Driving the blue economy

News | July 2023

UBS Optimus Foundation invests in the enhancement of Marine Protected Areas in The Philippines through Blue finance

Blue finance and UBS Optimus Foundation (“the Foundation”) have announced a new partnership which will see the Foundation make its first marine-focused impact performance loan. By providing up-front and early-stage blended capital of 600,000 US dollars, the Foundation is empowering the Marine Protected Area (MPA) network in The Philippines to implement several blue economy revenue-generating initiatives whilst focusing on protecting and regenerating coral reefs, increasing marine biodiversity, and enhancing livelihoods.

Blue finance executive Director and co-founder, Nicolas Pascal, said: “We believe in nature conservation with sustainable, long-term business models to address the biodiversity crisis in the long term. This innovative approach is transformative for MPAs and is setting a precedent for impact investment in marine conservation and economic development globally. While more than 60% of coral reefs worldwide are under immediate threat, we have shown that MPAs are one of the best tools we have for protecting marine biodiversity. Successful MPAs are key contributors to a more climate-change resilient economy.”

UBS Optimus Foundation CEO, Maya Ziswiler, added: “We are thrilled to partner with Blue finance on our first investment focusing on marine ecosystems. We are strong proponents of their holistic approach, which supports biodiversity and climate mitigation while improving the livelihoods of local communities. Our impact loan to MPA projects in The Philippines showcases the financial viability of what will be a self-sustaining conservation model and highlights the impact potential of Blue finance’s approach.”

In 2020, Blue finance created the Blue Alliance NGO with the support of the United Nations, the Global Fund for Coral Reefs (GFCR) and the International Union for Conservation of Nature (IUCN). Blue Alliance manages the MPA network and related projects alongside local authorities in North Oriental Mindoro. This island province in the western part of The Philippines encompasses the Verde Island Passage – recognised as a global shore fish biodiversity hotspot, this ocean channel supports more than 2 million people. The network currently comprises 12 MPAs which together protect some 70km of coastline and 52km2 of coastal marine ecosystems, including a UNESCO biosphere reserve. Currently, 30 rangers, community officers and managers are employed to implement core MPA activities.

This funding will allow Blue Alliance to enhance the management and protection of coral reef ecosystems, develop sustainable revenue mechanisms for the MPA network and contribute to the achievement of multiple UNDP Sustainable Development Goals (SDGs), namely 1, 5, 8, 13, 14 and 17.

Blended finance unlocks commercial capital by combining it with philanthropic capital to improve project design and execution, enabling the projects to meet the investor’s criteria. The impact loan will be repaid through tangible revenue streams such as nature-based ecotourism, blue carbon credits from mangrove conservation and small-scale aquaculture projects. The interest rate is linked to social and environmental performance – the greater the impact, the lower the interest rate.

Impact will be measured using recognised international standards for ecosystem integrity, species protection, livelihood outcomes including job creation, as well as  gender equality  and overall MPA management effectiveness. The funding will also support the development of innovative tools to measure impact which can be applied to other MPAs in the future.

About Blue finance

Blue finance (Bf) is a social enterprise that develops solutions for the effective management and sustainable financing of Marine Protected Areas. We have forged strong partnerships with Governments and more than 30 international conservation partners and financial institutions to cover and address all the needs of MPAs. Bf works closely with the Global Fund for Coral Reefs (GFCR), the Ocean Risk and Resilience Action Alliance,  the Blue Natural Capital Financing Facility (BNCFF) and the Global Eba Fund-IUCN (International Union for Conservation of Nature) in the Philippines.

About Blue Alliance

Blue Alliance is an NGO founded by Blue finance in 2020 for the purpose of managing the North Oriental Mindoro MPAs in The Philippines. As co-managing entity alongside the local governments, Blue Alliance strengthens the enforcement of the marine reserve management plans, conducts research efforts to inform management, develops education/outreach of the relevant stakeholders and implements revenues associated with the blue economy such as eco-tourism, blue carbon credits and small-scale aquaculture activities. Read more about Blue Alliance.

About UBS Optimus Foundation

UBS Optimus Foundation is an independent philanthropy associated with a global wealth manager, pioneering innovative ways to tackle some of the world’s most pressing social- and environmental problems. It is a leader in social finance, testing and proving new tools in support of education, health, the environment, and child protection. It applies an investment-based philosophy and specializes in scalable, evidence-based approaches like outcomes-based finance and blended finance. UBS Optimus Foundation operates in a worldwide network of partners and philanthropists who seek to drive systemic change on a global scale. Read more about UBS Optimus Foundation: www.ubs.com/optimus