South African Biodiversity Investment Portal has secured its first investments to promote biodiversity conservation and community well-being

Blyde Canyon
Blyde Canyon

In 2022, the South African Government, with the support of the UNDP-Biodiversity Finance Initiative (UNDP-BIOFIN), launched the first Biodiversity Investment Portal to match investors with bankable projects to support the growth of the biodiversity economy in South Africa. Recently, the portal successfully secured its first investments for two important biodiversity stewardship sites. This achievement, made possible by technical assistance from UNDP-BIOFIN, is an important step in promoting conservation, ecotourism, and community well-being in the country.

The first investment was made by the United States Agency for International Development (USAID) through the Africa Conservation & Communities Tourism Fund, which expressed interest in the projects listed on the investment portal. This resulted in the signing of two agreements totaling approximately US$ 450,000 (to be provided through in-kind contributions). The two beneficiary sites, the Madikwe Barokalogadi Community Property Association (CPA) in the North West and the Blyde River Canyon Nature Reserve, will use the investment to develop a management plan and implement a biodiversity credit system.

Both sites were carefully selected for their exceptional biodiversity richness and their potential for significant positive impacts on local communities and ecosystems.
Tendai Nhachi, carbon and biodiversity specialist from of ThirdWay Partners (TWP) has emphasized that the sites were selected to test opportunities for monetizing biodiversity through biodiversity credits. “The Madikwe ecological region is home to one of the largest rhino populations in the world, which is now severely threatened, partly due to habitat loss. Guqula Safaris is a tourism company committed to social impact and working with local SMEs. We want to help Guqula Safaris develop strategies to monetize Madikwe's biodiversity to support biodiversity conservation efforts and the local community," she says.

Ms. Nhachi adds that the Blyde River Canyon is another ideal candidate for biodiversity credits as it is located in a known biodiversity hotspot. It is currently being restored to conserve biodiversity and promote local ecotourism. TWP is in favour of monetizing such initiatives that benefit both the community and nature conservation.

Through these trial opportunities, TWP aims to demonstrate the effectiveness of monetizing biodiversity as an additional source of revenue for conservation landscapes, supporting local economies and promoting sustainable development. TWP is committed to working with local stakeholders, conservation organizations and government agencies to assist the two projects in applying for biodiversity credits for their conservation efforts.


Biodiversity Investment Portal as a key financial solution 

Biodiversity stewardship involving private and community landowners is a key strategy for South Africa to achieve the ambitious goals of the Kunming-Montreal Global Biodiversity Framework   (GBF). The framework aims to protect 30% of the land and 30% of the seas. South Africa currently protects 16.7% of its land, of which only 9.8% has the status of a protected area. The South African National Biodiversity Institute has recognized the potential of biodiversity conservation and identified the lack of government funding as the biggest obstacle to progress. In 2017, the main obstacle to biodiversity stewardship was not the lack of willingness of landowners, but the lack of government funding to support programmes.

To address the challenge of funding, the UNDP-BIOFIN identified the development of an investment platform as one solution. This financial solution was one of 16 priorities in South Africa’s Biodiversity Finance Plan (BFP), which aims to close the funding gap in the National BFP. The investment platform is expected to become one of the key solutions to overcoming the barriers to biodiversity conservation.

"South Africa's rich biodiversity is the foundation for economic growth and development. The tourism sector contributes significantly to the country's GDP and is highly dependent on the effective protection of biodiversity. The country's remarkable natural landscapes and rich biodiversity are popular tourist attractions. The secured investment will enable the service provider to develop a management plan and a biodiversity credit system for the protected areas. Investing in biodiversity conservation will improve macroeconomic outcomes and potentially lead to a higher quality of life for all," – says Nokutula Mhene, BIOFIN National Coordinator in South Africa.  

Closing the funding gap: the urgency for innovative financing in biodiversity conservation

Investment in biodiversity, both public and private, remains low and insufficient. Currently, less than one percent of South Africa’s public budget is spent on biodiversity conservation, with private funds not officially recorded. To make matters worse, public funding is dwindling while the country is ambitiously expanding its protected areas to fulfill the commitments made in the Global Biodiversity Framework. As a result, the stewardship programmes and other parts of the protected areas are currently facing significant funding problems. The situation is exacerbated in the case of stewardship areas, which are considered high-risk by most private investors, meaning that the financing gap needs to be filled by the public sector or pure impact investors.

Therefore, there is an urgent need for innovative financing mechanisms involving both private and public actors to close the current biodiversity financing gap. The investments currently secured for the projects on the Biodiversity Investment Portal are a pilot project for a new area of innovative financing mechanisms and thus act as a catalyst. The investments secured will enable the stewardship sites to develop and implement a biodiversity crediting system. 


Looking ahead

Efforts are being made to consolidate the opportunities within the investment platform to attract larger investments. Collaboration with international funds is being actively explored to further increase the attractiveness of these opportunities. In addition, the Ministry of Forestry, Fisheries and Environment is planning to include 20 new opportunities in the platform, to be presented in March 2024.

The joint efforts of UNDP-BIOFIN, USAID and other stakeholders in securing investments for biodiversity stewardship sites demonstrate a commitment to sustainable biodiversity management and conservation. As the investment portal evolves, it serves as an example of environmental stewardship and community-driven initiatives that benefit both biodiversity and local communities.

About UNDP-BIOFIN South Africa: 

South Africa, one of the most biodiverse countries in the world, has identified and quantified the existing biodiversity financing gap thanks to the BIOFIN methodology. UNDP BIOFIN supported the development of the National Biodiversity Financing Plan, which prioritizes eight financing solutions. One of these was the development and operationalization of an investment platform to help close the biodiversity financing gap.