Sustainable Financing of Protected Area Systems—A Long Rode to Ho: Lessons from the Biodiversity Portfolio of the Global Environment Facility Mark Zimsky GEF Biodiversity Coordinator, Senior Biodiversity Specialist Protected Area Symposium at the ZSL November 9, 2012

Outline 1.Evolution of the GEF Strategy to Sustain Biodiversity through Protected Areas (PA) 2.Assessments of the Current Funding Needs for Managing and Expanding the Global PA Estate (Aichi Target 11) 3.Examples from the GEF Portfolio of Reducing the PA Funding Gap 4.Key Findings from the GEF Portfolio

Questions? Thank you for your attention GEF Support to Protected Areas:

Questions? Thank you for your attention GEF Support to Protected Areas: 2004 to present Improve the sustainability of protected area systems.

High Level Panel on Global Assessment of Resources for Implementing the Strategic Plan of Biodiversity Investment needs (US$ million) Recurrent Expenditure (US$ million) Average annual expenditure (US$ million) Range Aichi Target 11— terrestrial (17%) and coastal and marine (10%) protected areas 66, , ,7009,200-85,000$77-81 billion per annum (multiple sources)

Expert Team GEF-6 Needs Assessment: Aichi Target 11: Range $23 to $50 billion Reality check: GEF-5 amount for biodiversity focal area for : $1.2 billion

Reducing the Funding Gap: Examples from the GEF Portfolio Trust fund+ Protected areas as engines of local and national economic development Protected areas as profit centers

Peru: Trust Fund+ 77 protected areas covering about 19 million hectares that require $38.5 million/year to cover administration costs. National Trust Funds for Protected Areas (PROFONANPE) manages an endowment fund of $43 million which generates about $3 million/year (8% of annual needs) based on historical annual average returns of 7%. GEF engagement begins in 1995 with seed money for the trust fund (National Trust Fund Protected Areas, $ 5 million). Government allocates $13.8 million/year or about 36% of total needs. Current annual total gap is $ 21.7 million/year or about 56% of total needs. PA management contracts were introduced through a GEF project ($ 9 million, Strengthening Biodiversity Conservation through the National Protected Areas Program) to help fill the funding gap. In 2012, PA management contracts will bring in at least $23 million for management of eight protected areas.

Namibia: Protected Areas as Engines of Local and National Economic Development In 2004, at the start of the GEF project, “Strengthening the Protected Area Network” ($ 8.2 million) baseline investment of Government into the PA system was about US$ 4.6 million using today’s exchange rate. Analysis undertaken at start of project revealed an annual need of US$12 million or a gap of $7.4 million. Economic analysis discovered that protected areas contribute 3.1 –6.3 percent of the GDP through park-based tourism alone, without including other ecosystem services values; if the tourism potential is fully realized, the economic rate of return on the government investment over 20 years would be as much as 23 percent. Using these study results, the government increased the annual budget for park management and development by three fold. By the end of the project the annual investment by Government was US $15.5 million.

Namibia: Protected Areas as Engines of Local and National Economic Development The Ministry of Finance also agreed to reinvest 25 percent of park entrance revenue in park and wildlife management through a trust fund, providing up to $2 million in additional financing per year. In 2007, Cabinet approved the National Policy on Tourism and Wildlife Concessions on State Land to maximize the economic potential of protected areas. Since the policy has been implemented, more than 20 new tourism and hunting concessions were approved, generating over $1 million per year in fees payable to the government. An update of the 2004 economic analysis was done in 2009/2010 and estimated that the annual recurring expenditure was $US 18 million in addition to a one-time capital injection of $62 million. Analysis conducted during the project was critical to the mobilization of a US$ million Millennium Challenge Account tourism grant for Etosha National Park infrastructure and KfW’s funding of US$ 7.8 million for north-eastern parks infrastructure. This has contributed significantly to the $62 million needed for infrastructure development.

Jordan: Protected Areas as Profit Centers Royal Society for the Conservation of Nature (RSCN) has a national mandate to set up and manage protected areas on behalf of the Government and receives less than 10% of its annual operating budget from the Government. A GEF project funded in 1997 ($ 6.3 million, Conservation of the Dana and Azraq Protected Areas) sought to improve management of the Dana Nature Reserve and build capacity of the RSCN. Project successfully developed income generating projects with local villages and Bedouin communities that also provided revenues for PA management. Dana Nature Reserve experience served as basis for replication throughout the PA system. The end result has been the creation of a business division within the RSCN—Wild Jordan– in In 2010, Wild Jordan generated $800,000 net revenue to support conservation costs, mainly from nature-based business and tourism (eco-tourism, crafts, restaurants). This represented close to 50% of total protected area costs. Wild Jordan going to scale: a) more broad-based business strategy, i.e., investing in opportunities outside of protected areas that make good business sense; b) more outsourcing and partnerships with private sector; and c) business models developed for each protected area.

Key Portfolio Findings Most finance strategies are emphasizing the simple over the sophisticated (trust fund +, economic analysis, capture gate revenue, honey-pot redistribution). Data is king and economic analysis is fundamental. Start with a baseline assessment and audit, about 60 countries currently undertaking such an analysis with GEF support. Finance ministries act on numbers not moral suasion. Managing protected areas as assets and developing business plans requires specialists with different skills and institutions operating in a favorable enabling environment of laws and policies. Outsourcing is not a dirty word. Long-term institutional engagement and financial support—easily a decade--- is required to getting anywhere close to financial sustainability.

Prosaic Trumps the Innovative

Thank you for your attention.. Mark Zimsky, GEF Biodiversity Coordinator, Senior Biodiversity Specialist Mark Zimsky GEF Biodiversity Coordinator Senior Biodiversity Specialist