Increasing Private Sector Investments in Forest and Landscape Restoration and Land Degradation Neutrality

On the occasion of the Committee on Forestry and the World Forest Week organized at FAO headquarters from 18 to 22 July 2016, FAO and the Global Mechanism of the UNCCD joined forces to organize a side-event: “Sustainable Financing for Forest & Landscape Restoration and Land Degradation Neutrality. What innovations are needed for effective financing mechanisms and increased private sector investments?”

The side-event was an opportunity to remind how Forest & Landscape Restoration (FLR) and Land Degradation Neutrality (LDN) implementation can deliver significant contributions to climate change adaptation and mitigation and are important milestones on the road towards an inclusive green economy through their potential to create decent jobs and increased incomes for local populations. More importantly the side-event aimed, as a priority, at:

• Promoting relevant approaches to mobilize private sector finance to implement FLR and LDN;
• Fostering dialogue between stakeholders involved in FLR & LDN financing in order to share lessons learned and good practices of effective financing mechanisms;
• Identifying gaps and challenges to be addressed in the future and discussing the relevance of increased collaborative approaches to seize synergies between financing opportunities.

The event enabled over 50 participants to learn about some of the ongoing innovations and to discuss gaps and challenges for increased private sector investments. As Mr. Abderrahim Houmy, Secretary General of the High Commission on Water, Forests and Combating Desertification of Morocco explained, “Corporate Social Responsibility has proven to be a significant driver in Morocco where the Partnership for Moroccan Forests operates as a catalytic platform to facilitate partnerships between the forest administration and responsible companies”.

Moreover, international cooperation agencies are able to provide significant advisory services to partner countries in building their enabling environment for increased financing, for example through the development of projects eligible for climate finance. Mr. Mark Davis, Deputy-Director for the FAO Climate and Environment Division, indicated the number of opportunities offered by the Green Climate Fund, especially as a way to leverage private sector investments.

Participants underscored how other innovative funding mechanisms should be explored: for example crowd funding initiatives which enable a large mobilization of the general public towards FLR and LDN projects. “Crowd funding is a way to bring small amounts of funds to small projects, which most financing partners are not able to provide, while this can achieve a significant development impact on the field”, stressed Ms. Pilar Valbuena, International forestry expert.

In order to seize the full potential of forests and mobilize resources at scale, the contributions of forests to biodiversity, combating desertification and climate change mitigation and adaptation must be unleashed. Mr. Ulrich Apel, Senior Environmental Specialist at the Global Environment Facility (GEF) acknowledged that “It is critical to find synergies between Rio conventions when addressing financing mechanisms for FLR and LDN”.

Importantly, opportunities emerging from the Land Degradation Neutrality Fund (LDNF) project were discussed as well as partnerships need to address the new LDN market. Indeed the LDNF project offers possibilities of blended finance and a mix of investments and technical assistance which are required when implementing large scale FLR projects.

 Ludwig Liagre, Innovative LDN Finance expert, underscored that the LDNF project will apply strict environmental and social safeguards to ensure the sustainability of investments.

Mr. Douglas McGuire, Coordinator of the FAO FLR Mechanism and chair of the event, in his concluding statement said, “We are on the way to finding synergies between financing sources and to build relevant financing alliances. Nonetheless more efforts should be developed to design sustainable incentives to private sector investors and project developers to engage in FLR and LDN on the long-term”.