities, scientific institutions within the National Environmental System (SINA), and the National Natural Parks system. While the Council defines investment priorities and approves project pipelines, the fiduciary manager is responsible for the disbursement of funds.

While the Fund represents a significant innovation within Colombia’s public environmental financing architecture, it is not an impact investment fund in the traditional financial sense, but rather a public policy instrument with an explicit impact-oriented mandate.

Highlights

  • Making Biodiversity a Core Public Investment Priority: The Fund marks a strategic shift in Colombia’s public environmental finance by placing biodiversity - rather than climate mitigation alone - at the centre of its investment approach. As one of the world’s five megadiverse countries, Colombia faces the dual challenge of safeguarding exceptional natural capital while advancing its climate commitments. While earlier green finance efforts focused primarily on emissions reduction, this Fund reflects a deliberate expansion towards financing biodiversity conservation, ecosystem restoration, and the sustainable use of natural resources at scale. The Fund builds on Colombia’s pioneering role in biodiversity finance, grounded in regulatory frameworks developed through the Financial Superintendency of Colombia, the advancement of biodiversity finance taxonomies, and the issuance of some of the world’s first biodiversity bonds - most notably through BBVA Colombia - to support sustainable agriculture and forest regeneration.

  • Carbon Tax Revenues as a Stable Source of Biodiversity Finance: A defining feature of the Fund is the earmarking of revenues from Colombia’s National Carbon Tax as a core financing source. Established under Law 1819 of 2016, the tax is levied on the carbon content of fossil fuels and paid by producers and importers. Between 2017 and 2024, it generated approximately COP 3.2 trillion (around USD 864 million), reflecting the pricing of roughly 177 million tonnes of CO₂ equivalent. By allocating a significant share of these proceeds to biodiversity conservation, ecosystem restoration, and payments for environmental services, Colombia is transforming a mitigation-oriented fiscal instrument into a stable source of long-term finance for nature-related investments.

Government’s Role:
Market Participant


Country:
Colombia

Policy Type:
Funding Programmes

Year: 2023

Responsible Institution:
Ministry of Environment and Sustainable Development

Funding Programmes

What are funding programmes?

Funding programmes - which provide financial resources in the form of grants, loans, equity, and guarantees - can be used by governments and public institutions to address financing gaps and attract private sector participation, often through dedicated funding windows, government-backed funds, and public-private partnerships, towards businesses that place social and/or environmental impact at their core. By doing so, they help grow a pipeline of mission-oriented organisations capable of addressing systemic challenges while contributing to inclusive and sustainable economic development.

This support can take various forms: capital provided directly to enterprises to meet early-stage or growth financing needs; investments channelled through intermediary funds to reach a broader range of businesses; or blended finance models where public or philanthropic actors absorb higher risks to make investments viable for private investors. The design of these mechanisms is often catalytic, helping to build investor confidence, promote financial inclusion, and strengthen the resilience of social enterprises across diverse sectors and geographies.