The FCPF was originally developed by the World Bank and The Nature Conservancy in 2007 as an initiative to help countries engage with an emerging concept called REDD+. This new mechanism being negotiated under the UN Framework Convention on Climate Change was looking at how developing countries could be compensated for their efforts to preserve tropical forests and in so doing reduce the emission of greenhouse gases into the atmosphere.

The FCPF gained critical support in 2007, when Germany, as host of the G8 Summit that year, successfully advocated for the initiative to be endorsed by G8 governments. Six months later, in December 2007, the World Bank and The Nature Conservancy, along with nine donor governments launched the FCPF at the UN Climate Change Conference in Bali (COP13).

Today, the FCPF has grown to include 47 developing countries, 17 financial contributors (including two private companies and one NGO), along with active observers from indigenous peoples, women and civil society groups, and several international delivery partners.