Ernst & Young France and ICF GHK are currently undertaking a study for the European Investment Bank (EIB) to identify a potential pipeline of projects for funding by the Natural Capital Financing Facility (NCFF) and are inviting applications from anyone with a potential interest in the facility.

The NCFF will be a new EU financial instrument funded by the EIB and the European Commission, providing innovative financial solutions to support bankable projects which are or have the potential to be revenue-generating or cost-saving, promoting the conservation, restoration, management and enhancement of natural capital for biodiversity and ecosystem services (BES) and climate adaptation benefits, including ecosystem-based solutions to challenges related to land, soil, forestry, agriculture, water and waste.

The NCFF will provide debt and equity finance for projects in fields such as green infrastructure (e.g. green roofs, green walls, ecosystem-based rainwater collection / water reuse systems, flood protection and erosion control), payment for ecosystem services (PES, e.g. programmes to protect and enhance forestry, biodiversity, to reduce water or soil pollution), biodiversity offsets / compensation beyond legal requirements (e.g. compensation pools), and pro-biodiversity and adaptation businesses (e.g. sustainable forestry, agriculture, aquaculture, eco-tourism). It will be complemented by technical assistance to support project preparation, implementation and monitoring.

The NCFF will be created by blending EIB funding with EC financing funded by the LIFE budget to step up the financing of BES, considered as one of the prerequisites for achieving the EU’s 2020 biodiversity goals. Its primary aim is to provide a proof of concept to demonstrate that BES and nature-based climate adaptation projects can be financed through innovative and sustainable market-based mechanisms. The ultimate objective is to demonstrate to investors the attractiveness of the projects for the longer term in order to develop a sustainable flow of capital towards those projects and achieve scale.

There will be an initial pilot phase of 3 to 4 years from 2014 to 2017, with a total amount of 100 million euros for the financing of 9 to 12 projects. For this phase, target operations will typically have a size of 5 to 15 million euros, but they are considering projects that could run for up to 10 years.

Ernst & Young France and ICF GHK would welcome ideas and approaches from anyone with a potential interest in the facility, whilst recognising that final eligibility criteria for the pilot phase are still under development. The pipeline study to identify potential projects will end in July  Click here for more information