BIOFIN’s diverse finance solutions see transformative climate and biodiversity results
From protecting the ecology of the sprawling steppes of Central Asia to supporting the expansion of renewable energy in Central Africa, support from IKI and UNDP’s Biodiversity Finance Initiative is helping to move the needle on global climate and biodiversity protection goals.
Zambia’s Green Bond to finance a solar energy boost
With BIOFIN support, the central African nation of Zambia made history in issuing its first-ever green bond in 2023, valued at US$ 200 million and intended to boost the share of renewable energy in its national grid by roughly five per cent of the country’s total power production.
While this bond may seem focused solely on climate change mitigation, it also significantly contributes to biodiversity conservation.
Zambia faces a deforestation rate of 250,000 - 300,000 hectares per year, driven by unsustainable agriculture and heavy reliance on wood fuel for energy. To combat this, Zambia's National Biodiversity Strategy and Action Plan aims to cut deforestation by at least 25 per cent by promoting renewable energy. The green bond will fund 200 MW of renewable energy for Zambia's grid, marking a crucial step in reducing deforestation and supporting sustainable use.
Kazakhstan adds eight new protected areas
Two central Asian countries of Mongolia and Kazakhstan that relied on BIOFIN support for legislative reform in financing and widening biodiversity protections have seen major milestones in recent years.
When BIOFIN started working in Kazakhstan about 10 years ago, funding for protected areas was limited. Developing a new generation of management plans for protected areas has paid off and the available budget for protected areas has increased significantly, reaching US$ 70.3 million in 2023, a threefold increase compared to 2018.
As of 2023, Kazakhstan has designated over 29 million hectares as protected areas, covering 10.77 percent of the country's land. Aligning with the global "30x30" target - to protect 30% of the planet for nature by 2030 - BIOFIN supported Kazakhstan in establishing eight new protected areas and expand three existing ones.
Mongolia applies ‘user pays principle’ to finance environmental protections
Biodiversity is under acute threat in Mongolia, a country with vast landscapes and diverse ecosystems. Agricultural expansion, mining, infrastructure development and climate change are the main causes of biodiversity loss in Mongolia. With support from BIOFIN, Mongolia improved the effectiveness of a law that requires users to pay for the natural resources their businesses exploit, allowing the government to channel the funds back into environmental protections. This has led to an increase in the budget for environmental protection including biodiversity conservation. In 2023, revenues from Mongolia’s Natural Resource Use Payment Law (NRUP Law) reached US$ 11.9 million, a 170% increase compared to the previous average (2016-2021).
Projections for 2024 indicate another significant increase.
Cuba to finance forest protections through carbon bond market
Cuba’s adoption of a Payment for Environmental Services (PES) system will now allow forest owners to claim payments on the global carbon trading market for the carbon removed from the atmosphere by the trees on their land.
The payment of environmental benefits for forest carbon removals is defined as "the incentive that can be granted to a natural or legal person responsible for the management of a forest area that removes carbon from the atmosphere through sustainable forest management", according to Resolution 28 of 2024 of the Ministry of Agriculture.
The Institute of Agroforestry Research (INAF) will be responsible for the measurements related to the fulfilment of the requirements to benefit from the incentive.The United Nations Development Programme (UNDP) has promoted various innovative financing solutions in Cuba that contribute to closing the financing gaps in the realization of the country's sustainable development goals, e.g. to sustainable land management and biodiversity conservation.
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