Conservation investment blueprint: Public-private partnership for marine protected areas developed based on the case study of blue finance
The report outlines a conservation investment blueprint using public-private partnerships (PPPs) to manage marine protected areas (MPAs). Blue Finance structures collaborative management agreements and sustainable financing mechanisms to enhance marine biodiversity, support local economies, and improve climate resilience. The model combines impact investment, tourism revenues, and government collaboration for long-term MPA sustainability.
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OVERVIEW
Overview of the conservation need and opportunity
Coral reefs provide biodiversity and human benefits, yet over 60% face threats from unsustainable fishing, tourism, pollution, and coastal development. Marine Protected Areas (MPAs) are key conservation tools but lack funding. Collaborative management partnerships, such as those by Blue Finance, offer financial sustainability for MPAs through structured agreements and financing mechanisms.
How the blueprint contributes to conservation goals
The blueprint enhances coastal biodiversity through blended finance in Public-Private Partnerships (PPPs) for MPAs. Blue Finance aims to manage 20 MPAs by 2030. Expected impacts include protecting 25,000 km² of coral reefs, benefiting 200,000 households, and improving climate resilience. A pilot PPP in the Dominican Republic covers 8,000 km², with 15 other projects in development across various regions.
Key metrics
Environmental improvements include coral health and biodiversity. Social benefits involve fishery productivity and eco-tourism employment. Financial sustainability is measured through revenue from visitor fees and sustainable tourism models.
The Business model
MPAs are co-managed by non-profit Special Purpose Entities (SPEs) under PPP agreements. Revenue comes from statutory fees, tourism, and other financing mechanisms. Initial costs are covered by impact investors and donors, with development funders providing risk guarantees. Governments retain regulatory roles, while SPEs manage daily operations and enforcement.
Organisation and governance
Governments sign renewable 10-year agreements with non-profit entities, including NGOs and community groups. A multi-stakeholder committee oversees operations. SPEs operate independently to manage liability and risk. Blue Finance facilitates partnerships and long-term management support.
Dominican Republic business model for blended finance
The “Arrecifes del Sureste” MPA covers 8,000 km² and includes major tourism hubs. It is managed through a 10-year agreement with a local non-profit. Revenue sources include statutory fees and an educational visitor centre. The project secured US$3 million in investment, requiring US$1.4 million annually for operations. Blue Finance arranged impact investment blended with philanthropic and development funding.
Products and services being sold
The co-management entity connects marine ecosystems with tourism businesses. Revenue comes from visitor experiences and a marine life exhibit centre, supporting biodiversity and local economies.
Cash Flows and commercial sustainability
Annual revenue is projected at US$1-2 million, with 260,000 visitors per year. Fixed expenses average US$0.7 million. The break-even point is expected within two to three years. Debt financing supports capital expenditures, with profits reinvested into the MPA.
External dependencies
Successful MPAs require strong local NGOs, supportive legal frameworks, and committed governments. Tourism infrastructure and demand must sustain revenue. Political stability and regulatory support are crucial.
Risk management
Risks include tourism fluctuations, financial underperformance, enforcement challenges, environmental changes, and political instability. Mitigation strategies involve conservative revenue projections, stakeholder engagement, diversified visitor experiences, and financial guarantees. Climate risks are addressed through resilient infrastructure.
The investment model
Funding combines impact investment debt with philanthropic grants. Each PPP requires US$2.5 million in debt financing, with a total projected investment of US$50 million for 20 MPAs. Investors assume market, management, and environmental risks. Some investments are secured through USAID guarantees. SPEs repay debt through visitor revenue.
Replicability and scalability
Current projects are in the Caribbean, with planned expansions in Southeast Asia and West Africa. Countries with designated MPAs and legal PPP frameworks are viable for replication. Addressing local stressors is crucial to sustaining marine biodiversity globally.
