Caribbean Biodiversity Fund: Sustainable financing for PA systems

Robert WearySr. Conservation Finance & Policy AdvisorCaribbean, The Nature Conservancy

Dr. Spencer ThomasAmbassador, Special Envoy for MEAsGrenada

Caribbean Challenge

Formally launched in Bonn,

Germany, May 2008, at CBD

COP9, by the Bahamas,

Dominican Republic, Jamaica,

Grenada, and St. Vincent and the

Grenadines

Caribbean Challenge Objectives

• To effectively conserve and manage at least 20% (8.2 million Has) of the Caribbean’s marine habitat by 2020;

• Creation of sustainable finance mechanisms to support national systems of protected areas

• Development & implementation of ecosystem based adaptation to climate change projects

Caribbean Challenge Timeline

2004- 188 countries

commit to a Program of Work on PAs (COP 7)

2005- TNC signs 6 NISP

Agreements w/ Caribbean govts & OECS

- Development of Master Plans for National System of Protected Areas

2006- Micronesia

Challenge launched,

- Grenada makes 2020 declaration

2008- Caribbean

Challenge launched, 5 countries endorse at COP 9

- TNC pledges $20M in support

- KfW pledges €10 M- Bahamas, DR,

Jamaica GEF PIFs approved

2004 2005 2006 2007 2008 2009

2009-CARICOM endorses Caribbean Challenge-E. Carib GEF PIF approved-Bahamas, DR, and Jamaica GEF PPGs completed

2010-11- Design of

Caribbean Biodiversity Fund & national level PA Trusts

- E. Caribbean GEF PPG completed

- Bahamas, DR, & Jamaica GEF projects underway

2010

Public/Private Funding

EndowmentsWork on the

Ground Total

GEF $9 M $11 M $20 M

Germany (KfW) $12.1 M - $12.1 M

USAID - $11 M $11 M

Italy - $1 M $1 MGov't of Bahamas $2 M - $2 M

TNC $8 M $12 M $20 M

TBD $8.9 M - $8.9 M

Total $40 M $35 M $75 M

Why this project?

Current Basic Gap* New Funding** % of Gap

% Increase

in Funding

Antigua & Barbuda 1,400,000$ 300,000$ 21%Bahamas 6,000,000$ 13,100,000$ 7,100,000$ 1,000,000$ 14% 17%Dominican Republic 6,900,000$ 22,600,000$ 15,700,000$ 1,170,000$ 7% 17%Grenada 1,245,283$ 2,981,132$ 1,735,849$ 300,000$ 17% 24%Jamaica 5,700,000$ 10,200,000$ 4,500,000$ 1,250,000$ 28% 22%St. Kitts & Nevis 1,400,000$ 300,000$ 21%St. Lucia 1,400,000$ 300,000$ 21%St. Vincent & the Grenadines 1,547,170$ 2,566,038$ 1,018,868$ 300,000$ 29% 19%Total 21,392,453$ 51,447,170$ 34,254,717$ 4,920,000$ 14% 23%

* Estimated for Antigua & Barbuda, St. Lucia, and St. Kitts & Nevis** New conservation finance mechanisms created by Caribbean Challenge

Purpose

Caribbean Biodiversity Fund

• Caribbean Biodiversity Fund (the “CBF”)– International donors including GEF, KfW and TNC

(the “Initial Donors”) propose to contribute US$40 million to a new endowment fund

– To provide additional new funding to help pay for the long-term costs of managing protected areas in 8 Caribbean countries

Caribbean Biodiversity Fund

(Proportioned to each Trustby Initial Donors)

KfW

GEF

Initial Donors

Endowment Funds

TNC

InvestmentManager

Board of Trustees

Structure

Caribbean Biodiversity Fund

(Proportioned to each TrustBy Initial Donors)

BahamasTrust*

JamaicaTrust*

SVGTrust*

GrenadaTrust*

St. Kitts & NevisTrust*

KfW

GEF

Initial Donors

Endowment Funds

RevolvingFunds*

TNC

RevolvingFunds*

RevolvingFunds*

RevolvingFunds*

RevolvingFunds*

InvestmentManager

RevolvingFunds*

5% annual max payout

Board of Trustees*

Local Level Projects* Majority non-government boards.

DRTrust*

RevolvingFunds*

St.LuciaTrust*

Antigua &BarbudaTrust*

RevolvingFunds*

Donor Contributions (US$)

 Protected Area Trust KfW TNC GEF Gov't TBD Total

Antigua & Barbuda 900,000 600,000 1,500,000     3,000,000

Bahamas 3,000,000

2,000,000 500,000 2,000,000 2,500,000

10,000,000

Dominican Republic 3,000,000

2,000,000 250,000 4,750,000  10,000,000

Grenada 900,000 600,000 1,500,000     3,000,000

Jamaica 1,600,000

1,000,000 750,000   1,650,000 5,000,000

St. Kitts & Nevis 900,000 600,000 1,500,000     3,000,000

St. Lucia 900,000 600,000 1,500,000     3,000,000

St. Vincent & the Grenadines 900,000 600,000 1,500,000     3,000,000

Total 12,100,000

8,000,000 9,000,000 2,000,000 8,900,000

40,000,000

Basic Principles:Additionality• Additional Funds:

– The CBF would supplement, not replace, current government funding for protected areas

• Matching Funds:– Within 2 years, each country will create new conservation

finance mechanisms such as tourism fees, environmental fees, and/or PES (TBD by the country) that generate at least a 1:1 match to its endowment proceeds

• Of note, matching requirement could be waived for up to 2 years in the case of events out of its control (natural disasters, global financial crisis, etc)

Legal Documents Created

• NPATF legislation & bylaws

• CBF Establishment Document

• CBF Investment Strategy

• Vertical Agreement (links CBF to NPATFs)

• CBF Operating Manual

Next Steps

• Review of CBF Establishment Agreement (early 2011)

• Donor approvals (late 2010/early 2011)• Formal creation of CBF (early 2011)• Donors transfer funds to CBF (mid 2011)• Creation of NPATFs (ideally, during 2011)• First payout from CBF to NPATFs (mid 2012)• Matching conservation finance mechanisms

instituted (by 2014 CBF payment to NPATFs)

Conclusions

• Donor coordination important

• Country buy-in necessary

• Time consuming process

• Demanding & costly legal needs