Overview: Convergence awarded a proof of concept grant to Blue Finance with funding from the RS Group for its Asia Natural Capital Design Funding Window for the design of the Blended Blue Finance Facility (BBFF), which will support effective management of Marine Protected Areas (MPAs) in Southeast Asia. Mirova-Althelia will work in close collaboration with Blue Finance to support with structuring and management of the facility.
The BBFF will strengthen marine resource management, improve food security, promote sustainable development, and enhance climate change resilience in the region. The project builds from a pilot in the Dominican Republic. The approach, developed with local partners, relies on a long-term management lease for MPAs coupled with tangible revenue models, leveraged by blended finance and empowering local communities.
Blue Finance will initially focus on accelerating the investment readiness of four MPAs located in Cambodia, Indonesia, and the Philippines. The activities to be undertaken and financed through the MPAs include improvement & monitoring of the health of marine habitats, compliance & enforcement, community livelihood enhancement, community engagement & awareness, and support to tourism activities.
Design question and learning potential for the market: How can investments in Marine Protected Areas (MPAs) be structured to empower local communities and generate non-extractive revenues?
The approach relies on long-term management leases for MPAs signed between non-profit special purpose entities’ (SPEs) and the respective governments. The SPEs will be governed by founder members, which will include local and international NGOs, community representatives, and Blue Finance. The leases will define the roles, responsibilities, and revenue mechanisms for the length of the agreements. The SPEs will provide personnel and equipment at their own cost allowing governments to focus their scarce resources to other MPAs. The approach represents a turn-key solution for Governments without taking on additional debt and spending additional public resources.
The BBFF will have a blended investment facility providing up-front capital for the SPEs managing MPAs, structured as debt from commercial and concessional sources. The SPEs will generate revenues from MPAs through different sources, which will be used to pay back investors. The BBFF will also include a grant-funded technical assistance facility managed by Blue Finance to provide pre-investment support for project development and post-investment technical support to MPAs and local project developers.
If successful, the design and structure of the BBFF could transform the way MPAs are managed, and the approach could be replicable in other countries, regions, and globally, driving capital towards SDG-14-Life under Water, which is relatively underfunded.