Timor–Leste
Timor-Leste is home to a rich variety of terrestrial, coastal, and marine ecosystems that provide essential environmental, economic, and social benefits. The country’s biodiversity includes tropical forests, mangrove ecosystems, seagrass meadows, coral reefs within the globally significant Coral Triangle region, and important watershed landscapes that support food security, water resources, climate resilience, and the livelihoods of local communities. However, these ecosystems face increasing pressures from deforestation, land degradation, unsustainable natural resource use, climate change, and biodiversity loss. Conserving and sustainably managing Timor-Leste’s natural capital is therefore critical for achieving national development goals, strengthening environmental resilience, and meeting the country’s commitments under the Convention on Biological Diversity (CBD) and the Kunming-Montreal Global Biodiversity Framework.
Biodiversity conservation in Timor-Leste is currently financed through a combination of government resources and international assistance. Public expenditure remains the primary source of biodiversity-related financing, with investments channeled through sectors such as agriculture, forestry, fisheries, environment, water resources, protected area management, and climate change adaptation. Additional support is provided by bilateral and multilateral development partners through projects focused on ecosystem restoration, sustainable natural resource management, marine conservation, climate resilience, and community-based conservation initiatives. International financing mechanisms, including environmental and climate funds, also contribute to supporting biodiversity-related programmes. While these financing mechanisms have enabled significant conservation efforts, financial resources remain limited relative to the scale of biodiversity challenges and conservation needs. Strengthening coordination, improving expenditure efficiency, and identifying new and sustainable sources of finance have therefore become important national priorities.
The Biodiversity Finance Initiative (BIOFIN), implemented by the Ministry of Finance in strategic partnership with the Ministry of Tourism and Environment and with support from the United Nations Development Programme (UNDP), is supporting Timor-Leste in addressing these challenges through a comprehensive approach to biodiversity finance. BIOFIN helps the country understand how biodiversity is currently financed, assess the resources needed to achieve national biodiversity objectives, and identify practical solutions to close financing gaps.
Timor-Leste’s diverse terrestrial, coastal and marine ecosystems are an important part of the country’s natural capital, supporting agriculture, fisheries, water security, livelihoods and climate resilience. However, growing pressures on natural resources and limited financial resources for conservation highlight the need for more sustainable and coordinated investment in biodiversity.
UNDP BIOFIN is supporting the Government of Timor-Leste to develop a more strategic and evidence-based approach to biodiversity finance. The initiative has established national governance and coordination mechanisms, including a National Steering Committee, and is bringing together government institutions and other stakeholders to strengthen biodiversity finance planning.
Through the Policy and Institutional Review, Biodiversity Expenditure Review and Financial Needs Assessment, BIOFIN is examining the policies and institutions that influence biodiversity finance, tracking existing expenditure and assessing the resources required to achieve national biodiversity priorities.
These assessments will provide the foundation for Timor-Leste’s Biodiversity Finance Plan, which will identify and prioritize practical finance solutions to improve the effectiveness of existing resources and mobilize additional public, private and international finance for nature. The process will also support stronger integration of biodiversity into national planning and budgeting, contributing to conservation, climate resilience and sustainable development.
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Finance solutions
1. Strengthening Biodiversity Mainstreaming in Public Finance
Timor-Leste is designing measures to integrate biodiversity considerations into national planning and budgeting processes. This will help ensure that public investments in sectors such as agriculture, fisheries, forestry, and tourism contribute to biodiversity conservation and sustainable development.
Stage: Under consideration (analytical phase)
Lead agencies/partners: Ministry of Finance, Ministry of Tourism and Environment, UNDP BIOFIN.
2. Biodiversity Expenditure Tracking and Monitoring System
BIOFIN is supporting the development of a system to identify and track biodiversity-related expenditures across government institutions. This will improve transparency, support better decision-making, and help assess the effectiveness of biodiversity investments.
Stage: Under consideration (analytical phase)
Lead agencies/partners: Ministry of Finance, Ministry of Tourism and Environment, UNDP BIOFIN.
3. Strengthening Cross-Sectoral Coordination for Biodiversity Finance
This solution aims to improve collaboration among government agencies, development partners, civil society, and other stakeholders involved in biodiversity conservation. Stronger coordination will help align policies, reduce duplication, and improve the impact of biodiversity financing.
