The overall investment objective under SO1 is to transform smallholder investment horizons from short to long-term, characteristic of reforestation investments. Smallholders typically invest to meet their short-term subsistence needs, finding conventional long-term gestation periods of tree growing unsuitable. The ECOTRUST TGB model provides a payment for environmental services (PES)-based sustainability incentive that motivates smallholders to engage in tree growing as a business. Additional innovative market-based incentives and rewards for environmental outcomes will also be delivered.

ECOTRUST employs a blended financing model (public, private, and internal revenue) to reduce transaction and operational costs, ensuring that only 4 out of every 10 dollars paid by private sector buyers go towards these expenses. As a result, every participating farmer receives 60% of all their carbon payments directly into their accounts. Each farmer contributes 10% to the Community Carbon Fund (CCF), which serves as a self-insurance fund supporting farmers in addressing external shocks and providing start-up grants for multiple forest-based enterprises for sustainable forest management. Blended finance is thus used as a de-risking tool to enhance smallholder participation.

The primary mechanism in SO1 will be scaling out TGB. The TGB model is designed to de-risk smallholder investments, ensuring long-term investments in tree growing. SO1 will support interventions that build the capacity of households, communities, and their natural capital to prevent, mitigate, and cope with risk and recover from climate-induced shocks through four key result areas.