Nature projects which tackle climate change, create and restore
habitats, or improve water quality could soon benefit from a new
£10 million fund to help them both benefit the environment and
attract private sector investment, the Government has announced
today (10 February).
The Natural
Environment Investment Readiness Fund will provide
grants of up to £100,000 to environmental groups, local
authorities, businesses and other organisations to help them
develop nature projects in England to a point where they can
attract private investment.
This will create a pipeline of projects for the private sector to
invest in, and develop new funding models that can be replicated
elsewhere, demonstrating the UK’s leadership in nature finance in
the run-up to COP26 in November.
Examples of projects that could be eligible
for the fund:
- the creation of new woodlands and the restoration of
peatlands, providing habitats for wildlife, green spaces for the
public and carbon sequestration to help the government achieve
its net zero target. This will generate carbon units which can be
sold to businesses that want to offset emissions.
- the creation of new coastal wetlands, which benefit wildlife
and reduce tidal flooding, while also attracting investment from
developers needing to deliver biodiversity net gain and even
delivering revenue through eco-tourism.
- the restoration of river catchments, helping to both improve
water quality and reduce flood risk. As well as benefitting
nature and people, these environmental benefits will deliver
financial incentives to water companies (with reduced costs for
water treatment) and encouraging them to invest.
Environment Minister said:
“Our 25 Year Environment Plan made clear that
while the public sector will continue to be a central source of
funding, it is critical that this is alongside more private
sector investment to protect and enhance our natural
environment.
“Investors are rightly recognising
environmental factors as key drivers of value. As we look to
build back greener from the pandemic, I would encourage any
interested businesses, local authorities, eNGOs or other
organisations to bid for a portion of this fund.”
Emma Howard Boyd, Chair of the
Environment Agency, said:
“The Government are calling for a green
industrial revolution at the same time that investors, including
people saving for their pensions, are looking for economic
returns that reverse natural decline and manage climate
shocks.
“There are already examples of this happening,
but the global economy needs more evidence if it is going to
reach a tipping point that mobilises trillions of dollars towards
nature. This fund will help, demonstrating funding models that
can be replicated, providing long-term benefits for the economy
and the environment, and showing UK leadership ahead of
COP26.”
The pioneering fund, which is being delivered
by the Environment Agency on behalf of Defra, will help
organisations get specialist advice, engage investors and build
capacity to develop their project to the stage when it is ready
to receive and repay investment.
Projects need to be replicable and scalable,
with key learnings made public to encourage similar approaches to
access private sector finance for nature projects in
future.
Dr Rhian-Mari Thomas OBE, Chief
Executive, Green Finance Institute, said:
“There are many important nature-based
projects that, with technical assistance and catalytic funding,
could meet investor requirements and demand, and secure the
private capital to help them achieve their missions. The NEIRF
will serve as an essential bridge, as well as providing an
example of how to build an investment pipeline for nature.
“We are delighted to have been able to support
the Environment Agency and Defra in the Fund’s development and to
continue our involvement in ensuring its success.”
With the Dasgupta Review having recently made
clear the value of nature to our economy and society, green
finance will be essential to addressing the defining
environmental challenges of our time, including climate change,
moving to net zero, protecting biodiversity and improving the
water environment.
Note to Editors:
- The Fund has been designed by Defra and Environment Agency,
working with HMT, Natural England and the Access Foundation for
Social Investment.
- On behalf of Defra and the Environment agency, the Green
Finance Institute led a series of educational workshops on the fund
and is supporting during the application and awards process.
