Blue Finance and UBS Optimus Foundation have provided the Philippines its first marine-focused loan providing an up-front blended capital of $600,000.
The foundation said the loan will fund revenue-generating blue economy initiatives in marine protected areas in the country focused on protecting and regenerating coral reefs, increasing marine biodiversity and enhancing livelihoods.
“We are strong proponents of their holistic approach, which supports biodiversity and climate mitigation while improving the livelihoods of local communities. Our impact loan to marine protected area projects in the Philippines showcases the financial viability of what will be a self-sustaining conservation model and highlights the impact potential of Blue finance’s approach,” said UBS Foundation CEO Maya Ziswiler.
“We believe in nature conservation with sustainable, long-term business models to address the biodiversity crisis in the long term. This innovative approach is transformative for marine protected areas and is setting a precedent for impact investment in marine conservation and economic development globally,” Blue Finance executive director and co-founder Nicolas Pascal, said.
He noted more than 60 percent of coral reefs worldwide are under immediate threat but that marine protected areas are some of the best tools protecting marine biodiversity.
In 2020, Blue Finance created the Blue Alliance NGO with the support of the United Nations, the Global Fund for Coral Reefs and the International Union for Conservation of Nature. Blue Alliance manages the marine protected area network and related projects alongside local authorities in North Oriental Mindoro.
The island province in the western part of the country encompasses the Verde Island Passage, recognized as a global shore fish biodiversity hotspot. This ocean channel supports more than two million people.
The network currently covers 12 marine protected areas that collectively protect 70 kilometers of coastline and 52 square kilometers of coastal marine ecosystems, including a UNESCO biosphere reserve.
Thirty rangers, community officers and managers have been employed to implement core MPA activities.
The funds will allow the Blue Alliance to enhance the management and protection of coral reef ecosystems, develop sustainable revenue mechanisms for the marine protected area network and contribute to the achievement of multiple UNDP Sustainable Development Goals.
Blended finance unlocks commercial capital by combining it with philanthropic capital to boost project design and execution, enabling the projects to meet the investor’s criteria.
The impact loan will be repaid through revenue streams such as nature-based ecotourism, blue carbon credits from mangrove conservation and small-scale aquaculture projects. The interest rate is linked to social and environmental performance, the greater the impact, the lower the interest rate, the foundation said.
Impact will be measured using recognized international standards for ecosystem integrity, species protection, livelihood outcomes including job creation, as well as gender equality and overall marine protected area management effectiveness.
The funding will also support the development of innovative tools to measure impact which can be applied to other marine protected areas in the future.
