Finalists of the First Round of the CFA Incubator

The following finalists received mentorship support and grant funding:

Investment in Coral Reefs for Coastal Protection - Coenostrum Inc., Blue Finance - Investment mechanism for ecosystem service providing coastal protection for hoteliers.

Rubber Trust Fund - Halcyon Agri Corp Ltd - WWF-US - Designing a Rubber Trust Fund that seeks to offer transparent, trustworthy and efficient financial solutions to make rubber more sustainable

Community Reef and Forest Bank - GreenFi Systems Limited - Creation of community-owned banks in East Africa

Kenyir For Life - Protecting the Kenyir Watershed through Sustainable Financing Mechanisms - Rimba - Development of sustainable financing mechanisms to support the conservation of the Kenyir watershed in Malaysia.

Biodiversity Lending Instruments for Coastal Restoration and Protection - Natrx, Inc. - Providing dual-purpose restoration and asset protection solutions for coral resilience.

The following finalists received mentorship support:

Blue Buyout Fund - IUCN and Conservation Capital - Addressing the lack of adequate exist opportunities and other challenges associated with early stage venture funding in the blue economy in Africa.

Biodiversity outcomes in hands of coastal communities in Chile - Capital Azul - Establishment of voluntary marine coastal reserves in coastal Chile.

Adapting PACE to finance conservation - Possible Planet - Identification of projects, properties, lenders and conditions conducive to using PACE and PACE-like structures to regenerate ecosystems.

Carbon Yield Fund - Carbon Yield - Facilitating access to finance and providing compensation for farmers that support the adoption of organic practices and soil carbon drawn down within a regenerative growing system.

Tax-Free Tourism for Protected Area Finance - Allen Putney WWF-US - Using a CTF as an intermediary between national tax authorities and international travelers to unlock financing for conservation activities.

Retrieving ghost fishing gear in Mexico: a circular economy solution to plastic pollution - Establishment of a nation-wide ghost gear retrieval program funded from sales of retrieved derelict fishing gear to plastic recycling companies.

Digital Tree Wallet Mechanism - Greenstand - Allowing the purchase and trading of environment services through the digitization of trees.

Building A Conservation Due Diligence Standard -Conservation Alpha - Development of a conservation-focused due diligence standards de-risk investments in conservation.

Land Restoration Exchange - Rejuvenate Umhlaba - Establishment of an exchange for facilitation corporate investment and donations for land restoration.

HORUS - A Boat Sharing Marketplace for Diving Tour Operators - Conictus - Establishment of a dive boat sharing marketplace in Egypt.

Detailed project descriptions

Short Decription:

The beaches of Barbados, like many small island developing states (SIDS) suffer from coastal erosion, caused in part by coral reef deterioration. This impacts the attractiveness of beaches which is a major pull for the tourism driven economy. Hoteliers have already proven that they are willing to pay for solutions to coastal erosion affecting their business. Solutions that improve coral reef health could not only assist with maintaining beach width but also with other tourism-based Ecosystem Services – such as snorkeling and diving.

This project seeks to develop a sensible investment mechanism for hoteliers to maintain and enhance these ecosystem services (ES). Based on state-of-the-art scientific knowledge to identify reefs where these ES are maximized, this mechanism will allow the hoteliers to contribute to the financing of reef conservation and restoration activities. The goal of the project is to test a sustainable finance mechanism that will be used to improve the health of coral reefs as well as the structural ability of the reef to protect shorelines (ES of coastal protection), scenic beauty and fish biomass.

Short Description:

The rubber supply chain is broken: Global demand for natural rubber is constantly rising to support the world’s increasing mobility and medical needs, yet most of the 6 million farmers who produce 85% of the world’s rubber live in poverty. Market fluctuations in price often result in negative impacts on farmers and the environment. At low prices, farmers struggle to break even. At high prices, valuable natural ecosystems are at risk of conversion as farmers switch to more lucrative crops. How do we drive sustainability in the rubber supply chain so that carbon stocks and biodiversity are protected while small farmers improve their livelihoods?

