The project aims to transform the economic model of the municipality of São Félix do Xingu (PA) and remove it from the list of municipalities subject to environmental sanctions due to high rates of deforestation and forest degradation.

The municipality of São Félix do Xingu (PA), covering 84,213 km², still retains about 73% of its original forest cover, but it tops the list of municipalities with the highest rates of deforestation. The municipal economy, based primarily on extensive livestock farming, was adversely affected after the municipality was placed under an environmental embargo by the Ministry of the Environment, with some producers facing credit restrictions.

There are growing efforts to transform the economic model of São Félix do Xingu. Funbio began participating in these efforts in 2012 through the Green Economy in the Amazon Region project, in partnership with TNC and with funding from the British Embassy’s Prosperity Fund.

The project includes the design of a financial mechanism to help reduce deforestation and forest degradation, the design of an arrangement for sharing benefits from REDD+ projects, and the dissemination of these experiences through the Green Municipalities Program.

In 2012, several workshops were held with local stakeholders to design and validate the São Félix do Xingu Fund, which aims to contribute to the implementation of the Municipal Pact to End Illegal Deforestation. To share the fund’s design, a seminar was held in Belém with representatives from the Green Municipalities Program, the State of Pará, and the municipality, and a publication was produced.

In 2013, the arrangement for the distribution of benefits will be finalized, as well as the design of the São Félix do Xingu Fund Financing Program, its legal establishment, and the drafting of its operational manual. The fund is expected to begin operating on a pilot basis to refine its processes and tools.

This initiative stemmed from the “Preparing Brazil for REDD+” project—in which Funbio also participates—which focuses on the states of Mato Grosso and Pará but also examines the context of the municipality of São Félix do Xingu.