BIOFIN Catalogue of Finance Solutions

BIOFIN Catalogue of Finance Solutions

The biodiversity finance landscape is changing. Both domestic and international financial flows have grown and the range of financing instruments, providers and delivery mechanisms now available is significantly wider than ever before. This online “catalogue” is a comprehensive list of these instruments, tools and strategies that are applicable to the field of biodiversity finance. Each catalogue entry is a mechanism or “finance solution” and includes a brief description as well as links to guidance material or case studies.

The searchable catalogue below provides a listing of all solutions profiled. Solutions can also be searched by the financial result they produce, the financial instrument they rely upon, whether they are public or private finance, and the economic sector in which their use is most prevalent.

This finance solutions catalogue is open source and is available for anyone to use. BIOFIN encourages the use of the catalogue and the sharing of it on other websites. We request that any other organisation sharing or using elements from the catalogue appropriately acknowledge UNDP-BIOFIN and alert us to its use by sending an email to BIOFIN@undp.org. We also request that you include a link to this page as the original source of the biodiversity finance solutions catalogue.

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Finance Solutions

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68 Results

Enhance public budget execution

Measures promoting quality spending of committed funds and removing related obstacles to effective spending. Effective budget execution (also termed delivery) is a percentage of annual public budget allocations that are actually spent by government agencies and can vary from as low as 40 percent to as high as 90 percent. Related obstacles are often due to delays in financial flows or capacity constraints. Incentives (e.g. staff incentives) and support (i.e. additional capacity) can be provided to increase the delivery. While not specific to biodiversity, these measures can and should be considered by conservation organizations.

Result

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Type

Fiscal

Any solution that involves a fiscal reform, i.e. changes in taxation or the modification of a subsidy's regime.

Fiscal

Regulatory

Any solution that involves a regulatory reform, i.e. the imposition of a certain behaviour through the law or a regulation.

Regulatory

Public/Private
Public

Public

Sector

Agriculture

Agriculture

Energy

Energy

Finance

Finance

Fishing

Fishing

Forests

Forests

Infrastructure

Infrastructure

Manufacturing

Manufacturing

Mining

Mining

Other

Other

Protected Areas

Protected Areas

Tourism

Tourism

Trade

Trade

Transport

Transport

Water

Water

Enhance local budget execution

Local revenues, budgeting and spending impact biodiversity through managing land use, natural resource exploitation, local protected areas, and financing biodiviversity supportive programmes and projects. Guidelines for increasing effectiveness and biodiversity impact of local budgets can enhance impact and direct funds to biodiversity.

 

Result

Avoid

Any measure that can prevent or reduce future investment needs by eliminating/amending existing counter-productive policies and expenditures (e.g. taxes on sugar content or tobacco).

Avoid

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Realign

Any measure that can re-orient and realign existing financial flows towards biodiversity conservation. 

Realign

Type

Fiscal

Any solution that involves a fiscal reform, i.e. changes in taxation or the modification of a subsidy's regime.

Fiscal

Public/Private
Public

Public

Sector

Agriculture

Agriculture

Energy

Energy

Fishing

Fishing

Forests

Forests

Mining

Mining

Other

Other

Protected Areas

Protected Areas

Transport

Transport

Water

Water

Remove barriers for public budget execution-external

External barriers for timely budget execution are often related to relationships among the treasury and the spending agencies. They may refer to the timing and amount of transfers as well to the clarification and strengthening of management responsibilities. While not specific to biodiversity, these measures can and should be considered by conservation organizations.

Result

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Type

Fiscal

Any solution that involves a fiscal reform, i.e. changes in taxation or the modification of a subsidy's regime.

Fiscal

Grant

Any solution that invovles the allocation of a grant. This includes private donations and Official Development Assistance.

Grant

Regulatory

Any solution that involves a regulatory reform, i.e. the imposition of a certain behaviour through the law or a regulation.

