Projects involving nature-based solutions don't have an ambition problem. The real challenge is bankability.
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That was the throughline of the "๐๐ถ๐ป๐ฎ๐ป๐ฐ๐ถ๐ป๐ด ๐ก๐ฎ๐๐๐ฟ๐ฒ: ๐ช๐ต๐ฎ๐ ๐๐ ๐๐ฐ๐๐๐ฎ๐น๐น๐ ๐๐ป๐๐ฒ๐๐๐ฎ๐ฏ๐น๐ฒ ๐ง๐ผ๐ฑ๐ฎ๐?" webinar hosted by Sustainable Finance Coalition.
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Representing BwB, Chris Smith, Managing Director and Global Head of Sovereign Sustainable Finance, shared how project developers can better position nature-based solutions to attract private investment. Key takeaways include:
- ๐๐ฎ๐ป๐ธ๐ฎ๐ฏ๐ถ๐น๐ถ๐๐ ๐ถ๐ ๐ถ๐ป ๐๐ต๐ฒ ๐ฒ๐๐ฒ ๐ผ๐ณ ๐๐ต๐ฒ ๐ฏ๐ฒ๐ต๐ผ๐น๐ฑ๐ฒ๐ฟ. Private capital isn't one pool of money - investors have different risk appetites, tenors, and return requirements. Innovation is about matching each project to the right pool of capital, not chasing one ideal investor.
- ๐ฃ๐ฟ๐ผ๐ท๐ฒ๐ฐ๐๐ ๐ผ๐ณ๐๐ฒ๐ป ๐ณ๐ฎ๐ถ๐น ๐ถ๐ป๐๐ฒ๐๐๐ผ๐ฟ๐' ๐ฏ๐ฎ๐๐ถ๐ฐ ๐๐ฒ๐๐๐ ๐ฏ๐ฒ๐ฐ๐ฎ๐๐๐ฒ ๐ณ๐ถ๐ป๐ฎ๐ป๐ฐ๐ฒ ๐ถ๐ ๐๐ฟ๐ฒ๐ฎ๐๐ฒ๐ฑ ๐ฎ๐ ๐ฎ๐ป ๐ฎ๐ณ๐๐ฒ๐ฟ๐๐ต๐ผ๐๐ด๐ต๐. The biggest constraint is bankable cash flow: nature creates real value through watershed protection, soil health, and biodiversity, but this often remains unmonetised. Designing for scale and revenue from day one is crucial.
- ๐๐ป๐ฑ๐ถ๐๐ถ๐ฑ๐๐ฎ๐น ๐ป๐ฎ๐๐๐ฟ๐ฒ-๐ฏ๐ฎ๐๐ฒ๐ฑ ๐๐ผ๐น๐๐๐ถ๐ผ๐ป ๐ฝ๐ฟ๐ผ๐ท๐ฒ๐ฐ๐๐ ๐๐๐ฝ๐ถ๐ฐ๐ฎ๐น๐น๐ ๐ฟ๐ฎ๐ถ๐๐ฒ ๐จ๐ฆ$๐ญ-๐ญ๐ฌ ๐บ๐ถ๐น๐น๐ถ๐ผ๐ป - ๐๐ผ๐ผ ๐๐บ๐ฎ๐น๐น ๐ณ๐ผ๐ฟ ๐ถ๐ป๐๐๐ถ๐๐๐๐ถ๐ผ๐ป๐ฎ๐น ๐ถ๐ป๐๐ฒ๐๐๐ผ๐ฟ๐ ๐๐ผ ๐ท๐๐๐๐ถ๐ณ๐ ๐ฑ๐๐ฒ ๐ฑ๐ถ๐น๐ถ๐ด๐ฒ๐ป๐ฐ๐ฒ. Aggregation vehicles, blended structures, first-loss capital, and guarantees can shift the risk-return profile to unlock investment.
- ๐๐ถ๐ป๐ฎ๐ป๐ฐ๐ถ๐ป๐ด ๐๐๐ฟ๐๐ฐ๐๐๐ฟ๐ฒ๐ ๐บ๐๐๐ ๐ฟ๐ฒ๐ณ๐น๐ฒ๐ฐ๐ ๐ป๐ฎ๐๐๐ฟ๐ฒ'๐ ๐๐ถ๐บ๐ฒ๐น๐ถ๐ป๐ฒ๐. Ecosystems deliver value over decades, while most private capital seeks shorter investment horizons. Patient capital, interim cash flows, credible monitoring, reporting and verification, and clear exit pathways are essential to bridging that gap.
- ๐ฆ๐๐ฐ๐ฐ๐ฒ๐๐ ๐ฟ๐ฒ๐พ๐๐ถ๐ฟ๐ฒ๐ ๐ฎ๐๐๐ต๐ฒ๐ป๐๐ถ๐ฐ ๐ฝ๐ฎ๐ฟ๐๐ป๐ฒ๐ฟ๐๐ต๐ถ๐ฝ๐. Building trust and clear communication between conservation and investment communities is crucial.
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As Chris put it: "The nature finance market doesn't have a shortage of ambition; it has a shortage of bankable projects of sufficient size. This session was about being honest about that gap, and about what it will take to close it."
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Thank you to our fellow panellists for an insightful conversation:
- Candice Stevens - Founder & CEO, Sustainable Finance Coalitionย
- Wendy Engel - Senior Sustainable Finance Coordinator, Sustainable Finance Coalitionย
- Mahaut Stefani - Governments Engagement and Policy Associate, International Advisory Panel on Biodiversity Credits
- Pauline Nantongo - Executive Director, ECOTRUST Ugย
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