October 19, 2016
Luxembourg. (October 18th, 2016) –Althelia Ecosphere and the U.S. Agency for International Development (USAID) have signed a new risk sharing guarantee through USAID’s Development Credit Authority (DCA) that will assist the newly launched Althelia Sustainable Ocean Fund to provide impact financing for sustainable and responsible ocean economies.
The Althelia Sustainable Ocean Fund (“SOF”) is a new public-private partnership dedicated to creating, accelerating, and implementing sustainable wild-caught fisheries, aquaculture and other blue economy projects in developing countries and small island states, whilst applying best-in-class social and environmental governance and impact reporting. The fund is pioneering an approach to deliver not only strong investor returns but also improved ecosystem health, marine conservation and associated livelihood benefits such as food security and economic empowerment for coastal communities.
The DCA Facility provided by USAID will allow private capital to flow, at scale, towards financing sustainable business models in the ocean economy by providing loan guarantees directly to portfolio investments in the SOF. The guarantee will support this first of its kind investment strategy, as SOF deploys approximately $100 million across a portfolio of between 10 to 20 project investments.
Biomass from the global ocean provides food security, nutrition and income to 2.6 billion people and fishing supports a $260 billion global industry. There is growing evidence that investments in modern fisheries sustainable management approaches can reverse the decline in wild fish populations, restore their natural productivity and increase profitability, and thus provide livelihood and food security benefits to local fishing communities. The Sustainable Ocean Fund, coupled with USAID’s loan guarantee, will catalyze investments in sound and responsible fishing and ocean practices.
An initial pipeline of target investments has been identified in Latin America, the Caribbean and Asia. Projects range from supporting fishing communities make the transition to sustainable and secure fishing practices through to low impact aquaculture operations, supporting good quality jobs and providing a dividend for ecosystem protection. The fund will also invest in responsible and transparent seafood supply chains, marine protected areas, wastewater treatment and small-scale coastal renewable energy all of which preserve and enhance coastal ecosystems and marine biodiversity.
“This new USAID risk sharing guarantee for the Althelia Sustainable Ocean Fund will help protect private investor’s down side risks which allow us to deploy meaningful investments to support sustainable marine projects over the long term, thereby accelerating the transition to sustainable business models and better environmental stewardship of ocean resources.” said Simon Dent from Althelia Ecosphere.
“Ninety percent of the people who depend on fishing for their livelihoods live in developing countries, so we cannot fully support development without addressing the over-exploitation of fisheries,” stated USAID Associate Administrator Eric Postel. “By working with the Althelia Sustainable Ocean Fund, USAID is leveraging the resources of the private sector to promote and invest in sustainable fishing and aquaculture practices around the world, thus protecting both ocean ecosystems and the livelihoods of some the world’s poorest.”
Joining several other large institutional investors, the European Investment Bank has also given notice this week that the Althelia Sustainable Ocean Fund is under appraisal for possible investment.
Collectively, the global ocean covers 70% of our planet, with more than 350 million jobs linked to the ocean through fishing, aquaculture, coastal and marine tourism. Ninety percent of the people who derive their livelihoods from fishing live in developing countries.
However, over-fishing, largely due to poor management is exhausting this critical common global resource, with 90% of the world’s ocean fisheries categorized as over exploited or fully exploited. Cumulative losses from fisheries mismanagement are estimated to be more than US$2.2 trillion over the last thirty years. Further as a result of expanding coastal population centers, destructive fishing and climate change, the ocean has also seen a decline of habitats with 35% of global mangrove, 30% of sea grass beds and 50% of coral reefs destroyed.
Conservation International as well as the Environmental Defense Fund are engaged as strategic partners for the Sustainable Ocean Fund. This collaboration with leading environmental organizations will ensure the fund is poised to direct investments into projects that uphold the highest environmental standards and allow for effective collaboration with stakeholders, including local communities and governments.
The U.S. Agency for International Development is leading the U.S. Government's efforts to end extreme poverty and promote resilient, democratic societies. USAID aims to shape a future in which both people and biodiversity thrive via improvements in economic prosperity, social equity and environmental stewardship. Currently, USAID works in seventeen countries to strengthen fisheries management for food security, livelihoods and biodiversity conservation. For more information about USAID and its programs, please visit www.usaid.gov.
USAID’s Development Credit Authority (DCA) works with investors, local financial institutions, and development organizations to design and deliver investment alternatives to mobilize local financing for USAID priorities. To date, the DCA has helped to mobilize $4.8 billion in financing across 76 countries. For more information about USAID, visit www.usaid.gov/dca.
About Althelia Ecosphere
Althelia Ecosphere has been established to demonstrate that financial returns can be fully aligned with the preservation of nature and with social development. It’s first fund, the Althelia Climate Fund invests in agroforestry, REDD+ and sustainable land use projects that transform land-use practices whilst delivering environmental credits and sustainable commodities. Althelia Ecosphere is committed to bringing its expertise and capital to define pathways to deliver innovative solutions to climate and environmental finance.
To find out more about how Althelia is working see www.althelia.com
For more information, contact:
+44 207 229 9551
Biodiversity Policy Advisor