Delivering a payment-for-ecosystem service scheme through a technical assistance project

2021

Relevant Topic(s) Tags

Technical Assistance & Project Preparation

Climate Policies & Frameworks

Carbon Markets & Carbon Finance

Summary

With UK Partnering for Accelerated Climate Transitions (UK-PACT) support, the Malaysian startup Nature Based Solutions (NBS), formerly Rimba, worked with the State’s 'Green Financing Taskforce' to develop a framework that would allow private sector funding to be channelled into forest protection and conservation activities. NBS conducted workshops with the Taskforce to identify opportunities, address gaps, and design pathways for sustainable financing of nature-based solutions projects in the state. The project also included a networking component that held consultations with the private sector to better understand their expectations and to bridge the gap between the stewards of the land and financing requirements. A key outcome was the establishment of 30,000ha of the Kenyir forest catchment as a designated green financing pilot site. Through its networking component, the NBS secured private investment to fund the pilot. The first tranche of funding is expected to be released for the Kenyir State Park pilot site and will be enacted through a payment-for-performance scheme linked to the ecosystem services outcomes certified under Verra’s Verified Carbon Standard (VCS) and Climate, Community & Biodiversity (CCB) standards.

Key Takeaways:

Networking with private FIs: Involving the private sector early in consultation helps build buy-in, enables the co-creation of projects, and ultimately supports efforts to secure funding for pilot projects.

Creating proof points: While the project started as a pilot project, it could potentially establish precedents and replicable blueprints for other areas across Peninsular Malaysia and beyond.

Bridging the gap between public and private sectors: Understanding the roles both the public and private sector can play is important in ensuring successful implementation (i.e. private sector investment pathways and clear regulatory signals from policymakers, including establishing new frameworks or regulatory changes).