With support from Conservation Finance Alliance (CFA) experts, WWF and Halcyon Agri will design a Rubber Trust Fund (RTF) that seeks to offer transparent, trustworthy, and efficient financial solutions to: (1) farmers seeking to improve their productivity and livelihoods sustainably; and (2) rubber supply chain actors developing and implementing tools to make rubber more sustainable.

This project will develop a model for a first-of-its-kind financial mechanism for a global commodity. The project team will engage the multi-stakeholder Global Platform for Sustainable Natural Rubber (GPSNR) to leverage GPSNR’s technical and financial reach throughout rubber’s production, processing, and trade. The mechanism will be designed to engage the entire sector in addressing supply chain risks and impacts with investments that may include the matching of bi- and multi-lateral developmental aid with mandatory or voluntary sustainability premiums collected through an innovative, GPSNR-endorsed rubber e-trade platform.

Short Description:

Village Savings and Loans are local community owned “banks” that are shown to produce increased access to finance, enhance local investment, and can be tied to effective natural resource management.  Communities which depend on nature and the organizations which support these communities often lack effective and appropriately designed and affordable tools to support local ecosystem management. Greenfi has developed a smartphone and tables application (with supporting off-line system) that facilitates the establishment and management of Village Savings and Loans tied to sound environmental management – creating community reef and forest banks.  Greenfi is a team of experienced community-based natural resource practitioners, who provides highly effective and cost-efficient tools to NGOs and companies to help establish and manage community reef and forest banks. With these tools, communities supported by NGOs or companies, set up community-owned banks, from which loans to community members are issued. Loan terms include requirements for nature management, for example planting of mangroves or protection of reefs. When community members repay loans and protect the environment, they receive an eco-credit score, which qualifies borrowers for higher levels of credit and lower rates of interest. The Greenfi approach is founded on the recognition that credit systems can be blind to natural resource overuse, and only by incorporating environmental requirements into credit terms, can we create systemic incentives for environmental restoration, rather than degradation.

Greenfi Systems Limited is an East African operating financial technology (fintech) start-up company. They are building mobile money-integrated management information systems which power the scaling of the community eco-credit movement.

Short Description:

The Terengganu State in peninsular Malaysia contains an essential watershed with a large reservoir, hydro-electric power that supplies Kuala Lumpur and other users, and a spectacular forest estate that contains rich biodiversity including diverse birdlife, tigers, and more.  Some of this forested landscape is adjacent to Taman Negara – Malaysia’s best known and largest national park.  In 2018, Terengganu State gazette 75,000 acres of the watershed as Kenyir State Park, demonstrating political will and commitment towards sustainability. There is, however, a need to secure an additional ~220,000 acres of biodiversity-rich and ecologically sensitive forests, currently classified as production forest reserves (designated for logging), within Kenyir watershed. Towards this objective, the State, in 2019, endorsed the formation of the Green Financing Task Force to explore alternative revenue streams to secure long-term financing through improved forest management strategies.  Identifying and establishing diverse revenue streams from standing forests can help reduce deforestation and forest degradation. The ‘Kenyir For Life’ project, led by the local NGO Rimba, aims to help Terengganu State generate revenue from standing forests in order to promote sustainable management of the Kenyir watershed and maintain essential biodiversity and ecosystem services.

Short Description:

Demand for natural capital investment opportunities has exploded in recent years, yet investors lack a sufficient supply of large high-quality bond and other debt offerings directly linked to conservation outcomes. On the other hand, planners and ecologists struggle to obtain financing to protect communities and natural assets in ways that assure long-term ecological resilience.  Natrx has been an effective provider of dual-purpose restoration and asset protection solutions for coastal resilience and will work with the CFA to increase the use of these holistic approaches for both public and private coastal management.  This will be achieved through a combination of two related solutions:

1) a data tool that assists land owners and managers to compare costs and benefits of alternative green / grey and hybrid solutions

2) developing a set of situational GAAP heuristics that can be employed by companies, investors, and governments to facilitate financing large scale nature-based coastal resilience solutions. 

The initial focus for these solutions will be waterfront ecosystems in southern North America and the global south with proven nature-based asset protection value and established methods for autonomous monitoring (oyster reefs, coral reefs, mangroves, etc.).  These solutions have very attractive 5-year cash flow streams when compared to traditional, often destructive, infrastructure alternatives.

