More than 60% of coral reefs globally are under immediate and direct threat (WRI, 2018). With some 500 million people depending directly on coral reefs for food and income, these populations are particularly vulnerable to reef-loss (‘poverty trap’).
Well-managed and financed Marine Protected Areas (MPAs) are the cornerstones of international efforts to “replenish biodiversity and nourish the growing human population” (IUCN, 2018). Benefits that flow from the resulting, healthier ecosystems include an enhanced food supply, fishing incomes, opportunities for nature tourism businesses, shoreline protection, and greater resilience to climate change. As a result, there is a call for increased MPA coverage with international agencies calling for 30% by 2030.
Benefits that flow from the resulting, healthier ecosystems include an enhanced food supply, fishing incomes, opportunities for nature tourism businesses, shoreline protection, and greater resilience to climate change.
However, MPAs are often undermined by a broad range of challenges, many of which are due to the cross-cutting issue of inadequate financing, which is reported by >60% of MPAs (Gill et al; 2017). Piecemeal, insufficient, and short-term funding has largely been provided to date by public sources and development finance institutions that cannot meet the needs of many MPAs. They exist as “paper parks” unable to fulfill their environmental, social, and economic objectives. The necessary, rapid expansion of MPAs, without sufficient investment, is likely to exacerbate this situation.
Public and development finance is rapidly becoming a scarce resource and the mobilization of additional funds from the private sector into marine conservation is indispensable for the meeting of financing needs related to Agenda 2030. Impact Investing can assist with closing the conservation financing gap. However, investing still carries a whiff of negativity in the conservation world, and this alongside inadequate knowledge (from both sides – conservation and finance) hinders the ability of MPAs to tap into this resource.
Collaborative management or Public-Private Partnership (PPP) agreements that create a more ‘bankable’ structure around MPAs offer a way forward for some MPAs, as illustrated recently for Turneffe Atoll MPA in Belize, which received an investment of US$ 1.2 million. This investment is the result of a collaboration between an impact investor, international conservation NGOs, and the Ministry of Blue Economy of Belize. The facility, structured by Blue Finance — a specialized, impact investment project developer for MPAs — allows the Marine Protected Area’s co-manager, Turneffe Atoll Sustainability Association (TASA), to implement a number of sustainable, revenue-generating initiatives and enhance protection of the 132,000 hectares of coral reef, mangrove, and seagrass ecosystems.
The Turneffe Atoll Marine Reserve is managed in a collaborative structure between the Ministry of Blue Economy of Belize and TASA through a public–private partnership agreement. The approach enables relevant government ministries to maintain core functions — such as approval of MPA management plans, enforcement of regulations and fisheries management — involves local communities in management and attracts financial and scientific expertise.
The facility allows the Marine Protected Area’s co-manager to implement a number of sustainable, revenue-generating initiatives and enhance protection of the 132,000 hectares of coral reef, mangrove, and seagrass ecosystems.
The facility blends a concessional loan (junior debt) from impact investors alongside catalytic grant funding provided by international NGOs. The catalytic grant supports improvement in the design and execution of the solution, strengthening environmental and social positive impacts, and reducing risks.
The project enhances TASA’s financial sustainability, improves the MPA visitor experience, generates blue carbon credits, builds up a sustainable fishery sector, and contributes to the effective long-term management of the Turneffe Atoll Marine Reserve. The investment will have a positive impact on the local economy, including coastal fisher communities.
Many MPAs that are managed this way are financially sustainable, generating most or all revenue through sustainable, nature-based tourism and delivering positive social and ecological impacts. Examples include Tanzania’s Chumbe Island Coral Park and the Bonaire National Marine Park in the Caribbean. The collaborative management model also makes sense for impact investors, who are required to establish clear and transparent revenue models and ways to measure impact.
From a government point of view, the approach provides empirical evidence of how non-public funding and collaborative management can become part of the financing options for a country’s MPA network, reducing the financial burden on public budgets.
Solutions like this one are not suitable for all MPAs and precautions must be taken in the early stages to balance conservation and revenue needs. The scheme is limited to MPAs with tangible business models and a specific range of “boutique” impact investors who are able to provide patient capital, accept the small size of projects, and absorb transaction costs.
In spite of this, the growing number of collaborative management agreements for MPAs, the further development of entrepreneurial opportunities related to marine conservation, as well as the diversification of revenue sources create promising prospects for the upscaling of the approach.