Today, environmental organization Rare in Indonesia, has unveiled a groundbreaking small-scale fisheries (SSF) Impact Bond, marking a historic milestone as the first bond exclusively targeting the small-scale fisheries sector.
Initially introduced at COP28, the SSF Bond focuses on financing community-led co-management of small-scale fisheries, a proven approach to addressing both the needs of local communities and environmental conservation.
The inaugural investment will support the pilot phase, establishing five community-based conservation management systems in Southeast Sulawesi, Indonesia, known as “Managed Access with Reserves (MA+R).”
In September 2023, Rare, with support from Levoca and funding from the Pershing Square Foundation, successfully completed the design and technical feasibility study for the SSF Impact Bond.
The United Kingdom’s Department for Environment, Food and Rural Affairs (DEFRA) became the first outcome funder through a contribution agreement with the Ocean Risk and Resilience Action Alliance (ORRAA).
Kate Schweigart, VP of Innovative Finance at Rare, emphasized that philanthropy alone is insufficient to finance ocean ecosystem conservation. The SSF Impact Bond, as the world’s first outcome-based financing (OBF) structure for small-scale fisheries, aims to attract both private capital and public donors by mitigating the risks associated with investing in community-led conservation.
The bond operates on the principle that investors are repaid by outcome funders only upon the achievement of pre-defined results, independently verified. This innovative financing model, previously successful in other sectors, offers a scalable solution to support countries in achieving their 30×30 goals for protecting 30 percent of land and sea by 2030.
The SSF Impact Bond is designed as a blended finance vehicle, set to mobilize up to US$160 million through three rounds, with the aim of safeguarding, restoring, and sustainably managing thousands of hectares of coastal ecosystems. The bond’s anticipated launch is scheduled for early 2024, and it is expected to play a crucial role in de-risking future investments in small-scale fisheries and the blue economy.