Short Description:

Many investors state that they would like to invest more capital in nature-based instruments and companies but generally agree that one of the main issues is the lack of bankable projects.  This is especially true for blue economy investments. Venture capital and other early stage investors are known to be some of the best placed actors to structure and develop a sector by providing the necessary equity investments as well as the indispensable expertise, experience and network to make pilot projects become thriving and successful businesses.  Encouraging more early stage venture funding in the blue economy would greatly increase the options for larger investments in the future.  One barrier to increased venture funding is the lack of adequate exit opportunities (as in many countries in Africa). In this project, IUCN and Conservation Capital (CC) propose the development of a Blue Buyout Fund (BBF), dedicated to enhance the development of blue and inclusive entrepreneurial businesses in Africa by catalyzing venture capital investments and providing technical assistance support.  The Blue Buyout Fund is intended to respond to the challenges described above by providing potential exit opportunities to venture investors, therefore reducing the barriers to invest into the sustainable blue economy sector and encouraging more experimentation.

Short Description:

Chile is among the ten most underfunded countries for biodiversity conservation and less than 1% of its vast coastline is formally protected. Leveraging small-scale fishing organizations’ ability to legally hold exclusive access rights to near shore areas, and anticipating a pending biodiversity offset policy, Capital Azul is establishing voluntary marine coastal reserves that are 1) community enforced, 2) independently certified and monitored, 3) providing benefits to the community, and 4) potentially financed with biodiversity offsets and other conservation finance mechanisms. This project will explore the potential long-term financing options for these locally-managed marine refuges in coastal Chile.

Short Description:

The concept, PACE4Nature, is based on an existing successful model, Property Assessed Clean Energy (PACE). PACE was heralded as one the top 20 world-changing idea of the 21st century, with over $6 billion in private capital already invested in solar, energy efficiency and resiliency measures in buildings in the US.  PACE4Nature will be built around projects that generate predictable revenues sufficient to cover loan payments – ideally projects that are cashflow positive from the start. The project will survey the existing attempts to apply PACE-like concepts to conservation, develop illustrative or actual scalable models with input from stakeholders, and identify challenges that need to be resolved, including potential legislative issues. The outcome will be identification, and in some cases, detailed profiles, of candidate projects, properties, lenders and conditions conducive to using PACE and PACE-like structures to regenerate ecosystems.

Short Description:

Carbon Yield envisions an agricultural economy where farmers are sustained by how well they steward working lands. The economics of commodity agriculture have been obliterated by degraded soil, low crop prices, and increasing input costs. Farmers are desperate for alternative models. At the same time, we cannot merely address climate change by slowing emissions, we need scalable solutions that return carbon to the land where it originated. Carbon Yield facilitates access to finance for farmers that support the adoption of profitable, organic practices and compensate farmers for the soil carbon drawn down within a regenerative growing system.

Tax-Free Tourism for Protected Area Finance

Proponent:

Allen Putney, WWF-US

Short Description:

While the growth of protected area systems has accelerated worldwide in recent years, government funding has lagged and many protected areas remain unmanaged or poorly managed.  Private Conservation Trust Funds (CTFs) can be key institutions for addressing the funding gap and stimulating a complementary increase in direct public funding by leveraging innovative conservation finance mechanisms, international assistance, and donations.  In this project, a governmental scheme is proposed to refund Value-Added Taxes (VAT) paid by international travelers on tourism services whereby a Conservation Trust Fund (CTF) is authorized to affect the refund transaction and, as part of the process, deduct fees for (1) its operational costs, and for (2) financial support to protected areas.  Through this scheme the government designates the CTF to serve as an intermediary between national tax authorities and international travelers to refund the VAT paid on in-country tourism services (hotels, restaurants, tours, car rentals, etc.).  As part of the transaction, the fund would deduct a fee to support protected areas, as well as the operational costs of the CTF. For a country with around 5 million international visitors per year and a 20% VAT rate, it is estimated that the “Tax-free Tourism for Protected Area Finance” concept would raise about US$ 100 million per year.  A cost-benefit analysis, communications plan, and promotional materials are useful tools for informing lobbying efforts for inclusion of this financial mechanism in relevant tax legislation and/or regulations.