Regulatory

Public/Private
Public

Public

Sector

Agriculture

Agriculture

Energy

Energy

Finance

Finance

Fishing

Fishing

Forests

Forests

Infrastructure

Infrastructure

Manufacturing

Manufacturing

Mining

Mining

Other

Other

Protected Areas

Protected Areas

Tourism

Tourism

Trade

Trade

Transport

Transport

Water

Water

Remove barriers for public budget execution-internal

Internal barriers for timely and effective budget execution are often related to financial planning capacity gaps, weak accounting systems, systemic corruption practices, and the absense or poor design or individual performance and incentive systems. These barriers can be addressed through organizational capacity development (people and systems). While not specific to biodiversity, these measures can and should be considered by conservation organizations.

Result

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Type

Fiscal

Any solution that involves a fiscal reform, i.e. changes in taxation or the modification of a subsidy's regime.

Fiscal

Grant

Any solution that invovles the allocation of a grant. This includes private donations and Official Development Assistance.

Grant

Regulatory

Any solution that involves a regulatory reform, i.e. the imposition of a certain behaviour through the law or a regulation.

Regulatory

Public/Private
Public

Public

Sector

Agriculture

Agriculture

Energy

Energy

Finance

Finance

Fishing

Fishing

Forests

Forests

Infrastructure

Infrastructure

Manufacturing

Manufacturing

Mining

Mining

Other

Other

Protected Areas

Protected Areas

Tourism

Tourism

Trade

Trade

Transport

Transport

Water

Water

Countries:

Enhanced land or marine stewardship

An informal or formal commitment by a community, private landowner, NGO or corporate landowner to sustainable manage and/or formally protect a specified land or marine area. Incentives are sometimes provided to encourage or support landowner participation.

Result

Avoid

Any measure that can prevent or reduce future investment needs by eliminating/amending existing counter-productive policies and expenditures (e.g. taxes on sugar content or tobacco).

Avoid

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Type

Fiscal

Any solution that involves a fiscal reform, i.e. changes in taxation or the modification of a subsidy's regime.

Fiscal

Market

Any solution that involves a market transaction, e.g. ecosystem services and carbon markets.

Market

Regulatory

Any solution that involves a regulatory reform, i.e. the imposition of a certain behaviour through the law or a regulation.

Regulatory

Public/Private
Public

Public

Private

Private

Sector

Agriculture

Agriculture

Finance

Finance

Forests

Forests

Mining

Mining

Other

Other

Protected Areas

Protected Areas

Tourism

Tourism

Water

Water

Conservation extension services

Government or civil society extension services decrease the costs of improved management of marine and land resources for private individuals and groups. Extension services - especially in rural remote areas - have been decreased substantially in many countries and replaced with sales and marketing services for products harmful to the environment such as engineered seeds, fertilizers and pesticides - ultimately generating higher costs to government for environmental and health issues.

Result

Avoid

Any measure that can prevent or reduce future investment needs by eliminating/amending existing counter-productive policies and expenditures (e.g. taxes on sugar content or tobacco).

Avoid

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Realign

Any measure that can re-orient and realign existing financial flows towards biodiversity conservation. 

Realign

Type

Grant

Any solution that invovles the allocation of a grant. This includes private donations and Official Development Assistance.

Grant

Public/Private
Public

Public

Private

Private

Sector

Agriculture

Agriculture

Fishing

Fishing

Forests

Forests

Protected Areas

Protected Areas

Tourism

Tourism

Water

Water

Conservation services for private land owners

Government supports conservation and restoration actions on private lands that decrease the costs of land management for private and communal land owners. This creates an incentive for land owners to pursue conservation actions through cost reduction and public private partnerships with government. An example is the Natural Resources programme in South Africa where support is provided for the removal of invasive alien species and land restoration.

Result

Avoid

Any measure that can prevent or reduce future investment needs by eliminating/amending existing counter-productive policies and expenditures (e.g. taxes on sugar content or tobacco).

Avoid

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Realign

Any measure that can re-orient and realign existing financial flows towards biodiversity conservation. 

Realign

Type

Grant

Any solution that invovles the allocation of a grant. This includes private donations and Official Development Assistance.

