Closing the Nature Finance Gap: Practical Solutions to Mobilize Private Investment for Landscape Restoration

The article addresses the urgent need to increase investment in nature-based solutions to meet global climate, biodiversity, and land degradation targets. According to the United Nations Environment Programme’s 2022 report, annual investment must escalate from $154 billion to $384 billion by 2025. However, private finance, which currently makes up only 17% of investment in this area, is substantially underutilized.

The Restoration Seed Capital Facility (RSCF), initiated in 2020 with support from Germany and Luxembourg, seeks to mitigate this issue by facilitating private investments in forest and landscape restoration, especially in ODA-eligible regions like Latin America, Africa, and Southeast Asia. The RSCF assists private fund managers and advisors in creating investment vehicles focused on restoration and manages grants to support the development of investment-ready projects.

The article identifies several challenges in scaling up finance for nature, including mismatches between investment sizes and project scales, slow fund deployment due to bureaucratic delays, and the high complexity of environmental and social compliance. It underscores the need for enhanced public-private collaboration to streamline processes, reduce transaction costs, and build capacities for compliance and reporting. Moreover, it calls for more inventive and market-responsive uses of concessional finance to bridge the significant nature finance gap effectively.