NEWS
Increasing Biodiversity Finance: Moving the needle in Latin America
Last September, a significant event unfolded in Panama, where representatives from 10 countries convened for the 9th Latin American and…
Panama
Panama is one of the world’s most biodiverse countries, with terrestrial, freshwater, coastal and marine ecosystems that support water security, climate resilience, livelihoods and economic development. The country is advancing ambitious biodiversity commitments through its updated National Biodiversity Strategy and Action Plan, the Panama Nature Pledge and other national initiatives. Meeting these ambitions will require not only identifying conservation priorities, but also mobilizing and aligning the financial resources needed to implement them.
Panama has already developed an enabling environment for sustainable finance through mechanisms and policy instruments including environmental trust funds, climate budget tagging and the Sustainable Finance Taxonomy. These efforts provide a foundation for integrating biodiversity more systematically into public finance, private investment and national development planning.
UNDP BIOFIN is supporting Panama to strengthen this foundation by building the evidence needed for biodiversity finance decision-making. Through the Policy and Institutional Review, Biodiversity Expenditure Review and assessment of biodiversity-related subsidies and incentives, BIOFIN is examining existing financial flows, policies, institutions and financing mechanisms and identifying opportunities to improve the effectiveness and alignment of biodiversity finance.
This evidence will inform the Nature Finance Assessment and Panama’s first Biodiversity Finance Plan, which will identify and prioritize practical finance solutions and implementation pathways. Working closely with the Ministry of Environment and other national partners, the process will connect biodiversity and conservation priorities with public and private finance, supporting implementation of the NBSAP and Panama’s broader sustainable development objectives.
Finance solutions
PANAMA NATURAL FINANCE FOR PERMANENCE (PFP)
This finance solution supports the long-term financing of Panama's protected areas and priority biodiversity landscapes through the Panama Natural Finance for Permanence initiative. It combines public, private and philanthropic resources to secure sustainable funding for biodiversity conservation, ecosystem restoration and community development. BIOFIN contributes analytical evidence that supports financial planning, investment prioritization and the identification of financing pathways aligned with national biodiversity priorities.
STAGE: Design and early implementation.
LEAD AGENCY: Ministry of Environment (MiAMBIENTE), Panama Natural Fund, Enduring Earth, The Pew Charitable Trusts, Fundación Natura and UNDP.
RESULTS-BASED PAYMENTS FOR FOREST CONSERVATION
This finance solution strengthens Panama's participation in results-based payment mechanisms linked to forest conservation, carbon sequestration and ecosystem services. These mechanisms mobilize international climate finance while generating co-benefits for biodiversity conservation, sustainable forest management and local communities.
STAGE: Implementation.
LEAD AGENCY: Ministry of Environment (MiAMBIENTE), UNDP and international climate finance partners.
BIODIVERSITY-RELATED SUBSIDIES AND INCENTIVES REFORM
This finance solution promotes the gradual reform and reorientation of biodiversity-related subsidies and incentives to reduce negative impacts on biodiversity while strengthening incentives that encourage sustainable production, ecosystem conservation and nature-positive investments.
STAGE: Design.
LEAD AGENCY: Ministry of Economy and Finance (MEF), Ministry of Environment (MiAMBIENTE), sectoral ministries and UNDP BIOFIN.
SUSTAINABLE FINANCE FOR BIOECONOMY DEVELOPMENT
This finance solution promotes investment in biodiversity-based value chains through the implementation of Panama's National Bioeconomy Strategy. It seeks to mobilize public and private finance to support innovation, sustainable enterprises, bio-based products and nature-positive economic opportunities.
STAGE: Design.
LEAD AGENCY: Ministry of Environment (MiAMBIENTE), SENACYT, CAF, IICA, Ministry of Commerce and Industries (MICI) and strategic partners.
Key results
BIOFIN Panama is expected to deliver the following key results:
- Establish a comprehensive evidence base for biodiversity finance through the completion of the Policy and Institutional Review (PIR), the Biodiversity Expenditure Review (BER) and the assessment of biodiversity-related subsidies and incentives.
- Support the development of Panama's first Nature Finance Assessment (NFA) and Biodiversity Finance Plan (BFP), providing the analytical foundation for identifying priority finance solutions, investment opportunities and implementation pathways aligned with national biodiversity priorities.
- Strengthen the integration of biodiversity finance into national planning and policy processes, including the implementation of the National Biodiversity Strategy and Action Plan (NBSAP), the Panama Nature Pledge and the Panama Natural Finance for Permanence (PFP) initiative.
- Support the identification, design and implementation of innovative biodiversity finance solutions, including environmental trust funds, results-based payments, payments for ecosystem services, bioeconomy financing and other public and private financing mechanisms.
- Strengthen institutional coordination among government agencies, development partners, financial institutions and the private sector to improve biodiversity finance governance, investment planning and resource mobilization.
- Improve the effectiveness, transparency and coherence of biodiversity-related public expenditure, finance mechanisms and incentive frameworks by providing evidence-based recommendations for policy and financial decision-making.
- Strengthen the link between biodiversity conservation planning and finance planning by supporting the identification of financing needs associated with national conservation priorities, including the update of action plans for priority species and other biodiversity conservation initiatives.
Contribute to mobilizing additional public and private financial resources for biodiversity conservation while supporting Panama's implementation of the Kunming-Montreal Global Biodiversity Framework and the achievement of its national biodiversity targets.