Coordinating Finance Across Sectors for Landscape Restoration
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Integrated landscape management is key to maximizing returns on forest landscape restoration investments. Coordination of different types of investments is needed at the landscape level. Tools and training are urgently required to improve investment readiness and coordination. Billions have been committed to forest landscape initiatives but coordinated investment is needed. A variety of public and private actors could invest in enabling activities like platforms and plans or asset investments like agriculture, infrastructure, and restoration. Challenges include incorporating landscape criteria into investments and linking different financial flows. Developing financing plans and investment proposals that contribute to landscape goals can help attract more coordinated investment.
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Coordinating Finance Across Sectors for Landscape Restoration
- 1. Coordinating Finance for F&LR Across Sectors How do we get to sustainable landscape investing? Louis Wertz International Conference on Forest Landscape Restoration under Global Change 7 June 2017
- 2. Key Messages • Integrated landscape management must be a key component of F&LR implementation, to maximize return on investments • Investment coordination is a role and responsibility of good integrated landscape management • Tools and training for investment-readiness at the landscape level, and for the coordination role, are needed urgently.
- 3. $ Billions stand to be invested • $1.25bn committed to 20x20 • $1.5bn committed to AFR100 • All the potentially ”aligned” commitments (deforestation-free supply chains, SDGs, etc.).
- 4. Investment Needs • Enabling investments – Multi-stakeholder platform – Strategic planning and coordination, training – Landscape assessments, monitoring, impacts – Policies and financial incentives • Asset investments – Agricultural practices/value chain activities – Enterprises, industries using natural resources/products – Green infrastructure/greening built infrastructure – Natural resource restoration (productive lands, habitat)
- 5. Social/Environmental Return Financial Return Governments NGOs/Foundations Development Finance Inst. Impact Investors Traditional Investors
- 6. Who has money to invest? • Farmers, community organizations ($, labor) • Agribusinesses • Philanthropic foundations, family funds • Microfinance, revolving funds, cooperative banks • Government agencies (local, state, national) • Impact investors • Commercial national/state banks • Private equity/venture capital • Development finance institutions • Institutional investors, sovereign wealth funds
- 7. Interest of different investors Time horizon, investment size, risk appetite
- 8. Investment pathway over time
- 11. Investment needs in Imarisha Naivasha Enabling investments • Imarisha-Naivasha stakeholder platform • Imarisha Sustainable Development Plan, County coordination • Set-up of payments for ecosystem services • Set-up of Sustainable Development Fund • Technical assistance to farmers and other land managers • Monitoring of watershed health, wildlife, production, livelihoods Asset investments • Naivasha town water infrastructure improvements • Water use efficiency investment by flower companies, other irrigation users • Restoration of vegetative cover in upper watershed • Climate-smart agricultural value chains • Water infrastructure for pastoralists • Maintenance and improvement of wildlife reserves • Greening tourism infrastructure
- 12. Private investments in Imarisha Naivasha Enabling investments • UK retailers--ASDA, Tesco, Marks and Spencer and Sainsbury’s, LNGG: Funded Sustainable Development Action Plan and Watershed Resource Management Plans, Imarisha operating funds • Finlays: financial contributions to multi-stakeholder platform • German-Austrian supermarket REWE and Swiss-Coop: Funded research Asset investments • Equity Bank: low interest loans to smallholders for best practices • Flower companies: invest in own water use efficiency • Water user fees: local water user associations collect fees and monitor water use (possible surcharge to support basin sustainability) • Payments for Ecosystem Services for good practices by farmers in upper catchment. • Diverse companies: contribute to Sustainable Development Fund, through a price premium from flowers sold in the EU, water user fees, and other revenues; exploring equity investors
- 13. Challenges for finance institutions of integrated landscape investments • Incorporating landscape criteria into financial decisions • Mitigating investment risks • Effective engagement in landscape partnerships • Linking/coordinating with other financial flows within the landscape • Monitoring multiple outcomes Shames, et al. 2015
- 14. Securing finance for ILM enabling & asset investments • Scope existing sources of finance and financial flows • Develop a Financing Plan for the agreed Landscape Action Plan that identifies priority investments and roles appropriate for different types of investors • Foster new partnerships between finance institutions and landscape stakeholders • Design enabling investments to leverage, shape and complement private investment • Assist stakeholders to develop bankable investment proposals that contribute to landscape goals and demonstrate a clear ‘investment case’ • Develop institutions to aggregate funding from multiple sources, and disburse large-scale funds to diverse land managers
- 16. Thank you Contact lwertz@ecoagriculture.org New report and action agenda: Business for Sustainable Landscapes peoplefoodandnature.org/challenge/business
Editor's Notes
- GEF Multilateral development Bilateral National programs NGOs Private companies Impact investors We have looked specifically at what we call integrated landscape management, and evaluated the total amount of money in direct and “aligned” investments or funds available or already committed to ILM. Much of ILM is FLR, but not all, and some of FLR is ILM, but far from all. I’ll get to that. The GEF – we did a recent analysis of their portfolio and found 295 projects that could be considered supporting integrated landscape management between 1991-2011 invested $1.2 bln and catalyzed $5.8 bln in co-finance. (World Bank Green Climate Fund, European Dev Bank) (NL, Germany, Switz, Italy, et al) (landscape restoration, REDD+, ES-based adaptation, climate-smart) (environmental, agric, social) (agribusiness, food, but also mining, energy, recreation/tourism) Food giants like Kellogg’s, Nestle, General Mills investing in “sustainable brands” (Growing: $114M in 2016, from $77M in 2015 47% growth. But only 6% is in food/ag)
- Cross-cutting and enabling elements identified as critical to achieve integrated landscape objectives that can balance multiple demands and uses are not currently funded to the degree necessary. These include investments focusing on climate change, livelihoods, governance and capacity for ILM, monitor - ing, enforcement, technology and innovation, research and awareness building.
- These investors have the money, and also the complaints that there are “no good projects.”
- The Lake is a globally renowned wetland biodiversity hotspot with Ramsar status, and a significant tourist destination playing home to over 300 different species of bird and attracting over 1.8 million tourist days a year. The lake is also home to Kenya’s booming geothermal energy industry already providing about 10 percent of Kenya’s electricity with the potential to provide much more. Perhaps above all, the lake is also home to a key plank of the Kenyan economy - the horticulture and floriculture industry. This industry clusters around the lake and is wholly dependent upon it. It employs 50,000 people in Naivasha and accounts for the jobs of perhaps ten times as many in the wider Kenyan economy whilst providing 10 per cent of Kenya’s total export revenues and around 4 per cent of its GDP. The rapid growth of this industry has led to a boom in the catchments human population: up from under 50,000 to over 750,000 in just 40 years with most located in Naivasha town and informal settlements around the lake largely devoid of formal sewerage and waste treatment facilities. Concerns about the effects of the industry on the local environment had been growing for sometime and on farm practice had improved in response, with the better producers introducing water recycling, aquaponics, minimum wage requirements and the like.
- Currently working on this.