Those behind a programme for supporting biodiversity-related initiatives located in African countries are disappointed with the financial viability of applications received so far, one of its leads has said.
Most of the approximately 20 applicants to the Biodiversity Investments – Researcher & Accelerator (BIRA) have not been investable despite their potential environmental value, according to Michael Musgrave of the Conservation Leadership Faculty at the Africa Leadership University.
The programme has been “really disappointed in the quality of the applications … we have received lots and they are all quite bad,” Musgrave said during a panel at the AFSIC investment conference in London.
Musgrave’s university is hosting the accelerator, launched two weeks ago, with funding from entrepreneur firm Dalberg and FSD Africa, alongside contributions from biodiversity specialists CreditNature and Xilva.
LEARNING CURVE
However, overall, the applications themselves are “not a disappointment”, Musgrave said, underlining that the issue related more to the financials presented by the projects.
“It is a problem we need to address in the accelerator, so let’s address it. Let’s get them into an accelerator programme, let’s put them through the steps of learning,” he said.
Some of the applications do not yet speak the language of finance as they have been dependent on philanthropy, Musgrave told Carbon Pulse on the sidelines of the conference.
“Some of them are generating value, but we don’t attach value to it. We are so used to taking it for free.”
“We’ll say: ‘You guys are brilliant at conserving habitats and species. How do we take what you do, which does produce value, and translate it into a financial language that an investor will understand?’”
“There is a lack of clear understanding of this topic, which is a good problem because that basically means we know where we are starting from. It is a good place to start,” added Dorothy Maseke, head of the African Natural Capital Alliance’s secretariat.
The BIRA programme will take on up to four applicants to begin with, whom it will select by the end of 2023, after the deadline for applications closes on Oct. 20.
The initiative will work to develop ecosystem measurement frameworks suited to the African reality, including user-friendly investor metrics, as well as offer grants to organisations that provide assessments to understand corporate impacts, Dalberg said at the time of launch.
‘DEAD AGAINST’ CREDITS
Carbon credit prospects are the most likely way that applicants will be able to make their projects more investable, Musgrave said.
Applicants may also be able to generate returns from boosting biodiversity, as other metrics develop over the next couple of years, Musgrave said.
However, he is “dead against” the term ‘biodiversity credits’ as “every time you ask someone what it is, they can’t tell you”.
“They will say: It’s a basket of metrics. Why do you need to call it a credit? How do you trade a basket of metrics from a grassland with a basket of metrics from a tropical rainforest? We don’t need to take the language of the carbon markets into biodiversity – they are totally different things.”
“It is lazy thinking. It is taking the terminology from the carbon markets and applying it to biodiversity, but the minute you start scratching at it, it falls apart.”
Revenue for biodiversity could come from companies who inflict harm on nature, paying other organisations to support the environment, he added.
By Thomas Cox – t.cox@carbon-pulse.com
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