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Speech by Commissioner Vella: Natural Capital Financing Facility Event

May 29, 2018 |

This text was originally published on European Commission

“Preserving, protecting and improving the state of nature are fundamental objectives for the European Union. Nature is the basis for healthy economic growth that is smart, sustainable and adapted to climate change.

Today, protecting nature is more vital than ever. Let me recall all the recent Davos Global Risks Reports. These all singled out biodiversity loss and ecosystem collapse as one of the main global economic risks. We must insure ourselves against this risk.

Through the EU Business and Biodiversity platform, we see that many businesses are ready and willing to play a central role. Companies are increasingly aware of their dependence on natural capital and recognise the value of natural capital as a driver for competitiveness. Ever greater numbers of companies understand the economic opportunities of natural capital investments, a well-trodden path to safeguarding the long-term continuity of their businesses.

For speeding up the transition to a resilient economy that is resource-efficient and protects natural resources, together with the European Investment Bank, we have set up the Natural Capital Financing Facility (NCFF) to support projects that invest in natural capital, with a budget of 120 million euros. Many forms of investment are eligible for support, from green infrastructure and payments for ecosystem services to ecotourism and ecosystem-based adaptation to climate change.

We are very happy to celebrate, today, the launch of the second and third operation.

Thanks to the NCFF loan, the Croat Regional Development Bank will be able to finance a significant number of smaller natural capital projects in the country which has an incredibly rich biodiversity. The loan will be accompanied by technical assistance to build up capacity for developing such projects. This will help demonstrating the concept, and we hope many other development banks and similar institutions to follow the example!

Forestry is a key policy issue in Ireland. There is a legacy of planting monocultures of sitka spruce and strong interests for a more sustainable approach which takes into account the angle of climate change mitigation, adaptation, agriculture and nature, which all need to be balanced carefully. The Irish Sustainable Forestry Fund aims at a strong contribution to all these interrelated objectives. The key is to rely on nature: continuous coverage forestry allows seedlings to grow by themselves, reducing the cost of replanting. Uneven age and diversified forest stands are more resilient to diseases and storms, and such increased resilience will be dearly needed in the face of climate change. I hope this NCFF operation will help convincing and spreading this business model as best practice. In order to maximise benefits for biodiversity, it will be very important that the Fund promotes also other important features for biodiversity, such as the higher use of endemic broadleave species.

This will also make a strong contribution to the EU Action Plan on Sustainable Finance, which highlights natural capital as one of the important areas for further investment in the EU.

The new NCFF operations mark the way ahead. Together with the EIB and the business sector, we have to bank on nature that means to increase the recognition that nature is a very valuable capital worth investing into…”

Read on at: European Commission.

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