To support the 2024 agenda of the G20 Sustainable Finance Working Group, this report presents case studies that have used blended finance to surpass barriers to investments in Nature-based Solutions (NbS).
The wide scope of NbS generates unique financing considerations. NbS is an overarching term for varied approaches spanning multiple sectors, such as fisheries, forestry, and agriculture. Nature—and the benefits of NbS—is considered a public good, which is often dispersed among a multitude of stakeholders and difficult to capture and monetize. As a result, financing NbS pose different considerations than other areas of climate action.
We can apply lessons from other sectors, but there is no one-size-fits-all financing approach for NbS. Blended finance has been used to mitigate various risks in mature sectors, such as renewable energy, with successful approaches being transferred from developed economies to emerging economies. While NbS-relevant sectors often face similar challenges—e.g., country, currency, and credit risks—markets for such interventions are at an early stage, requiring efforts to create and prove the viability of commercial investment at scale.