Photo credit: © T. Vignaud
Photo credit: © T. Vignaud
Merging the worlds of marine conservation and responsible investment for a better future
Blue finance develops solutions for marine conservation, livelihood improvements and climate change resilience.
Blue finance’s objective is to improve the management of Marine Protected Areas. A suite of initiatives is being developed in the Caribbean and in Southeast Asia where Blue finance is partnering with Governments, communities, NGOs, donors and impact investors to design, finance and implement joint partnerships for effective management of Marine Protected Areas.
The projects contribute to the sustainable use of more than 8,500km2 of coral reefs, the livelihood enhancement of 68,000 households and climate change resilience (SDGs nº14, 1, 5, 8 and 13).
Blue finance is a specialist international NGO with expertise and a track record in structuring and establishing collaborative management agreements and sustainable financing mechanisms for MPAs globally.
For each project, Blue finance is partnering with key actors to design, finance and implement agreements for the collaborative management of Marine Protected Areas.
Antigua & Barbuda
St Kitts & Nevis
Oriental Mindoro, Philippines
1 MPA already under active management
The MPA “Arrecifes del Sureste” in the Dominican Republic is almost 8000km2, covering just around 100 km coast and encompassing vibrant coral reef ecosystems, several major urban centers and 2 of the country’s primary tourism centers (receiving >4M visitors annually).
The MPA was designated in 2009 and has been mostly inactive since, essentially a “paper park”.
Partnering with the Government and local NGOs, Blue finance designed a 10-year agreement to co-manage the MPA. The agreement was signed in 2018 with a non-profit company comprised of local conservation NGOs, local foundations of the major tourism holdings in the country and other associations.
Operating costs (i.e. Improving & Monitoring the health of marine habitats, Zonation & Enforcement, Community engagement & Livelihood enhancement, Support to tourism activities, Management and Marketing) are expected to total USD 1.4M per year.
The initial investments (e.g. vessels, equipment, infrastructure, visitor centre, under water assets) sum almost US$3M.
The company is expected to become financially sustainable and generate its own incomes from statutory MPA user fees and innovative edutainment visitor centre.
Blue finance secured major debt financing for the MPA from impact investors through the Sustainable Ocean Fund blended with philanthropic grants.
Capital is now being used to hire staff and purchase the required equipment. The development of the Management and Marine Spatial Plan is also in process.
Blue finance also provides long term technical support to the company in order to improve both environmental management and entrepreneurial skills.
The company is guided by a stakeholder committee, of public and private citizens. Environmental, social and financial key performance indicators will be regularly audited.
RATIONALE: INADEQUATE MANAGEMENT AND FINANCING OF MARINE PROTECTED AREAS
Rationale: Coral reefs provide exceptional biodiversity and benefits to humans. However more than 60% of them worldwide are under immediate and direct threat (WRI, 2018). Local stressors such as unsustainable fishing, careless tourism, pollution, coastal development, and sedimentation are immediate threats to coral reefs and reduce their ability to withstand global pressures.
Well managed and financed Marine Protected Areas are considered to be among the most effective tools for reducing local threats on coral reefs and are the cornerstones of international efforts to conserve biodiversity. Yet MPAs face a broad range of challenges with many sites struggling to carry out their conservation mandate due in most part to a lack of adequate financing.
Challenge: International commitments seek a minimum 10% of marine and coastal areas to be effectively protected by 2020 – this remains to be achieved in most countries. Recent studies have reported that 65% of existing MPAs have inadequate budgets for basic management and 90% have inadequate staff capacity (linked to budgets). As a result, many MPAs fail to meet their social and ecological objectives, existing only on paper (paper parks). Rapid expansion of MPA networks without investment in capacity development and long-term operations will likely result in a proliferation of such. Innovative governance and financial mechanisms must be explored at all levels to provide adequate, flexible and timely funding for MPA operations.
MPAs and the sustainable tourism sector present a unique opportunity to “tap into” impact investment resources. Many of the problems and solutions are known, the capital is available and investors are in fact seeking sustainable projects.
Opportunity: Collaborative management partnerships are proven vehicles through which this challenge can be addressed, by creating a more investable (“bankable”) structure around MPAs. An innovative and scalable approach that leverages blended finance to strengthen natural resource management will be transformative for MPAs, and precedent-setting for marine conservation in the Caribbean (and worldwide).
COLLABORATIVE MANAGEMENT OF MARINE PROTECTED AREAS
Why collaborative management for MPAs?
In response to the widespread funding gap for protected areas, some governments have established collaborative management arrangements with non-public partners (for-profit and non-profit enterprises, NGOs, and community groups) for both individual and national protected area networks. Collaborative management structures vary from site to site: 1. governance and management responsibilities might be shared between partners (often referred to as co-management) 2. partners might assist the state with aspects of management without formal decision-making authority, or 3. the state might delegate full management authority to the partner.
These arrangements enable relevant ministries to maintain their core functions (e.g. law and compliance, planning and regulations) with no financial burden or transfer of property, while involving local partners in management with access to financial and scientific expertise.
These partnerships tend to take an entrepreneurial approach to protected area management, establishing revenue streams around ecosystem services provided – usually tourism and recreation.
MPAs under collaborative management also tend to have more inclusive decision-making arrangements, particularly when there is community participation, which contributes to positive social and ecological outcomes.
Additionally, non-public entities generally have greater flexibility and expertise to maximise revenues from their operations. For example, whereas government agencies are usually required to channel profits through a central treasury, non-public entities have more freedom to retain and reinvest profits, which gives managers an incentive for cost-saving, accountability, and improved management.
Non-public entities also have better access to diverse sources of capital. To finance the initial capital expenditure associated with establishment and infrastructure development, impact investment capital can be secured and blended with concessionary and donor funding as appropriate.
Given time, sustainable MPAs (financial and ecological) can be created. The renewable 10-year period for the agreement allows for this.
A proven track record
Although collaborative management is not always feasible or appropriate, there is a large body of evidence from both marine and terrestrial systems showing that it can redistribute the financial burden on states while facilitating long-term financial and technical support to deliver effective management. Many protected areas under collaborative management have succeeded in becoming financially sustainable, generating all or most of their revenues through tourism operations, while also demonstrating positive social and ecological impacts.
This has been seen most often in MPAs which charge fees for scuba diving and other water-based activities, such as the Bonaire National Marine Park, the St Lucia Marine Management Area or Belize Marine Protected Areas and those which generate revenues through ecotourism resorts, such as Misool Eco-Dive resort in Indonesia and Chumbe Island Coral Park in Tanzania.
ACTIVITIES IN THE MARINE PROTECTED AREAS
In each of our MPA projects, the protected area is expected to implement efficiently the following activities:
- Improvement & Monitoring the health of marine habitats (e.g. sustainable fisheries, water quality, tourism carrying capacity, reef restoration, etc.),
- Compliance & Enforcement (e.g. patrolling, zoning, etc.),
- Community engagement & Livelihood enhancement (e.g. awareness campaigns and creation of new income generating activities, mainly with fishers),
- Support to tourism activities (e.g. MPA branding, UW attractions, visitor centre, etc.),
- Management and Revenue mechanisms (e.g. marketing plan, user fee collection, etc.)