Retrieving Ghost Gear in Mexico: A Circular Economy Solution to Plastic

More than 640,000 metric tons of ghost fishing gear enter our oceans each year, making up 10 per cent of all plastic waste in the marine environment. At the same time, nylon manufacturers such as Aquafil and others have developed technology that can transform ghost fishing gear into regenerated nylon (e.g. Econyl).  We propose to establish a nation-wide ghost gear retrieval program in Mexico funded with the proceeds generated from the sale of the retrieved derelict fishing gear to plastic recycling companies. To achieve this, we will establish a hybrid non-profit / social enterprise to implement the ghost fishing gear retrieval projects and sale of ghost fishing gear and other waste materials. Our long-term goal is to scale up this project to other plastic products and ultimately establish a processing facility to transform marine waste plastics in Mexico.

Project Description

A struggling mother, living below the poverty line in Sub-Saharan Africa with few opportunities for income, has now found a way to support her family through reforesting biologically depleted landscapes. In the past, she had been surviving on a small cornfield; now, she has substantially increased her income by growing native forests and using a mobile app to track trees that she plants and grows. Greenstand is launching a wallet system to integrate with its existing Treetracker app that allows entities (businesses, organizations, or individuals) to purchase and trade the environmental services in the form of digital tokens provided by trees. This effort empowers people of severely impoverished regions to rebuild degraded landscapes, restore nature, build ecological wealth, and increase economic stability with a focus on areas of degraded landscapes and buffer zones around nature reserves and biodiversity hotspots.

Short Description:

Biodiversity conservation struggles with significant funding shortfalls despite major global losses in biodiversity; the conservation sector needs to: a) become more efficient with existing finances; and b) develop new investment opportunities. Deploying investment capital to the conservation sector is often limited by a lack of investable projects and organizations.  Taking ill-informed investment risks may lead to ineffective and inefficient expenditure, resulting in failed outcomes and deterring additional private and philanthropic investment. This project seeks to develop a conservation-focused due diligence standard to assess and potentially accredit organizations (such as PA Agencies) as a means of guiding and de-risking investments for a broad range of financiers from blended finance to private capital markets.  An accepted conservation due diligence standard, properly used, will allow impact investors, corporates, DFIs and donors to better understand and rationalize trade-offs in their decisions. Our multi-disciplinary project team brings due diligence best practices drawn from the conservation, investment banking, management consultancy, and ESG sectors, as well as experiences from launching a Conservation Impact Bond. Through the CFA Incubator, Conservation Alpha will work with our partners to develop an implementation plan (to inform the next product development stage) including the framework template for a conservation-focused due diligence standard based on a rigorous market survey.

Short Description:

In Zimbabwe at least 90% of arable lands in communal areas are degraded with yields as low as 1 tonne per hectare where they could harvest at least 4 tonnes per hectare. This degradation and lack of productivity results in very poor communities. Rejuvenate Umhlaba is establishing an exchange for facilitating corporate investment and donations for land restoration.  The organization will initially target mining and other companies that have a net negative impact on the land. These companies will buy a share which entitles them to 1 hectare of land rehabilitated by credible restorers. Because the land restoration is localized, companies know where their money is invested, and they can see the work they are supporting and measure their impact on the local communities. Rejuvenate Umhlaba is currently raising USD250,000 for a pilot program to rehabilitate 100 hectares of degraded communal land supporting at least 500 smallholder farming households.

HORUS - A boat sharing marketplace for diving tour operations

Proponents:

Conictus

Short Description:

This project will establish a dive boat sharing marketplace enabling a per seat booking instead of sending dive boats out with 25% utilization capacity. The result of boat sharing would include cutting operation costs, reducing the industry’s carbon footprint and reducing the impact of boat moorings on the reef.  Monetization is based on a SaaS Model and this offering will be the initial tool for a larger dive tourism interface application that improves the diver’s experience and facilitates a dive shop’s operations and profitability.

Questions?

Please send a message to incubator@cfalliance.org