Press Release: Rare Unveils World’s First Impact Bond for Small-Scale Fisheries
Today, Rare publicly unveiled a first-of-its-kind small-scale fisheries (SSF) Impact Bond, the world’s first such bond specifically targeting the small-scale fisheries sector. Rare initially shared details of the SSF Bond during an event at COP28 focused on financing ocean climate action. The SSF Impact Bond will finance the community-led co-management of small-scale fisheries, a proven pathway to meeting the needs of people and nature. The initial investment will fund the Bond’s pilot: the establishment of five new community-based conservation management systems in Southeast Sulawesi, Indonesia called “Managed Access with Reserves (MA+R).”
In September 2023, Rare, with support from Levoca and funding from the Pershing Square Foundation, successfully completed the design and technical feasibility study for the SSF Impact Bond. The United Kingdom’s Department for Environment, Food and Rural Affairs (DEFRA), became the first outcome funder through a contribution agreement with the Ocean Risk and Resilience Action Alliance (ORRAA).
“Philanthropy alone is not enough to finance the conservation of ocean ecosystems, on which both nature and people depend,” said Kate Schweigart, VP of Innovative Finance at Rare. “This first-of-its-kind Impact Bond creates a pathway to scale that attracts both private capital and public donors by lowering the risk of investing in community-led conservation, which we know is good for local people, economies and nature. By paying for outcomes, we can attract the kind of investment we need to achieve 30×30 and the Sustainable Development Goals.”
The SSF Impact Bond is based on an outcome-based financing (OBF) structure. The key mechanism behind OBF is that investors are repaid by outcome funders only when pre-defined results have been achieved and independently verified. OBF models have been successfully deployed in other sectors, such as health, education, and poverty alleviation. As a new blended finance vehicle, the SSF Impact Bond offers the opportunity to scale solutions for helping countries deliver on their goals for protecting 30 percent of land and sea by 2030 (30×30).
The SSF Impact Bond will be scaled through three rounds, mobilizing up to US$160 million to protect, restore and sustainably manage thousands of hectares of coastal ecosystems. The impact bond’s launch is targeted for early 2024. Importantly, this first-of-its-kind SSF Impact Bond will de-risk future investment in small-scale fisheries and the blue economy.
Photo courtesy of Devi Puspita Amartha Yahya.