Overview: Convergence, with funding from the RS Group, awarded Ocean Outcomes a feasibility study grant for the design of a Sustainable Seafood Fund as part of its Asia Natural Capital Design Funding Window. The Fund aims to change the way Fishery Improvement Projects (FIPs) in Asia Pacific are funded.
The proposed vehicle will blend grants, first loss capital, and concessional debt with commercial capital from impact investors and the seafood supply chain to secure long term improvements in the water. The objective is to reduce the unsustainable use of ocean resources, which leads to ecosystem degradation and threatens the livelihoods of coastal communities across the region.
Traditionally, FIPs have been reliant on grant funding, which cannot be mobilized at the scale required to meet demand and is often insufficient to support the long-term efforts a FIP requires. The proposed vehicle aims to overcome these constraints by catalyzing private sector financing of sustainability interventions by the seafood industry. The vehicle builds on an approach previously tested by the NFI Crab Council.
Design question and learning potential for the market: How can the transition to sustainable fishing practices be funded by private sector investors and supply chain actors benefiting from such a transition?
The Sustainable Seafood Fund will leverage Fishery Improvement Projects (FIPs) to reduce fisheries investment risks, including pipeline development, repayment risks, market risks, and execution risks, by bringing together supply chain partners to improve the management of fisheries and finance the transition to long term sustainability. The proposed vehicle will raise capital from investors and donors to contract service providers to implement FIPs across the region. Service providers will be subject to monitoring and evaluation as a precondition to continuous funding.
The Sustainable Seafood Fund will partner with corporate buyers, who have existing supply chain relationships, by entering into long-term purchase agreements to secure the long-term viability of fisheries and repay investors through volume- and/or value-based fees. These seafood buyers have an interest in supporting the transition to sustainable practices to allow them to meet the demands for sustainable seafood of final consumers.