The WWF Landscape Finance Lab and its partners have developed a financial tool that facilitates investment in green and blue Fijian businesses dedicated to helping regenerate the Great Sea Reef . This is the first in a series of articles about the Lab’s work in Fiji.
It is difficult to overstate just how central the Great Sea Reef has been to Fijian life for hundreds if not thousands of years. Locally known as Cakaulevu, the reef provides food, income and natural protection to coastal habitats. Indeed, some 40% of Fiji’s population directly depend on the reef for their food and livelihoods.
It is the third longest reef in the world at over 200 km, covers more than 200,000 sq. km and is home to thousands of species of fish, mammals, flora and fauna. Cakaulevu plays a significant role in the cultural heritage of the Fijian people and has become a popular global tourist destination. A full 65 percent of foreign exchange earnings and 20% of GDP in Fiji is directly derived from the reef either through tourism or from other reef-related economic activity.
Unfortunately, in this time of global climate change and rapid economic development, it may come as no surprise that Cakaulevu is under a tremendous amount of stress. Although the reef is one of the most resilient in the world, overfishing, agricultural run-off and, of course, the adverse effects of climate change –primarily bleaching and acidification –are taking their toll and threatening to drastically reduce the reef’s natural and economic productivity.
“We have only two to three decades to deal with the anthropogenic threats, which are causing pressure on the reef, and we cannot as a single country address the big global threats,” said Jodi Smith, Director of The Earth Care Agency and lead on financing mechanisms to the Great Sea Reef Resilience Programme. “We can, however, affect change by addressing local human generated threats, such as the destruction of habitat, overfishing and unsustainable production, and waste and pollution.”
A comprehensive solution
In response to this existential challenge, Fiji has placed a high premium on saving and restoring Cakaulevu. The government has supported communities to designate a number of marine protected areas (MPAs) and set aside other areas for continued fishing and economic use. This is now replenishing some fish stock and slowing the reef’s degradation, however Fijian officials have long recognised that more comprehensive and concerted action is needed.
In 2017, WWF-Pacific and the WWF Landscape Finance Lab launched, with various Fijian government ministries and other partners, the Great Sea Reef Resilience Programme, which aims to ensure that the Great Sea Reef and coastal ecosystems are healthy and resilient to a changing climate. To do so, the programme is focusing on: 1) holistic land and marine use planning, ecosystems management and climate buffering; 2) developing and nurturing existing financial systems for sustainable natural regenerative production and practices with market outcomes; and 3) designing and strengthening systems for removal of primary wastes and pollution.
A new approach to investing in landscapes
To help support Fiji’s GSR Resilience Programme, the Lab has facilitated the much-needed flow of finance into the many components of the plan and, above all, to support green and blue businesses in Fiji.
The first key step in the Lab’s work was to perform a comprehensive analysis of the multiple sectors deemed to be regenerative and from there developed the financial tools to strengthen and assist private sector enterprises that can compliment the GSR programme.
The eventual result of this work was the formation of Matanataki, a dedicated financial partnership which sources investable businesses and attracts international investors, including private investors and international development institutions. Matanataki is a partnership between the Lab, The Earth Care Agency, Ikigai and Ennovent, a private company that specialises in under-served markets.
“People from all walks of life that have a real investment –economically, emotionally, culturally or otherwise –in the community and are committed to a healthy, resilient Great Sea Reef,” said Paul Chatterton, the Lab’s founder and lead. “We then share knowledge and expertise to guide investments that make conservation and economic growth financially sustainable.”
Matanataki is implementing a financing instrument with two components. The first is a development facility that makes loans to small and medium-sized businesses who are financially sound enough to take on debt, and the second component is a community facility that makes grants to private enterprises who are not considered low risk enough to be investable at this stage. The plan is to shore up the grant recipients enough to eventually move them into the development facility.
Thus far, Matanataki has reviewed over 120 businesses in Fiji since March 2019, and identified 37 businesses and a USD 75m investment need for bankable pipeline projects. Projects in the pipeline include a sanitary landfill and materials recovery facility, a coral reef restoration company and a plastic recycling and upcycling startup.
“We don’t just look at individual businesses, we look across supply chains to seek maximum impact both for financial return and to ensure environmental impact can be achieved at a scale which is meaningful to the Great Sea Reef ,” said Smith. “We’re looking in five key sectors for investment: regenerative agriculture, forest restoration, waste and plastic management, renewable energy, sustainable fisheries and ecotourism.”
Along with investments in these five sectors, the GSR Resilience Programme is working with partners to develop innovative insurance mechanisms for the facility to cover the agriculture and fisheries sectors as well as reef clean-up in the event of a natural disaster.
The long-term impacts will be to incentivise local companies to develop and implement sustainable business plans, help grow the Fijian economy, create sustainable jobs, and reinforce good governance and transparency. With this programme’s success, the Lab and the Matanataki leadership seeks to replicate the model and apply it elsewhere, such as potentially in Indonesia and the Solomon Islands.
“With initiatives like Matanataki and the GSR Resilience Programme, we are supporting communities and businesses in their efforts to save and rejuvenate Cakaulevu, so it continues to play a vital role in the economy and lifestyle of all Fijians,” added Chatterton.