Bosnia and Herzegovina
Bosnia and Herzegovina is one of Europe’s most biodiversity-rich countries, located at the intersection of the Mediterranean, Alpine and Continental biogeographical regions. Its forests, rivers, wetlands, karst landscapes, grasslands and mountain ecosystems support exceptional biological diversity while providing essential services for water security, agriculture, forestry, energy, tourism and local livelihoods. Protecting this natural capital is therefore important not only for conservation, but also for sustainable economic development and climate resilience.
Yet biodiversity faces growing pressures from habitat degradation, land-use change, pollution, unsustainable resource use, invasive alien species and climate change. Financing an effective response is particularly complex because responsibilities for biodiversity and natural resource management are distributed across multiple levels of government. Biodiversity finance is consequently spread across public budgets, environmental, water and forestry funds, fees and charges, agricultural and rural development programmes, protected-area revenues and international assistance, making it difficult to systematically identify, track and optimize financial flows for nature.
UNDP BIOFIN is supporting Bosnia and Herzegovina to address these challenges by building the country’s first comprehensive evidence base for biodiversity finance. Policy and Institutional Reviews and Biodiversity Expenditure Reviews have been completed for both the Federation of Bosnia and Herzegovina and Republika Srpska, mapping biodiversity-related institutions, policies, financing mechanisms, revenue streams and public expenditure and identifying opportunities to make existing finance work more effectively for nature.
Building on this foundation, BIOFIN is developing Financial Needs Assessments and Biodiversity Finance Plans to quantify financing needs and gaps and prioritize practical finance solutions. This process will help Bosnia and Herzegovina mobilize additional public and private resources, improve the effectiveness of existing financial flows and establish a more strategic and sustainable approach to financing its national biodiversity priorities and commitments under the Kunming–Montreal Global Biodiversity Framework.
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Finance solutions
Building on the Policy and Institutional Reviews and Biodiversity Expenditure Reviews, UNDP BIOFIN has identified a portfolio of potential finance solutions to strengthen biodiversity finance in Bosnia and Herzegovina. These solutions will be further assessed and prioritized through the Financial Needs Assessments and Biodiversity Finance Plans, with a focus on making existing financial flows more effective, strengthening public financial management and mobilizing additional investment for biodiversity.
Finance Solution 1: Biodiversity Budget Tagging
Develop a biodiversity budget tagging system to systematically identify, track and report biodiversity-related expenditure across entity, cantonal and local budgets. The mechanism would improve transparency and expenditure monitoring while helping decision-makers understand how public resources contribute to biodiversity priorities and where financing gaps remain.
Finance Solution 2: Strengthening Environmental Protection Fund Financing
Strengthen biodiversity financing through Environmental Protection Funds by improving funding criteria, project selection, monitoring and evaluation and increasing support for biodiversity-positive investments. The solution would help direct existing environmental finance more effectively toward ecosystem restoration, habitat conservation and sustainable biodiversity management.
Finance Solution 3: Greening Agricultural Subsidies
Integrate biodiversity criteria into agricultural support programmes and public subsidies to encourage more sustainable farming and land-management practices. Potential measures include ecological conditionality and incentives for grassland conservation, organic production and other biodiversity-friendly practices, helping redirect existing agricultural finance toward more positive outcomes for nature.
Finance Solution 4: Payments for Ecosystem Services
Assess and develop opportunities for Payments for Ecosystem Services (PES) that provide financial incentives for maintaining and restoring valuable ecosystem services. Potential applications include sustainable forest management, watershed protection and ecosystem restoration, creating opportunities to generate additional income for landowners and local communities while financing conservation.
Finance Solution 5: Reforming Biodiversity-Related Subsidies and Fiscal Instruments
Review environmentally harmful subsidies and existing fiscal instruments—including concession fees, water and forestry fees, environmental charges and compensation payments—to identify opportunities for reform. The solution aims to reduce financial incentives that contribute to biodiversity loss while redirecting public financial flows toward biodiversity-positive activities.
Finance Solution 6: Strengthening and Reinvesting Biodiversity-Related Revenues
Improve the collection, management and strategic reinvestment of revenues generated through natural resource use, concession and environmental fees, protected areas and other biodiversity-related sources. Strengthening the link between revenue generation and conservation investment could provide more predictable and sustainable financing for biodiversity.
Finance Solution 7: Mobilizing Private Finance for Biodiversity
Explore mechanisms to increase private-sector investment in biodiversity through corporate partnerships, voluntary contributions, sponsorships and other innovative financing approaches. The solution aims to complement public resources by creating opportunities for businesses and financial actors to contribute to conservation, ecosystem restoration and nature-positive investment.
Key results
Building Bosnia and Herzegovina’s First Biodiversity Finance Baseline
UNDP BIOFIN has established Bosnia and Herzegovina’s first comprehensive evidence base for biodiversity finance through Policy and Institutional Reviews (PIRs) and Biodiversity Expenditure Reviews (BERs) for both the Federation of Bosnia and Herzegovina and Republika Srpska. The assessments mapped biodiversity-related policies, institutions, financing mechanisms, revenue streams and public expenditure, providing a stronger basis for evidence-based policy, budgeting and investment decisions.
Tracking Biodiversity Expenditure Across Sectors
The Biodiversity Expenditure Reviews analysed biodiversity-related public expenditure for 2022–2024, demonstrating that biodiversity finance extends well beyond the environmental sector to agriculture, forestry, water management, spatial planning and other areas. The analysis also identified challenges in expenditure classification, monitoring and reporting and highlighted opportunities to introduce biodiversity budget tagging and strengthen programme-based budgeting.
Quantifying Biodiversity Financing Needs and Gaps
Building on the PIR and BER findings, UNDP BIOFIN is developing comprehensive Financial Needs Assessments for the Federation of Bosnia and Herzegovina and Republika Srpska. The assessments will quantify the resources required to achieve biodiversity priorities, identify financing gaps and help prioritize investments with the greatest potential to contribute to national biodiversity targets.
Identifying Opportunities to Make Finance Work Better for Nature
BIOFIN’s analysis has identified a broad range of opportunities to improve the effectiveness of existing biodiversity finance and mobilize additional resources. These include biodiversity budget tagging, strengthening financing mechanisms through Environmental Protection Funds, biodiversity-positive agricultural incentives, Payments for Ecosystem Services, improved management and reinvestment of revenues from environmental, water, forestry and concession fees, and other fiscal and innovative finance mechanisms. These options will inform the selection of priority finance solutions through the Biodiversity Finance Plan process.
Developing Bosnia and Herzegovina’s First Biodiversity Finance Plans
UNDP BIOFIN is translating the analytical findings into Biodiversity Finance Plans for the Federation of Bosnia and Herzegovina and Republika Srpska. The Plans will prioritize feasible finance solutions and provide a strategic framework for mobilizing, managing and monitoring biodiversity finance. They will also support stronger coordination across environment, agriculture, forestry, water management and public finance and help align investment with the National Biodiversity Strategy and Action Plan and the Kunming–Montreal Global Biodiversity Framework.