“To protect the diversity of our natural surroundings we need to promote the diversity of our funding sources. The Natural Capital Financing Facility is a new EU funding source that helps businesses to protect nature and adapt to climate change. Now these blended funds can help biodiversity blossom and truly become an engine for growth”, said Karmenu Vella, European Commissioner for Environment, Maritime Affairs and Fisheries.
In line with this argumentation the EU has set up the Natural Capital Financing Facility, operated by the European Investment Bank. The Natural Capital Financing Facility (NCFF) is a financial instrument that combines EIB financing and European Commission funding under the LIFE Programme, the EU’s funding instrument for the environment and climate action. The NCFF will contribute to meeting the objectives set out by LIFE, in particular:
- nature and biodiversity
- climate change adaptation
As you can see below (What does the NCFF do?) there is an explicit reference to biodiversity offsets being made: “Biodiversity offsets / compensation beyond legal requirements (e.g. compensation pools for on-site and off-site compensation projects)”.
Read more on the Natural Capital Financing Facility here and see some information pasted below. See also the related press release (New European support to address climate and biodiversity challenges).
To present and explain this new instrument the European Commission is holding a workshop on 8 May in Brussels. This will cover topics including:
- Which type of projects could benefit from NCFF funding?
- What are the NCFF eligibility criteria?
- What are the key steps in the application process?
You can find the full agenda on the following link: http://ec.europa.eu/environment/life/funding/financial_instruments/documents/NCFF_workshop080515.pdf
To register, please use the online registration found on the following site: http://europe.icfi.com/ncff/
What does the NCFF do?
The NCFF will support projects that are focused on biodiversity and ecosystem services (BES).
Projects supported by NCFF will promote the conservation, restoration, management and enhancement of natural capital which can benefit biodiversity and climate adaptation. This includes ecosystem-based solutions to challenges related to land, soil, forestry, agriculture, water and waste.
Project examples include:
- Green infrastructure (e.g. green roofs, green walls, ecosystem-based rainwater collection/water reuse systems, flood protection and erosion control).
- Payment for ecosystem services (e.g. programmes to protect and enhance forestry, biodiversity, to reduce water or soil pollution).
- Biodiversity offsets / compensation beyond legal requirements (e.g. compensation pools for on-site and off-site compensation projects).
- Pro-biodiversity and adaptation businesses (e.g. sustainable forestry, agriculture, aquaculture, eco-tourism).
What are the objectives of the NCFF?
The NCFF will provide financial support to projects in order to generate revenue or save costs. In doing so, the Facility aims to prove to the market and to potential investors the attractiveness of biodiversity and climate adaptation operations in order to promote sustainable investments from the private sector.
The NCFF will employ a range of different financing options for different projects, including debt and equity financing as well as direct and intermediated funding.
These financing options will be tested in order to identify the most suitable approach, aligning funding solutions to the specific needs of the biodiversity and climate adaptation sectors.
How will the NCFF work?
The pilot phase of the NCFF project will last 3 years (2014–2017) with up to EUR 125 million being made available for investments in 9–12 operations. Depending on the project types and the specific conditions within them, the NCFF will allow the provision of direct and/or intermediated debt financing. A further EUR 10 million will be provided for technical assistance in the form of a Support Facility. This will be made available to eligible final recipients and/or financial intermediaries for project preparation, implementation, monitoring and evaluation.
Targeted projects must be located in the EU-28 and ideally have a size of EUR 5–15 million.