Financing Landscape Restoration; case study
The role of PPP-type financing
Although for the most part, Landscape restoration generates environmental public goods, the immediate benefits can be both private and public. The scale of investments, long timeframe and public dimensions of the benefits make landscape restoration a good candidate for Public, Private, Partnership arrangements. Outstanding challenges however, pertain to how to ensure the right incentives are in place for private entities, and performance metrics, explicit enough, to serve as basis for long-term engagements.
There is no one widely accepted definition of Public-Private Partnerships (PPP). The PPP Knowledge Lab defines a PPP as “a long-term contract between a private party and a government entity, for providing a public asset or service, in which the private party bears significant risk and management responsibility, and remuneration is linked to performance”. Historically, PPPs are long-term contracts where the private sector designs, builds, finances and operates an infrastructure project .
PPP is nevertheless, an attractive notion, rapidly gaining in popularity, and one that is particularly relevant to landscape restoration. An increasing number of countries are enshrining a definition of PPPs in their laws, each tailoring the definition to their institutional and legal particularities.
Our analysis will not seek to align or limit PPPs to the letter of the Law in any one country. We are aware our constituency have their own understandings of PPPs. So, our intention here is to enable appraisal of different partnership arrangements encountered in practice, against a gradient of factors drawn from PPP orthodoxy. We use Project’s experience and environment, as well as notions of landscape restoration, to illustrate how partnerships between public, private and community entities; and even with markets, can help deliver restoration for people and the planet. In fact, we argue that, because of the shared, complex ecosystems benefits and challenges of landscape restoration, PPP-type arrangements are the most ideal mechanism for mobilizing required material and human resources. Below, we analyze some PPP-type relationships, where Project has either shown interest or been involved; and which holds potentials to support landscape restoration.
Private sector development of State Forests in Ghana.
• Government of Ghana – FORM Ghana partnership: The project to establish 11,700 Ha of Teak
(90%) and indigenous species (10%) in degraded Forest Reserves in Ghana, is the first major PPP-type arrangement for landscape restoration intervention in Ghana and in West Africa. This was established in March of 2017; 6 years after the ROAM and 2 years after Ghana pledged to restore 2 million hectares of degraded landscapes. The project commenced with US $14 million in co-financing from the African Development Bank, and a $10-million concessional loan from the Climate Fund of the Forest Investment Program (FIP). This direct reforestation project is focused on previously degraded State forests with minimal risks of conflicts with local people.
There is however, keen interest regarding how FORM will manage the 14,000 ha of degraded forest land, acquired in community areas around Akumadan and Berekum, North of Kumasi, in the Ashanti and Brong Ahafo regions. Reforestation, even with minimal diversity is a welcome intervention. Monitoring data regarding the ecosystem significance and geo-locations of the restoration of the forest reserves remains scarce, and some action is needed there.
Furthermore, as a PPP- inspired project, the community lease of 50 years, long enough, given the nature of the crop, is a strength. Important lessons of governance will subsequently be learned from the envisaged tripartite Commercial Benefit Sharing Agreements (CBSA) set-up between the Government of Ghana (GoGh), the local communities and FORM Ghana, with respect to long-term use of the 14,000 ha. However, for the relationship to move more positively along the gradient of “ideal” PPPs FORM Ghana must be seen to significantly invest and perform, outside and beyond its regular business remit. For the moment, it is argued that more can be done to the program’s PPP credentials by moving beyond the “business as usual” approach to reforestation (despite the 10% indigenous trees quota).
Pro bono technical assistance:
• CASE STUDY 1: The Pyxera / IBM – AbC partnership: In 2017, Pyxera, an enterprise catalyst, NGO
based in Accra, Ghana helped facilitate a partnership between the US company – IBM Inc., and the Resource Center of the Abidjan Convention (AbC) – a Inter-governmental entity and partner of the WA BiCC/TetraTech Project.
A well-functioning Abidjan Convention delivers environmental public goods or global benefits such as coastal and marine biodiversity conservation, restoration of degraded mangroves, and improved coastal livelihoods. In this instance, IBM provided “pro bono” technical expertise and materials to the AbC. The main reason which can be advanced for this partnership, is Corporate Social Responsibility (CSR) or Public Relations (PR); and the choice of AbC as the beneficiary, was purely opportunistic, based on the WA BiCC/TetraTech Project’s networking skills. This renders the partnership somewhat dependent on solicitation and less sustainable. Furthermore, even a well performing AbC has no obvious or direct interdependence with IBM Inc. For instance, if IBM Inc. were a private Shipping Company, a private Maritime Logistics Company, or Fishing Company, then Integrated Coastal Zone Management (ICZM) – which is an investment priority of the AbC, can then be directly linked to quantifiable benefits to a private company; and quid pro quo with the AbC will be mutually beneficial. And thereafter, only a long-term mutually beneficial relationship; even based on some form of “engagement” would strengthen such a PPP-type relationship.
However, a strength in this type of PPP-type relationship is that IBM’s “pro bono” services were outside or additional to its normal course of doing business.
• CASE STUDY 2: Pyxera/3M – Project 1; conceived in 2019 to go into fruition in 2020, the
subject matter here is a PPP – type relationship, co-facilitated by the WA BiCC/TetraTech Project and Pyxera, between 3M – a US Conglomerate, (working on Industry, worker safety, health care, and consumer goods); and Project 1 (a the WA BiCC/TetraTech Project grantee), and not-for-profit handcraft association, based in Ghana. GM works in partnership with State-Supported Management Entities, the Community Resource Management Areas (CREMAs) in the Lower Volta River basin ecosystem, south eastern Ghana. The role of the CREMAs in the coalition is facilitated by the Nature Conservation Research Council (NCRC) – a nonprofit organization.