Grant

Public/Private
Public

Public

Private

Private

Sector

Agriculture

Agriculture

Forests

Forests

Other

Other

Protected Areas

Protected Areas

Tourism

Tourism

Water

Water

Conservation tax credits

Tax credits can be offered to land owners in exchange for conservation and restoration activities on private land that contributes to established conservation objectives. Systems can be established at a national or local level. Tax credits may be transferable to other entities and thus hold a higher value for land owners lacking large tax liabilities.

Result

Avoid

Any measure that can prevent or reduce future investment needs by eliminating/amending existing counter-productive policies and expenditures (e.g. taxes on sugar content or tobacco).

Avoid

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Realign

Any measure that can re-orient and realign existing financial flows towards biodiversity conservation. 

Realign

Type

Fiscal

Any solution that involves a fiscal reform, i.e. changes in taxation or the modification of a subsidy's regime.

Fiscal

Regulatory

Any solution that involves a regulatory reform, i.e. the imposition of a certain behaviour through the law or a regulation.

Regulatory

Risk

Any solution that invovles the transfer of risks between two or more parties, e.g. a guarantee.

Risk

Public/Private
Public

Public

Private

Private

Sector

Agriculture

Agriculture

Finance

Finance

Forests

Forests

Protected Areas

Protected Areas

Tourism

Tourism

Trade

Trade

Water

Water

Enterprise challenge and innovation funds

Funding instrument that distributes grants (or concessional finance) to profit-seeking projects on a competitive basis. It subsidizes private investment in developing countries where there is an expectation of commercial viability accompanied by measurable social and/or environmental outcomes. Challenge funds can mitigate market risks, while spurring innovation to fight poverty and reduce environmental degradation.

Result

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Generate

Any existing or innovative mechanism that can generate and/or leverage financial resources for biodiversity.

Generate

Type

Debt/Equity

Any solution that invovles an obligation or liability to make a payment and/or the acquisition of ownership rights (equity, property or financial asset).

Debt/Equity

Grant

Any solution that invovles the allocation of a grant. This includes private donations and Official Development Assistance.

Grant

Market

Any solution that involves a market transaction, e.g. ecosystem services and carbon markets.

Market

Public/Private
Public

Public

Private

Private

Sector

Agriculture

Agriculture

Energy

Energy

Finance

Finance

Fishing

Fishing

Forests

Forests

Infrastructure

Infrastructure

Manufacturing

Manufacturing

Mining

Mining

Other

Other

Tourism

Tourism

Trade

Trade

Transport

Transport

Water

Water

Environmental risk insurance

Insurance schemes that cover against environmental liabilities (i.e. the financial risk associated with environmental pollution and contamination) in exchange for a premium. In addition to preventing future expenditures and thus reducing business risks, they can provide contingent resources for immediate remedial action in the event of an environmental disaster.

Result

Avoid

Any measure that can prevent or reduce future investment needs by eliminating/amending existing counter-productive policies and expenditures (e.g. taxes on sugar content or tobacco).

Avoid

Type

Risk

Any solution that invovles the transfer of risks between two or more parties, e.g. a guarantee.

Risk

Public/Private
Public

Public

Private

Private

Sector

Agriculture

Agriculture

Energy

Energy

Finance

Finance

Fishing

Fishing

Forests

Forests

Infrastructure

Infrastructure

Manufacturing

Manufacturing

Mining

Mining

Other

Other

Tourism

Tourism

Trade

Trade

Transport

Transport

Water

Water

Fees, penalties, and management expenditures for Environmental (and Social) Impact Assessments

Environmental (and Social) Impact Assessments (EIA) are conducted to evaluate the environmental and social risks of a development project including mining, hotels, and other large infrastructure projects. A range expenditures and investment to preserve nature are associated with the EIA process including permitting fees, expenditures for the assessment itself, expenditures for implementation of the environmental and social management plans, performance bonds, insurance products, biodiversity offsets etc. Additionnally, penalties may be directly triggered by non-compliance to the EIA and its associated management plans. 

Result

Avoid

Any measure that can prevent or reduce future investment needs by eliminating/amending existing counter-productive policies and expenditures (e.g. taxes on sugar content or tobacco).

Avoid

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Generate

Any existing or innovative mechanism that can generate and/or leverage financial resources for biodiversity.

