Seeking Protected Area Financial Sustainability

A protected area (PA) financial strategy should aim to covering all costs of the implementation of the PA management plan in order to achieve the conservation objectives.

Step 1. Know the starting conditions in the PA, e.g. conservation objectives, financial gaps and business opportunities. This information can be found in the PA Management Plan and its financial plan.

PA management plans describe activities, needs and goals protected and conserved area managers are working to achieve. Financial plans provide an overview of a site’s current financial state projections of future income, long term financial goals and needs and steps to achieve the conservation objectives established in the PA management plan.

Step 2. Determine financial gaps. Identify the financial requirements for implementing the management plan or a strategic component, e.g. fire management (how much does fire management costs? Including personnel, equipment, infrastructure and supplies). Consider basic or optimum scenarios to achieve conservations goals. Map all available resources from public and private funding and, finally, calculate the gap by determining the difference between available and necessary resources for each scenario.

Addressing the financial gap requires securing investments from public and private sources.

Sept 1. Come up with a revenue generating idea, which can involve sale of a tangible product (e.g. coffee); a deal involving an intangible product (e.g. sale of carbon credits); or provision of a service (e.g. accommodation facilities).  In all cases, opportunities can exist within the boundaries of the protected area or in the surrounding area. 

Step 2. Elaborate the idea into a business model by identifying assets in the protected area that can be used to provide revenue for conservation, e.g. exceptional beauty, biodiversity, offsetting potential, etc.

Step 3. Conduct a feasibility study to prioritize ideas and determine whether to develop a project or not. A feasibility study explores multiple aspects of a business idea to determine if it is practical, viable and suitable for a specific context.

Step 4. Make the business case for the prioritized idea(s). A business case is intended to provide justification for pursuing a given business model.  Ultimately, the business case will be used to inform investors and convince them to invest in a given proposal. It is also useful to inform partners and other actors and stakeholders involved in the development of a conservation finance project.

Once a business model is available, it is time to develop a project and find a financier.

Step 1. Design a project to pursue the business idea. It should include a clear structure and sound contractual frameworks (e.g. actors involved in implementing the project and their roles; financial flows; decision-making processes; and legal entities relevant for the project).

Step 2. Identify potential financiers, which may be environmental trust funds or impact investments. A trust fund is a vehicle for collecting, investing, allocating and managing assets, filled through donations, public funds or others (e.g. taxes). Impact investments are those made with the intention to generate positive, measurable social and environmental impact alongside a financial return. They are usually made by development finance institutions, private foundations, pension funds, individual investors and others.

Step 3. Develop a marketing strategy for the project.

Step 4. Develop a project business plan (PBP). A PBP is a written description of the future of a project (usually 3-5 years).  It describes the resources and capacities that exist now and those that will have been secured in the future. A PBP gives an investor confidence that the project team knows where they are going and how they will get there.