Brazil launches ambitious fund for Amazon forest

RIO DE JANEIRO/BRASILIA (Reuters) - Brazil’s President Luiz Inacio Lula da Silva launched an international fund on Friday to finance conservation and sustainable development in the Amazon as deforestation rates rise.

The fund will support forest conservation, scientific research and sustainable development projects, such as rubber tapping, forestry management or developing drugs from plants.

“We are conscious of what the Amazon represents for the world,” Lula said during an inauguration ceremony in Rio de Janeiro.

“It’s better for the country’s image to do things right, so we can walk in international forums with our heads high,” Lula said.

The government hopes to raise $1 billion within one year and as much as $21 billion by 2021, according to Brazil’s National Development Bank (BNDES), which will manage the fund.

It is open to companies, countries and nongovernmental organizations.

In September, Norway will make the first donation -- $100 million -- said Eduardo Bandeira de Mello, head of Environment and Social Responsibilities at BNDES.

Brazil has for some time urged industrialized nations to help pay for the conservation of the Amazon.

Not chopping down trees had a cost, especially to millions of people living in the Amazon, Lula told visiting German Chancellor Angela Merkel in May.

But Brazil would not accept foreign meddling in its Amazon policies, Roberto Mangabeira Unger, minister for strategic affairs, said in an interview in Brasilia.

“The fund is a vehicle by which foreign governments can help support our initiatives without exerting any influence over our national policy,” Unger said.

“We are not going to trade sovereignty for money.”

Illegal loggers usually pave the way for farmers and cattle ranchers to move deeper into the forest in search of cheaper land.

The Lula government has increased police raids on illegal loggers and expanded protected areas. But it is also building roads and hydroelectric plants which conservationists fear could increase deforestation in the long term.

In the 12 months through July, deforestation will have totaled around 13,000 sq km (5,019 sq miles), the government estimates. Last year 11,224 sq km (4,332 sq miles) were destroyed, down from a peak of 27,379 sq km (10,570 sq miles) in 2004.

Writing by Raymond Colitt; Editing by Eric Walsh