Lead agencies/partners: Ministry of Finance, Ministry of Tourism and Environment, National Steering Committee, UNDP BIOFIN
4. Identification of Innovative Biodiversity Finance Solutions
BIOFIN is assessing opportunities to mobilize additional resources for biodiversity through innovative financing mechanisms, such as sustainable tourism contributions, blue economy initiatives, private sector engagement, and biodiversity-positive fiscal measures.
Stage: Considering and designing
Lead agencies/partners: Ministry of Finance, Ministry of Tourism and Environment, National Steering Committee, UNDP BIOFIN.
5. Community-Based Ecosystem and Conservation Financing
Timor-Leste is exploring mechanisms that support community-led conservation through incentives, sustainable livelihood programmes, ecosystem restoration, and community-based natural resource management initiatives.
Stage: Idea and assessment phase
Lead Agencies/Partners: Ministry of Agriculture, Livestock, Fishery and Forestry (MALFF), local authorities, community organizations, UNDP BIOFIN
6. Sustainable Marine and Blue Economy Financing
Given Timor-Leste's rich marine biodiversity, this solution explores financing mechanisms for sustainable fisheries, marine protected areas, eco-tourism, and coastal ecosystem conservation to support both biodiversity and economic development.
Stage: Idea and assessment phase
Lead Agencies/Partners: MALFF, Ministry of Finance, Ministry of Tourism and Environment, UNDP BIOFIN, development partners.
Key results
As BIOFIN Timor-Leste remains in the analytical phase, the project is focused on establishing the evidence base, institutional arrangements, and strategic direction necessary to strengthen biodiversity finance in the country. The expected results emerging from the Policy and Institutional Review (PIR), Biodiversity Expenditure Review (BER), Finance Needs Assessment (FNA), and subsequent Biodiversity Finance Plan (BFP) are intended to support both national biodiversity objectives and the implementation of the National Biodiversity Strategy and Action Plan (NBSAP) 2026–2030.
A key expected outcome is the improved integration of biodiversity considerations into national planning, budgeting, and public investment processes. The PIR identified that while Timor-Leste has a relatively strong policy and legal framework for biodiversity conservation, biodiversity considerations are not yet systematically incorporated into budget formulation, public investment appraisal, or municipal planning systems. BIOFIN therefore aims to support policy and procedural reforms that introduce biodiversity screening into government budget processes and investment decision-making, ensuring that public expenditure contributes more effectively to biodiversity conservation and sustainable development objectives.
Another important goal is the establishment of a biodiversity expenditure tracking and monitoring mechanism within government financial systems. Through the BER process, BIOFIN has already developed expenditure-tagging guidelines aligned with the NBSAP and BIOFIN methodology. Once expenditure data become available and analysis is completed, the project is expected to provide the foundation for institutionalized tracking of biodiversity-related spending across sectors. This will improve transparency, accountability, and evidence-based allocation of financial resources while supporting national reporting on biodiversity commitments.
The project also seeks to strengthen institutional coordination and governance for biodiversity finance. The identification of a National Steering Committee and the engagement of key ministries, including the Ministry of Tourism and Environment and the Ministry of Finance, represent important first steps toward a more coordinated approach to biodiversity finance planning. Going forward, BIOFIN aims to formalize and strengthen these coordination mechanisms to support joint planning, resource mobilization, and implementation of biodiversity finance solutions across government institutions and sectors.
Establishing National Governance for Biodiversity Finance
A National Steering Committee has been established to guide the BIOFIN process and strengthen coordination among government institutions and other stakeholders involved in biodiversity finance.
Building Timor-Leste’s Biodiversity Finance Evidence Base
The BIOFIN process is advancing the Policy and Institutional Review, Biodiversity Expenditure Review and Financial Needs Assessment, which will provide the evidence needed to understand current biodiversity finance, expenditure patterns and future financing needs.
Identifying Potential Areas for Biodiversity Finance Reform
Preliminary analysis has identified opportunities to better align public finance with biodiversity objectives, including strengthening biodiversity safeguards in agricultural support programmes and energy subsidies and improving the tracking of biodiversity-related public expenditure.
Exploring Sustainable Finance for Protected Areas
Potential approaches are being assessed to strengthen the long-term financing of protected areas, including improved visitor management and sustainable revenue models that could support conservation and protected-area management.
Exploring New Biodiversity Finance Mechanisms
Timor-Leste is examining potential mechanisms including biodiversity credits, Access and Benefit-Sharing (ABS), and nature-positive fiscal reforms. These options remain preliminary and will be further assessed and prioritized through the Biodiversity Finance Plan.