Generate

Type

Regulatory

Any solution that involves a regulatory reform, i.e. the imposition of a certain behaviour through the law or a regulation.

Regulatory

Public/Private
Public

Public

Private

Private

Sector

Agriculture

Agriculture

Energy

Energy

Finance

Finance

Fishing

Fishing

Forests

Forests

Infrastructure

Infrastructure

Manufacturing

Manufacturing

Mining

Mining

Tourism

Tourism

Transport

Transport

Water

Water

EIA permitting and review fees

Fees charged to developers for complementing the Environmental (and Social) Impact Assessments (EIA) review process by public authorities.  Fees are often set at cost recovery rates. The resources are used to staff environmental agencies responsible to review EIA. 

Result

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Generate

Any existing or innovative mechanism that can generate and/or leverage financial resources for biodiversity.

Generate

Type

Fiscal

Any solution that involves a fiscal reform, i.e. changes in taxation or the modification of a subsidy's regime.

Fiscal

Regulatory

Any solution that involves a regulatory reform, i.e. the imposition of a certain behaviour through the law or a regulation.

Regulatory

Public/Private
Public

Public

Private

Private

Sector

Agriculture

Agriculture

Energy

Energy

Fishing

Fishing

Forests

Forests

Infrastructure

Infrastructure

Manufacturing

Manufacturing

Mining

Mining

Tourism

Tourism

Water

Water

EIA performance bonds

A performance (or contract bond) is a surety bond issued by an insurance or financial company to guarantee satisfactory completion of a project by a contractor. Performance bonds and other financial guarantees can be linked to EIA provisions. These are provided by the project developer -usually for long term mining projects- to assure stakeholders that financial resources can be deployed even if the developer cannot comply with EIA provisions. It is a promise from a surety that monetary compensation will be provided to the owner if the project developer fails to act. The resources from the surety can be quickly deployed to save or recover critical environmental assets and can be accessed even in case of bankruptcy.

Result

Avoid

Any measure that can prevent or reduce future investment needs by eliminating/amending existing counter-productive policies and expenditures (e.g. taxes on sugar content or tobacco).

Avoid

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Generate

Any existing or innovative mechanism that can generate and/or leverage financial resources for biodiversity.

Generate

Type

Debt/Equity

Any solution that invovles an obligation or liability to make a payment and/or the acquisition of ownership rights (equity, property or financial asset).

Debt/Equity

Fiscal

Any solution that involves a fiscal reform, i.e. changes in taxation or the modification of a subsidy's regime.

Fiscal

Regulatory

Any solution that involves a regulatory reform, i.e. the imposition of a certain behaviour through the law or a regulation.

Regulatory

Risk

Any solution that invovles the transfer of risks between two or more parties, e.g. a guarantee.

Risk

Public/Private
Public

Public

Private

Private

Sector

Energy

Energy

Finance

Finance

Infrastructure

Infrastructure

Manufacturing

Manufacturing

Mining

Mining

Tourism

Tourism

Water

Water

Countries:

Financial and operational mergers

Merging two or more organizations can produce economies of scale and allow public and private organizations to substantially reduce operational and financial costs. For example, operational costs can be reduced by merging environmental trust funds and protected areas authorities with similar mandates. While not specific to biodiversity, these measures can and should be considered by conservation organizations. The resources saved can be reinvested in conservation.

Result

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Type

Regulatory

Any solution that involves a regulatory reform, i.e. the imposition of a certain behaviour through the law or a regulation.

Regulatory

Public/Private
Public

Public

Private

Private

Sector

Agriculture

Agriculture

Energy

Energy

Finance

Finance

Fishing

Fishing

Forests

Forests

Infrastructure

Infrastructure

Manufacturing

Manufacturing

Mining

Mining

Other

Other

Protected Areas

Protected Areas

Tourism

Tourism

Trade

Trade

Transport

Transport

Water

Water

Countries:

Financial guarantees

Guarantees can mobilize and leverage commercial financing by mitigating and/or protecting risks (such as political, regulatory, and foreign-exchange risk), notably commercial default or political risks. Guarantee programs are often designed to help entrepreneurs obtain bank financing by dealing with collateral constraints. The guarantee functions as a promise by the guarantor to the lender that, in the event that the borrower defaults on payment, the guarantor will repay the lender a specified proportion of the foregone principal. This allows traditional lenders to take risks and learn new markets outside current risk profiles. The scheme can be attached to biodiversity related businesses which are often operating in non-mature markets and lack financial records. 

