Blue Ventures/G. Cripps Blue Natural Capital Financing Facility

Blue Ventures/G. Cripps Blue Natural Capital Financing Facility A new Facility to advance financially viable coastal climate resilience projects with clear ecosystem service benefits

Creating bankable investment opportunities based on blue natural capital Coastal blue natural capital projects Conservation, protection and restoration of coastal ecosystems (including mangroves, seagrasses and saltmarshes) Climate change mitigation and adaptation benefits Sustainable development Food security and local livelihoods Biodiversity and other ecosystem services Social, environmental as well as economic returns Blue Natural Capital Financing Facility The BNCFF supports the development of sound, investable blue natural capital projects with clear ecosystem service benefits, based on multiple income streams and appropriate risk-return profiles. The BNCFF assists project partners in assessing, preparing and structuring opportunities into bankable investments. This helps to reduce the risk of natural capital investments. Why a Blue Natural Capital Financing Facility? Mangroves, seagrasses and saltmarshes are particularly hard hit by destruction, pollution and unsustainable resource uses. As degradation progresses, the impacts of climate change are becoming ever more threatening for coastal communities and beyond. Global action for resilient coasts, including sustainable coastal development is urgently required, and public donor funding and philanthropy will need to be complemented by private sector sources. The BNCFF closes a gap in the market by translating coastal nature-based projects for climate adaptation and mitigation into investor portfolios. The BNCFF helps to create opportunities for investors and businesses to be part in building sustainable futures for people and nature. What does the Facility do? The Facility provides assistance to beneficiaries and project sponsors to prepare the technical, legal and financial dimensions of promising blue natural capital projects, through studies, evaluations and small seed investments to secure further project development. The Facility offers guidance for readiness to access sustainable financing. Octavio Aburto-Oropeza

Positive Impact Framework The investments advanced by the BNCFF provide positive impacts for climate adaptation & mitigation, biodiversity and sustainable livelihoods. Risks are mitigated through systematic yet easily implementable environmental and social standards. A clear framework to identify and monitor the impacts of projects using latest technology to reduce transaction costs will be developed. Integrated approach to blue natural capital projects The conservation and restoration of coastal and marine ecosystems requires projects to be robust and pass investment hurdles. This can be achieved by integrating complementary investment components, forming tight synergies to facilitate the creation of resilient coasts. 1. Nature-based solutions and ecosystem-centered sustainable business operations linking coastal ecosystem restoration and conservation to climate change adaptation and mitigation as well as sustainable resource management and use. 2. Modern data systems & marine technology supporting nature-based solutions (communication, planning and monitoring) and sustainable livelihoods (i.e. through availability of wireless networks). 3. Small-scale renewable energy and clean water solutions in coastal zones as new business and livelihood opportunities to reduce pressure on coastal ecosystems. Environmental returns through conserving and restoring coastal ecosystems for climate mitigation & adaptation and biodiversity. Social returns through improving livelihoods and provisioning sustainable and alternative income sources for local communities. Economic returns through integrating sustainable businesses creating tangible products and services with environmental assets using established & nascent markets and payments for ecosystem services.

Investment package SMALL ISLAND Wireless communication Telecommunications company Mobile technologies facilitate the planning and setup and enforcement conservation areas as well as monitoring of e.g. biodiversity. Mobile telecommunications services Ecotourism business revenues, incl. payments for ecosystem services Tourism Healthy coastal ecosystems produce clear water for leisure and are rich in biodiversity creating ecotourism attractions of marine and terrestrial wildlife. Improved livelihoods and income Increased biodiversity Solar desalination company/ local government Solar powered desalination Improved irrigation increases agricultural produce and relieves pressures on mangrove products. Enhanced coastal resilience Healthy coastal ecosystems IUCN Tourism industry; local tourism businesses; government e.g. ministry for tourism and sustainable development Investment in clean water Note: Every blue natural capital project will have its own unique environmental, social and economic returns, combining the investment components in distinctive ways. This graph shows potential revenue streams and is for illustration only.

Investment package COAST Local and global businesses with access to sustainable seafood markets Sustainable mangrove fisheries Mangrove fisheries adopt sustainable practices to maintain healthy stocks and produce certified (e.g. deforestation free) seafood Sales of premium certified seafood Carbon mitigation outcomes for results based payments or carbon markets Climate mitigation Carbon stocks from restored and conserved coastal ecosystems are monitored for carbon credit sales or certified statements of emission reduction outcomes. Improved livelihoods and income Increased biodiversity Biofuel producer Clean energy/ biofuel production Biofuel production can offer a clean energy solution to substitute the use of fuelwood from mangrove forests and fossil fuel. Owner or concessionaire of coastal wetlands conserves, restores and/or actively replants mangroves Enhanced coastal resilience Healthy coastal ecosystems Sales of biofuel to local businesses and communities IUCN Note: Every blue natural capital project will have its own unique environmental, social and economic returns, combining the investment components in distinctive ways. This graph shows potential revenue streams and is for illustration only.

Investment package DELTA Communities, businesses, national governments, covered by parametric risk insurance, invest in wetland restoration for climate adaptation Flood and storm protection Restored coastal ecosystems (e.g. mangrove forests and coral reefs increase flood and storm protection and climate resilience. Reduced future damage costs; payments for enhanced coastal protection (e.g. in form of reduced insurance premiums costs) Credit-based solar home system or micro-business solar system sales Renewable energy Solar home systems and solar- powered cooking stoves offer renewable energy, making the unsustainable harvest of mangrove fuel-wood or mangrove charcoal production redundant. Improved livelihoods and income Enhanced coastal resilience Increased biodiversity Healthy coastal ecosystems Telecommunications company Marine data & technology Mobile data and GPS technology offers mapping and planning of conservation and restoration areas for effective resilience measures. Solar energy company & local NGOs Mobile telecommunications services IUCN Note: Every blue natural capital project will have its own unique environmental, social and economic returns, combining the investment components in distinctive ways. This graph shows potential revenue streams and is for illustration only.

A robust project pipeline One key function of the BNCFF is to prepare an investment pipeline of bankable projects. These projects will be supported in finding appropriate funders. In cooperation with an appropriate financial partner BNCFF will develop a dedicated sustainable investment fund (equity and blended debt finance). The BNCFF will also support projects in efforts to be integrated into green bonds or resilient infrastructure bonds. Partnerships Well-functioning partnerships are essential to ensuring the long-term success and innovative approach of blue natural capital projects. The BNCFF facilitates opportunities for cooperation between nascent as well as established initiatives of the scientific community, leading financiers and service providers in the field. Blue Ventures/G. Cripps The BNCFF is supported by the Ministère du Développement durable et des Infrastructures (MDDI), Government of Luxembourg, and led by the International Union for Conservation of Nature (IUCN). In the field of coastal conservation and management, the IUCN has strong existing partnerships with leading international initiatives and scientific networks. The BNCFF will build on the networks and experience of its managers and key advisors as well as IUCN s extensive network of members and commissions. For the initial phase the BNCFF is seeking grant funding or reimbursable grants. In the long-term the BNCFF envisions to receive additional fees (consulting, deal structuring and financial closing) and technical assistance cost sharing with some beneficiaries and profit sharing with the accompanying Fund.