Transcript Update on the Natural Capital Financing Facility

Natural Capital Financing
Facility
1
NCFF
Objectives:
To encourage investments in revenue-generating or cost-saving projects
promoting the conservation of natural capital to meet
biodiversity/adaptation objectives and support green growth;
To demonstrate to private investors the attractiveness of natural capital
projects; build project pipeline
€ 100-125 million Investment facility during 2015-2017
Operations between €5 million and €15 million:
Direct loans to individual, large projects
Indirect loans through financial intermediaries aimed at smaller projects
Indirect investment aimed at smaller projects via equity funds
€ 10 million Support facility for project development
EIB executes the Facility
EU contribution to the EIB of € 60 million for guaranteeing investments
and financing the Support Facility. Budget comes from the LIFE
programme, which is the EU’s funding instrument for the environment
and climate action.
NCFF - Four project categories
Projects using Payments for Ecosystem Services (PES):
payments involving payment or compensation for the benefits
provided by ecosystems, such as cleaner water, higher soil qualiy
or enhanced carbon sequestration
Green Infrastructure (GI) projects: investments in natural
capital that generate a range of goods and services, such as water
quality, flood protection and climate change adaptation
Projects developing Biodiversity offsets: conservation
measures designed to compensate for the unavoidable damage to
biodiversity arising from development projects.
No support for compensation to comply with article 6(4) of the Habitats Directive
Innovative pro-biodiversity and adaptation businesses:
projects involving the supply of goods and services from
conservation activities, such as sustainable forestry, agriculture,
aquaculture and ecotourism. Innovation may relate to innovative
approaches to ecological restoration/conservation or innovative
business models
NCFF - Eligibility criteria
Projects must:
Promote one or both of the following objectives:
conservation, restoration, management and enhancement of ecosystems,
including through ecosystem-based solutions
application of ecosystem-based approaches that enable businesses and
communities to address identified risks associated with current and projected
impacts of climate change, including through urban, rural, and coastal green
infrastructure projects.
Demonstrate financial and economic benefits, including the ability
to generate revenues or save costs, with overall benefits exceeding
costs
Contribute to the objectives of the EU LIFE programme for nature
and biodiversity, and/or climate adaptation
Meet the standard criteria set by the EIB for its investments
NCFF – Further information
Launch by two Commissioners and EIB vice-president
on 16 February 2015
http://ec.europa.eu/environment/life/funding/financial_instruments/
ncff.htm
http://www.eib.org/products/blending/ncff/index.htm and
[email protected]
Promotion:
First leaflet available on the website. Further leaflets and brochure
under development
Multi-stakeholder workshop on 8 May
Green Week session 'investing in nature' on 3 June
Example of Potential Project (1)
What is the project?
Forest PES Scheme
- forest-based nature conservation agreements and nature
management projects. Scale-up for an existing successful Nature conservation initiative
Who are the actors involved?
Ministries of Agriculture and Environment respectively
Government-owned PES company
How does it generate revenues/cost savings?
The PES company leases biodiversity benefits; establishment of VCS and CCB
certificates
Relevance to the NCFF
NCFF expected to leverage additional private sector involvement through certification
/verification. The value of the NFF is: reducing dependence on public support,
maximising social and environmental ROI through certification, providing a
demonstration effect and adding legitimacy, demonstrating the viability of alternative
financing structures.
Benefits
Establish favourable conservation trends in forest ecosystems, Active voluntary-based
conservation agreements between private forest owners and authorities, improve
country’s network of protected areas, enhance the application of nature management
methods in commercially managed forests, improve the knowledge base on forest
biodiversity conservation, increase collaboration between forest and environmental
organisations.
Example of Potential Project (2)
What is the project?
GI +PES - Fund green investments in business improvement districts for which local businesses would
be willing to pay, because of improvements in the business environment and delivery of ecosystem
services – installation of green roofs, walls, rainwater harvesting etc...
Who are the actors involved?
Business Development Districts in large city
Public-private regeneration partnership comprising of local authorities city statutory bodies, local
businesses and partner organisations.
How does it generate revenues/cost savings?
The main opportunities for revenue generation lie in the financing of ambitious GI and pro-biodiversity
schemes. Cost savings can also be attributed to GI installations.
Relevance to the NCFF
While small scale GI installations are being delivered within traditional financing mechanisms, it is
impossible to attract that same financing to larger scale, public realm interventions. Despite evidence
of revenues and cost savings, there are also barriers to securing commercial finance due to the novel
and innovative nature of the approach, and perceived risks among potential financiers. NCFF
investment will address these barriers and demonstrate new financial models of urban green
infrastructure.
Benefits
Potential for increasing the stock of natural assets within an intensively-used sub-region at the centre
of the city. The city is rapidly growing with plants to continue this rapid growth. A strategic intervention
from the NCFF will support this growth to be pro-biodiversity and sustainable. Clean air, protection
against surface water flooding, pollination of plants and provision of “green lungs” in the form of GI
with dense urban areas – all of these ate vital natural capital assets with associated positive multiplier
effects on quality of life and economic productivity.