The proposition in this PPP-type relationship is that, 3M experts on company Sabbatical, will commit paid-time towards providing pro bono technical assistance to help GM develop its upstream supply chain of environmentally-friendly raw materials, by (i) developing new products, (ii) new partnerships and (iii) via appropriate messaging. The GM business model is unique, simple and successful; and based on appealing to an inner, sense of responsibility in consumers, by using the full story of the product development; human and environmental benefits, to market the products.
An important group of beneficiaries in the value chain of the current GM “fibers for Change” p
roject, are riparian communities living in the degraded forest areas along the lower Volta Basin ecosystem, near Akuse, in the Eastern Region of Ghana. The main raw material in this chain is the invasive water Hyacinth plant in the Volta river. Direct benefits of a successful GM in this venture would include improved livelihoods of riparian communities, recovery of ecological functions of the Volta river and better management and restoration of degraded landscapes.
Here too, there is absence of a direct relationship between 3M’s technical assistance and its business model; enough to build a long-term relationship between them and GM. The ideal scenario for sustainability, would be to seek a private company whose business model is more directly linked, either through their value chain or within the landscape, to that of GM.
CASE STUDY 3: PPP-type Catalysis for Small Projects:
From the outset, though picking up considerably in recent times, Project are catalyzing partnerships and or association between nonprofit and for-profit micro-enterprises and small businesses. Such is also being encouraged between different nonprofits, but with complementary areas of focus; supporting them to jointly engage in economically profitable activities with beneficial ecosystem impacts. Three of such organizations can be considered under a PROJECT Scenario; Project 1, Project 2 and Project 3 are described in Table 3 much earlier in this report. By analyzing the impact pathways of their activities and deliverables, an intuitive relationship with restoration is thus established.
However, additional, important lessons are expected from these PPP-type initiatives with potential to strengthen ecosystem services, including through reduced degradation. However, right away, some of their most important weaknesses and opportunities include the following;
Time-frames: the longer the time-frames the better the chance that a PPP-type initiative will build incentives for the private sector. Therefore, longer term projects and initiatives would tend to be more attractive to the private sector, especially as environmental benefits invariably take a long time to materialize and be evaluated. Longevity also gives private sector partners the lee-way to offset start-up investment costs and manage risks.
Size of the Investment: The bigger the commitment, say by the public sector, the more likely it is for a forward-looking private sector entity to engage. One way to circumvent the problem of size is to encourage aggregation of small entities (such as Project’s micro businesses and enterprises) with similar goals to coalesce according to some appropriate model. Such a strategy has not yet been tried in the landscape and may require creativity, outside the comfort zones of many donors. To facilitate this however, requires making the agglomeration and ecosystems case; by first properly situating investments across a landscape and being more explicit about what ecosystem, services are being addressed. It should then be feasible, through spatial analyses and ground truthing to establish how connectivity in the landscape and the micro-business will support to raison d’être of the landscape investments. It will nevertheless, require time for such a system to be put in place and tested.
Finally, PPP-type investments that generate environmental public goods do not characteristically exhibit the linkages between high initial capital investment requirements and strong demonstrable performance commitments of traditional PPPs. Building green infrastructure through various forms of landscape restoration; afforestation, reforestation, natural regeneration, etc. is a slower process which can be successfully initiated piece-meal at relatively low-cost. They may however, not be individually attractive to the private sector unless incentives such as aggregation in space is done, and other steps can be taken.
Other Financing models
Two other forms of financing landscape restoration have been encountered and or are under implementation within the MRU. These are (i) the Grants; e.g. the GEF grant to the MRU with IUCN as executing agency; the WA BiCC/TetraTech Project grants to Big International NGOs (BINGOs) working across the MRU landscapes and (ii) more localized Pay-for-work financing in the Sierra Leone Coastal landscape Complex.
A range of restoration-type interventions supported by the WA BiCC/TetraTech Project across river basin ecosystems and High Biodiversity Value Forest are described in Table 3. These interventions are supported through grants to BINGOs provided by the WA BiCC/TetraTech Project. An attempt has also been made in Table 3 to describe the Geo-location (spatial disposition) of these activities and thereby, deduce a part of their landscape or ecosystem contribution through connectivity. However, more concerted work needs to be carried-out to understand and domesticated the phenomena of landscape connectivity and impacts; including an evaluation of the scope of interventions/activities required to achieve a desired impact.
The Pay-for-work model was tried-out in the degraded mangrove areas of the Sierra Leone Coastal Landscape Complex. The purpose of the Pay-for-work in the SLCLC was not to finance restoration per se; although payments served as incentives for local participation. It was intended to facilitate first stage establishment of mangroves to facilitate progressive colonization and natural regeneration.
Nevertheless, through the Pay-for-work scheme, some important lessons were learned. The first is the extremely high cost of not properly targeting mangrove restoration – through a robust opportunities assessment; and ending up with heavy losses and or destruction. The second is the dire need for sound silviculture and nursery management skills and practices in the high-risk coastal landscapes, where water salinity can wipe-out an entire nursery of plants if badly managed. Thirdly, there is a need to develop a robust quid pro quo incentive system, for community involvement in overall Integrated Coastal Zone Management, including mangrove cultivation and restoration. And once such a system is decided upon and appropriate, additional knowledge and understanding about operability should be acquired – and then to go forward decisively to implement a holistic mangrove restoration programme.