Focus on Natural Capital
Banking on nature

The new Natural Capital Financing Facility (NCFF) – a joint initiative of the European Commission and the EIB – supports projects that protect and promote biodiversity and climate adaptation with targeted loans and investments. 2017 saw the first loan signed under the programme.

The food we eat, the water we drink, and the plant materials we use for fuel, building materials and medicines are ‘goods and services’ that nature provides. They derive from ‘natural capital’: geology, soil, air, water, and all living things, flora as well as fauna. Protecting and supporting natural capital therefore means nothing less than safeguarding the future of life on Earth. In more concrete terms, investing in natural capital is a prerequisite for halting the loss of biodiversity and adapting to climate change.

Doing so requires increasing investment in natural capital. This is why the EIB and the Commission partnered to create the NCFF, a financial instrument that supports projects delivering on biodiversity and climate adaptation through tailored loans and investments, backed by an EU guarantee.

Finance and technical assistance

The NCFF provides funding to projects that promote the conservation, restoration, management and enhancement of natural capital for the benefit of biodiversity and adaptation, including ecosystem-based solutions to challenges related to land, soil, forestry, agriculture, water, and waste in the European Union.

The NCFF consists of a combination of the following two components:

  • the finance facility provides financing from EUR 2 million to EUR 15 million,
  • the technical assistance facility gives every project a grant of up to EUR 1 million for project preparation, implementation and the monitoring of outcomes.

The NCFF combines EIB financing and the Commission’s funding under the LIFE Programme, the EU’s funding instrument for the environment and climate action. The facility is currently in a pilot phase and is able sign projects until 2021.

Making Europe ‘a wilder place’

The first loan under the new financing facility was signed in April 2017. The recipient of the EUR 6 million was Rewilding Europe Capital (REC), an investor devoted to ‘making Europe a wilder place’. The loan is expected to provide support for over 30 nature-focused businesses across Europe. The company is part of the Rewilding Europe Foundation in the Netherlands, which promotes wild nature as an important and inherent aspect of Europe's natural and cultural heritage. REC finances nature-based businesses and uses a unique levy system to help support conservation and rewilding initiatives.

Duration: 1:08 minutes

The rewilding areas that can be supported by the agreement comprise 38 different sites in the Natura 2000 network. They are: Western Iberia (Portugal), Velebit Mountains (Croatia), Central Apennines (Italy), Southern Carpathians (Romania), Danube Delta (Romania), Rhodope Mountains (Bulgaria), Oder Delta (Germany/Poland) and Lapland (Sweden). These investments could also boost the populations of iconic and endangered European wildlife species such as the European bison, brown bear and black vulture as well as the pelican and white-tailed eagle of the Danube and Oder Delta.

For more context, listen to the podcast on environmental finance, with EIB experts James Ranaivoson, Jane Feehan, and Eva Mayerhofer.