Biodiversity conservation in Peru through sustainable investment

Project description

Title: Impact investment for the sustainable use of biodiversity in Peru (BioInvest)
Commissioned by: German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU), under the International Climate Initiative (IKI)
Country: Peru
Lead executing agency: Ministry of Environment (MINAM)
Overall term: 2020 to 2025

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Context

Peru is one of the world’s most biodiverse countries. Together with 16 other megadiverse countries, it is home to 70 per cent of the planet’s biodiversity with a wide variety of flora and fauna that is fundamental to the development and wellbeing of the inhabitants. In this context, the country has huge potential to market biodiversity products and services. Nevertheless, these resources are not being used in a sustainable manner. Biodiversity-friendly companies earn low profits and have few opportunities to  grow their business.

A major obstacle is that the  conditions for sustainable investment, particularly for impact investment, in biodiversity-friendly business models are precarious. Reasons for this are assumed high risks and the fact that the traditional capital market does not yet reward positive social and environmental impacts. In this context,  the Peruvian Ministry of Environment (MINAM) therefore intends to improve the conditions for this. It aims to leverage biodiversity and ecosystem services, enabling the current economic model to be transformed into a green economy. Sustainable value creation based on natural resources and competitiveness are also to be increased.

Objective

The conditions for impact investment and other forms of sustainable financing in biodiversity-friendly business models are improved.

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Approach

The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH supports MINAM to improve the conditions for investments based on the sustainable use of biodiversity. This will lead to increased private investments in biodiversity-friendly business models, thus improving the sustainable use and conservation of natural resources.

The project intends to improve public incentive systems to encourage the private sector to invest in biodiversity-friendly companies. Furthermore, scalable biodiversity-friendly business models will be identified and supported with advice from the start of qualification measures to the finance-ready stage. In addition, the project supports matchmaking between companies and investors. Therefore, in cooperation with the Ministry of Agricultural Development and Irrigation (MIDAGRI), the Ministry of Production (PRODUCE) and the Association of Banks of Peru (ASBANC), intends to establish advisory services for companies and develop mechanisms for mobilising private investment for this type of companies.

The project is supporting Peru in implementing national policies that promote green growth, competitiveness and productivity. In this way, in the context of COVID-19, it will contribute directly to the Peruvian Government’s Green Recovery strategy and economic reactivation.

Last update: May 2021