INSTRUMENT ANALYSIS SEPTEMBER 2024 STRUCTURED FINANCE FOR NATURE

The Structured Finance for Nature (SFN) instrument uses a Special Purpose Vehicle (SPV) in Singapore to aggregate a diversified portfolio of natural assets, combining equity, mezzanine finance, and green bonds. It aims to overcome barriers such as high upfront costs and small project sizes to protect and restore one million hectares of forest and wetlands. The pilot project in Agusan del Sur, Philippines, focuses on protecting 91,000 hectares of forest, with future expansions planned for Cambodia, Bhutan, and Indonesia. The model emphasizes high-integrity carbon credits, a 20% minimum benefit-sharing allocation for local and Indigenous communities, and real-time monitoring via a proprietary dashboard.

• The SFN instrument aims to raise USD 100 million in private capital to protect and restore one million hectares of ecosystems in the Philippines, Indonesia, Cambodia, and Bhutan.
• The financial structure utilizes a blended capital stack consisting of approximately 25% equity, 25% mezzanine finance, and 50% green bonds, managed through a Special Purpose Vehicle (SPV) based in Singapore.
• The Agusan pilot project in the Philippines targets the restoration of 91,000 hectares of forest to protect the Agusan Marsh Wildlife Sanctuary, with an expected total of 12 million tCO2e in avoided emissions and removals over 40 years.
• SFN implements a benefit-sharing mechanism that allocates a minimum of 20% of all free cash flow (equity distributions) to local and Indigenous communities.
• The portfolio strategy prioritizes the protection of intact ecosystems, committing 60% of the portfolio to these areas to address biodiversity loss and habitat fragmentation.
• To mitigate integrity risks and ensure transparency, SFN uses a proprietary dashboard that monitors over 140 unique data points across each asset in real-time.
• The full portfolio is estimated to avoid approximately 2.5 million tCO2e and remove over 200,000 tCO2e annually, while protecting around 400 endangered and vulnerable species.

APA

Climate Policy Initiative (2024). INSTRUMENT ANALYSIS SEPTEMBER 2024 STRUCTURED FINANCE FOR NATURE. https://www.climatepolicyinitiative.org/wp-content/uploads/2024/09/Structured-Finance-for-Nature_Instrument-Analysis.pdf

Chicago

Climate Policy Initiative. INSTRUMENT ANALYSIS SEPTEMBER 2024 STRUCTURED FINANCE FOR NATURE. 2024. https://www.climatepolicyinitiative.org/wp-content/uploads/2024/09/Structured-Finance-for-Nature_Instrument-Analysis.pdf.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=INSTRUMENT ANALYSIS SEPTEMBER 2024 STRUCTURED FINANCE FOR NATURE |date=September 2024 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2024/09/Structured-Finance-for-Nature_Instrument-Analysis.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2024instrument, author = {{Climate Policy Initiative}}, title = {{INSTRUMENT ANALYSIS SEPTEMBER 2024 STRUCTURED FINANCE FOR NATURE}}, institution = {Climate Policy Initiative}, year = {2024}, month = sep, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2024/09/Structured-Finance-for-Nature_Instrument-Analysis.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }