Agenda item 9 - Financing the delivery of the biodiversity strategy

1. Agenda item 9 -Financing the delivery of the biodiversity strategy Co-ordination Group for Biodiversity and Nature 18th meeting – 12-13 March 2015

2. Outline • Integration of nature and biodiversity in OPs, RDPs (see agenda item 5) • Progress on tracking and 2016 draft budget • Link with mid-term review and next steps: supporting contract on financing biodiversity • Scaling up private investments: update on the NCFF

3. Tracking • Current study in final stages • Workshop on 30 September • Revised methodology with more consistent approach throughout methodology • More conservative approach – in particular for ‘grey areas’ • General guidance and instrument specific guidance • Revised methodology used by Commission services for estimates in the 2016 draft budget, and updates of 2015 estimates

4. Financing and tracking • New study from February 2015 • Take stock of programming and funding availability • Identify opportunities for scaling up • Opportunities for private financing, in particular through payments for ecosystem services (small workshop foreseen in May) • Refine tracking methodology, in particular for ex post tracking. Focus on selected MS. • Workshop in autumn 2015 • Feed preliminary estimates in the mid-term review of the biodiversity strategy

5. Objectives: To encourage investments in revenue-generating or cost-saving projects promoting the conservation of natural capital to meet biodiversity/adaptation objectives and support green growth; To demonstrate to private investors the attractiveness of natural capital projects; build project pipeline € 100-125 million Investment facility during 2015-2017 Operations between €5 million and €15 million: Direct loans to individual, large projects Indirect loans through financial intermediaries aimed at smaller projects Indirect investment aimed at smaller projects via equity funds € 10 million Support facility for project development EIB executes the Facility EU contribution to the EIB of € 60 million for guaranteeing investments and financing the Support Facility. Budget comes from the LIFE programme, which is the EU’s funding instrument for the environment and climate action. Update on NCFF

6. Projects using Payments for Ecosystem Services (PES): payments involving payment or compensation for the benefits provided by ecosystems, such as cleaner water, higher soil qualiy or enhanced carbon sequestration Green Infrastructure (GI) projects: investments in natural capital that generate a range of goods and services, such as water quality, flood protection and climate change adaptation Projects developing Biodiversity offsets: conservation measures designed to compensate for the unavoidable damage to biodiversity arising from development projects. No support for compensation to comply with article 6(4) of the Habitats Directive Innovative pro-biodiversity and adaptation businesses: projects involving the supply of goods and services from conservation activities, such as sustainable forestry, agriculture, aquaculture and ecotourism. Innovation may relate to innovative approaches to ecological restoration/conservation or innovative business models NCFF - Four projectcategories

7. Projects must: Promote one or both of the following objectives: conservation, restoration, management and enhancement of ecosystems, including through ecosystem-based solutions application of ecosystem-based approaches that enable businesses and communities to address identified risks associated with current and projected impacts of climate change, including through urban, rural, and coastal green infrastructure projects. Demonstrate financial and economic benefits, including the ability to generate revenues or save costs, with overall benefits exceeding costs Contribute to the objectives of the EU LIFE programme for nature and biodiversity, and/or climate adaptation Meet the standard criteria set by the EIB for its investments NCFF - Eligibilitycriteria

8. NCFF - Latest developments and next steps • Delegation agreement signed on 19 December 2014 • Launch by two Commissioners and EIB vice-president on 16 February 2015 • http://ec.europa.eu/environment/life/funding/financial_instruments/ncff.htm and NCF_Instrument@eib.org • LIFE Committee 21 April • Promotion: • Leaflets, brochure and further development of website • Multi-stakeholder workshop on 8 May • Green Week session 'investing in nature' on 3 June • LIFE contact point training on NCFF and PF4EE on 9 June • Please, let us know any other events where we may wish to promote the NCFF • Reports and Evaluation foreseen in MAWP

9. Current NCFF Project Pipeline • Background: • Initial pipeline is based on the market study that identified 37 potentially eligible projects, of which 18 were considered priority 1. Priority was judged on the basis of relevance to meet the eligibility criteria and the maturity of the project. • Market study based on interviews with member states (all invited – 21 responded), and consultation with business and stakeholders . • Financing under the NCFF Investment Facility for an individual project is targeted at EUR 15 million and the number of projects in the period to 2017 is likely to be in the range of 9-12. • Preliminary pipeline : • 7 projects for an investment amount of EUR 67 million • Variety of types project: green infrastructure, payment for ecosystem services, pro biodiversity businesses and climate change adaptation • Variety of types of instrument: 1 equity investment, and 6 loans, of which 5 are likely to be direct loans and 1 an intermediated loan • Geographical spread of projects likely to include Finland, France, Poland , Portugal, Romania, Spain and UK

10. The NCFF Process • NCFF Due Diligence Process • Project proposals are reviewed on a continuous, i.e. basis, as they come in. Currently no new proposals have been submitted since the launch of the NCFF; • A screening process is then carried out based on the NCFF eligibility criteria, geographical spread and project typology; • EIB then submits the proposal with the preliminary assessment to DG ENV and DG Clima for approval; • Upon receiving approval, EIB then engages with the final recipient and initiates full due diligence procedures for approval of the project by the EIB Management Committee and Board. It is during this phase when the needs assessment for support under the NCFF Support Facility will be carried out; • At the point when EIB starts due diligence procedures the project will be in the EIB pipeline and therefore posted on the EIB website and the NCFF-dedicated website. • What EIB is looking for • EIB is reinitiating contact with a number of stakeholders. Some of you have been in contact with the EIB on a couple of initiatives; • EIB is specifically looking at widening the geographical spread and would welcome project proposals from Eastern European Member States, the Baltic States, the Netherlands and Belgium, Germany and the Scandinavian Member States; • By the time of the Life Committee Meeting in April EIB hopes that three projects that are currently being screened, will have been submitted for the «go-ahead» from the Designated services after which the due diligence process will be initiated.