GFCR Endorses a 10-Year Investment Plan
New York, 1 July 2021 – The Global Fund for Coral Reefs (GFCR) Executive Board has endorsed a 10-year Investment Plan outlining a strategic vision that unites GFCR conservation and sustainable finance goals for coral reefs. The GFCR Investment Plan, with development led by Conservation Finance Alliance (CFA), establishes an initial country prioritization, relevant business model assessment and a strategy to facilitate early grants and investments.
As GFCR funding is focused on emerging global markets, five major coral regions have been identified for potential implementation: Atlantic (including the Caribbean), Indian Ocean, Middle East, Pacific, and Southeast Asia, with a focus on underfunded regions in Small Island Developing States (SIDS) and Least Developed Countries (LDCs). Following a Request for Information (RFI) exercise implemented on a global scale, priority geographies, key actors and business models aligned with GFCR’s blended finance approach for targeting resilient reefs have been identified. Reef ecosystems in more than two dozen countries spanning major coral regions have been prioritised due to their resilience to climate change, high biodiversity levels and investment conditions. Principal reef resilience studies, including the 50 Reefs study and UNEP Coral Bleaching Futures, confirm the prioritised geographies harbour resilient reef ecosystems with the greatest chance of survival.
The Investment Plan, a living document, outlines the collaborative framework between the GFCR’s two financing windows to facilitate the flow of capital through distinct yet integrated decision-making structures. The Grant Window manages philanthropic and public financing and will use a combination of grants and concessional finance to achieve measurable impacts and enable conditions for private investments. The Investment Window, directly managed by the Fund’s private sector partners, BNP Paribas and Pegasus Capital Advisors, seeks to provide both impact and a financial return to its investors. Across these two windows, a range of financial tools can be strategically co-implemented to achieve the greatest impact for coral reefs.
The Investment Plan offers an overview of various portfolio approaches to leverage investments and maximise results, including:
- Building a blended finance portfolio around large anchor investments in businesses or projects, such as sustainable fisheries, blue infrastructure, etc. The Fund then uses its grant and concessional financing to ensure that local small and medium-sized enterprises (SMEs), communities and ecosystems are enhanced as a result of these investments.
- Investing in intermediaries capable of aggregating and supporting a portfolio of targeted smaller investment deals. Intermediaries include venture funds, incubators, and other technical assistance facilities including those being developed in some of the Fund’s target sites.
- Collaboration with partners capable of providing complementary impact investments to develop and finance diverse businesses, projects, and technologies needed to achieve the Fund’s desired outcomes.
The Investment Plan supports reef-dependent communities through facilitation of access to capital, institutional capacity building, and expansion of local knowledge for business opportunities that are compatible with conservation. Market conditions creating barriers to local progress are addressed with actions that aim to decrease risk and price volatility, as well as assure that investments down the supply chain do not have adverse impacts on coral reefs and their dependent communities.