Result

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Generate

Any existing or innovative mechanism that can generate and/or leverage financial resources for biodiversity.

Generate

Realign

Any measure that can re-orient and realign existing financial flows towards biodiversity conservation. 

Realign

Type

Debt/Equity

Any solution that invovles an obligation or liability to make a payment and/or the acquisition of ownership rights (equity, property or financial asset).

Debt/Equity

Market

Any solution that involves a market transaction, e.g. ecosystem services and carbon markets.

Market

Risk

Any solution that invovles the transfer of risks between two or more parties, e.g. a guarantee.

Risk

Public/Private
Public

Public

Private

Private

Sector

Agriculture

Agriculture

Energy

Energy

Finance

Finance

Fishing

Fishing

Forests

Forests

Infrastructure

Infrastructure

Manufacturing

Manufacturing

Mining

Mining

Tourism

Tourism

Trade

Trade

Transport

Transport

Water

Water

Public guarantees

Guarantees can mobilize and leverage commercial financing by mitigating and/or protecting risks (such as political, regulatory, and foreign-exchange risk), notably commercial default or political risks. A public guarantee can encourage financial institutions, i.e. commercial and development banks, to offer loans to new companies. Public guarantee programs are often part of bilateral or multilateral development assistance and seek to address market failures without unintentional distortion of existing banking systems and financial markets. The scheme can be attached to biodiversity related businesses.

Result

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Generate

Any existing or innovative mechanism that can generate and/or leverage financial resources for biodiversity.

Generate

Realign

Any measure that can re-orient and realign existing financial flows towards biodiversity conservation. 

Realign

Type

Debt/Equity

Any solution that invovles an obligation or liability to make a payment and/or the acquisition of ownership rights (equity, property or financial asset).

Debt/Equity

Market

Any solution that involves a market transaction, e.g. ecosystem services and carbon markets.

Market

Risk

Any solution that invovles the transfer of risks between two or more parties, e.g. a guarantee.

Risk

Public/Private
Public

Public

Private

Private

Sector

Agriculture

Agriculture

Energy

Energy

Finance

Finance

Fishing

Fishing

Forests

Forests

Infrastructure

Infrastructure

Manufacturing

Manufacturing

Mining

Mining

Other

Other

Tourism

Tourism

Trade

Trade

Transport

Transport

Water

Water

Private guarantees

Guarantees can mobilize and leverage commercial financing by mitigating and/or protecting risks (such as political, regulatory, and foreign-exchange risk), notably commercial default or political risks. The guarantee functions as a promise by the guarantor to the lender that, in the event that the borrower defaults on payment, the guarantor will repay the lender a specified proportion of the foregone principal. This allows traditional lenders to take risks and learn new markets outside current risk profiles. The scheme can be attached to biodiversity related businesses, which are often operating in non-mature markets and lack financial records. Private companies and Non-government organizations can extend these guarantees. 

Result

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Generate

Any existing or innovative mechanism that can generate and/or leverage financial resources for biodiversity.

Generate

Realign

Any measure that can re-orient and realign existing financial flows towards biodiversity conservation. 

Realign

Type

Debt/Equity

Any solution that invovles an obligation or liability to make a payment and/or the acquisition of ownership rights (equity, property or financial asset).

Debt/Equity

Market

Any solution that involves a market transaction, e.g. ecosystem services and carbon markets.

Market

Risk

Any solution that invovles the transfer of risks between two or more parties, e.g. a guarantee.

Risk

Public/Private
Public

Public

Private

Private

Sector

Agriculture

Agriculture

Energy

Energy

Finance

Finance

Fishing

Fishing

Forests

Forests

Infrastructure

Infrastructure

Manufacturing

Manufacturing

Mining

Mining

Other

Other