UBS Optimus Foundation and Blue finance have forged a new partnership which will see the Foundation make its first marine-focused impact performance loan.
By providing up-front and early-stage blended capital of $600,000, the Foundation is empowering the Marine Protected Area (MPA) network in The Philippines to implement several blue economy revenue- generating initiatives whilst focusing on protecting and regenerating coral reefs, increasing marine biodiversity, and enhancing livelihoods.
“We are thrilled to partner with Blue finance on our first investment focusing on marine ecosystems. We are strong proponents of their holistic approach, which supports biodiversity and climate mitigation while improving the livelihoods of local communities,” UBS Optimus Foundation CEO Maya Ziswiler said.
She added that, “Our impact loan to MPA 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.”
“We believe in nature conservation with sustainable, long-term business models to address the biodiversity crisis in the long term,” Blue finance Executive Director and Co-Founder Nicolas Pascal said.
He noted that, “This innovative approach is transformative for MPAs and is setting a precedent for impact investment in marine conservation and economic development globally.”
“While more than 60 percent of coral reefs worldwide are under immediate threat, we have shown that MPAs are one of the best tools we have for protecting marine biodiversity. Successful MPAs are key contributors to a more climate- change resilient economy,” said Pascal.
In 2020, Blue finance created the Blue Alliance NGO with the support of the United Nations, the Global Fund for Coral Reefs (GFCR) and the International Union for Conservation of Nature (IUCN).
Blue Alliance manages the MPA network and related projects alongside local authorities in North Oriental Mindoro.
This island province in the western part of The Philippines encompasses the Verde Island Passage - recognised as a global shore fish biodiversity hotspot, this ocean channel supports more than 2 million people.
The network currently comprises 12 MPAs which together protect some 70km of coastline and 52km2 of coastal marine ecosystems, including a UNESCO biosphere reserve. Currently, 30 rangers, community officers and managers are employed to implement core MPA activities.
This funding will allow Blue Alliance to enhance the management and protection of coral reef ecosystems, develop sustainable revenue mechanisms for the MPA network and contribute to the achievement of multiple UNDP Sustainable Development Goals (SDGs), namely 1, 5, 8, 13, 14 and 17.
Blended finance unlocks commercial capital by combining it with philanthropic capital to improve project design and execution, enabling the projects to meet the investor’s criteria.
The impact loan will be repaid through tangible 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.
Impact will be measured using recognised international standards for ecosystem integrity, species protection, livelihood outcomes including job creation, as well as gender equality and overall MPA management effectiveness.
The funding will also support the development of innovative tools to measure impact which can be applied to other MPAs in the future.