Updated: Sep 22
Blended finance has the potential to revolutionise ocean conservation efforts, according to the founding Chair of the Executive Board of the Global Fund for Coral Reefs (GFCR). The GFCR, launched in 2020, is the first UN trust fund dedicated to Sustainable Development Goal 14 (SDG 14), "Life Below Water." It is the largest blended finance mechanism focused on ocean conservation and can serve as a model for others working to reverse biodiversity loss.
The Importance of Coral Reefs
Coral reefs are a critical ecosystem that impacts the livelihoods and food security of an estimated one billion people. However, global climate change and local stressors such as coastal development, overfishing, plastic, and nutrient pollution have put coral reefs at extreme risk. Over half of the world's coral reefs have already been lost, but it is not too late to act.
The Funding Gap for Ocean Health and Coral Reef Conservation
Despite the importance of preserving coral reefs, funding for ocean health and coral reef conservation has been scarce. Reports suggest that $175 billion per year is needed to achieve SDG 14 by 2030, yet less than $10 billion was invested between 2015 and 2019.
The Role of Blended Finance
Blended finance mechanisms like the GFCR can make a huge impact by bringing together donors, nations, UN agencies, foundations, NGOs, and private investors to align private investment with public good to conserve coral reefs, deliver returns on investment, and create economic opportunities in local communities. Blended finance addresses the funding gap that governments and philanthropy cannot close on their own. It attracts private investment in sustainable development by using capital from public and philanthropic sources.
The GFCR as an Example of Blended Finance in Action
The GFCR has mobilised over $190 million for coral reef conservation and restoration in just two years. Moreover, at the Convention on Biological Diversity COP15 in December 2022, thirteen countries and the European Union pledged to leverage international public finance to mobilise an additional $2 to $3 billion in private finance through the GFCR by 2030. The GFCR has funded numerous projects that demonstrate how collaboration works in practice. For example, a combination of grants, debt, and equity investments are now enabling a local private company in Fiji to establish a sanitary landfill and recycling facility to address the leaching threats from an open dumpsite that was degrading the nearby Great Sea Reef ecosystem. The project will generate revenue for the company, support local jobs, and improve the resilience of coral reefs.
Monitoring and Evaluation
Blended finance models like the GFCR prioritise monitoring and evaluation (M&E) to promote effective program management, transparency, and accountability. GFCR is investing in M&E to establish an evidence base to learn what's working and what's not, and share that knowledge with the broader community. For example, the REEF+ Accelerator is an online platform that hosts hundreds of solutions and knowledge posts that are being shared broadly across the coral reef community.
The Promise of Blended Finance
While blended finance models like the GFCR are still in their early stages, they are already demonstrating the power of this approach to mobilise action to preserve coral reefs. Blended finance offers one of the most promising models for reducing Sustainable Development Goal funding gaps. It increases the impact of finite development and philanthropic resources by using those funds to leverage the trillions of dollars of private capital available in global markets. With more innovative finance approaches like blended finance, we can significantly change the trajectory of the coral reef crisis.