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Why ‘blended finance’ could help transitions to sustainable landscapes: Lessons from the Unlocking Forest Finance project

Rode, Julian, Pinzon, Alexandra, Stabile, Marcelo C.C., Pirker, Johannes, Bauch, Simone, Iribarrem, Alvaro, Sammon, Paul, Llerena, Carlos A., Muniz Alves, Lincoln, Orihuela, Carlos E., Wittmer, Heidi
Ecosystem services 2019 v.37 pp. 100917
biodiversity, case studies, climate, deforestation, ecosystem services, environmental impact, forests, funding, landscapes, models, sustainable land management, Brazil, Peru
There is a momentum towards finding financing solutions for halting deforestation at the landscape level for the benefit of climate, biodiversity and delivery of ecosystem services. The Unlocking Forest Finance (UFF) project has, between 2013 and 2018, worked on the development of innovative financing mechanisms for sustainable landscapes in three sub-national Amazon regions of Brazil (Acre and Mato Grosso) and Peru (San Martín). This paper describes the approach of the UFF project as a case study of sustainable landscape financing, and portrays the key evolutions during the process. Relying on a reflection and consultation process among project partners, the paper then derives a set of lessons for sustainable landscape finance. It illustrates the current mismatch between the demand side of private ‘impact’ investors (i.e., those who look for social and environmental impact of investments beyond financial return) and the supply side of sustainable land use investments on the ground. The paper discusses how ‘blended finance’ models that combine funding from commercial, public, and philanthropic sources could contribute to financing sustainable landscapes.