The concept of “pay for success” solutions is that private companies or NGOs take on the risk of implementing projects or programs that seek to achieve quantified public benefits (i.e. a reduction of a certain percentage of poaching) within a previously established agreement with government or donors to pay for the services, including some profit margin, once the activities have been successful. This allows government to decrease its own risk when piloting new approaches while allowing innovation and promoting efficiency and effectiveness of programs. For the private sector, or NGOs, the system allows private finance to flow into public projects that would otherwise have only been financed with grants. This approach is also called “pay for performance” or “impact bonds.” The original development of the pay for success model was called a social impact bond and was piloted for anti-recidivism programs in the UK. A good example in the nature space has been implemented by Quantified Ventures in their Wetlands Environmental Impact Bond (EIB) in Louisiana, USA. The EIB allows private capital to address erosion issues rapidly and private investors receive a return on their investment following successful implementation.
Sovereign Wealth Funds
State owned investment funds capitalized from balance of payments surpluses, foreign currency operations, royalties on extractive industries and other transfers and economic rent. Available resources are generally invested in capital and equity markets often through intermediaries to achieve returns. These returns are either re-invested or distributed to the Government or other recipient entities. Their investment policies can be oriented towards sustainable standards and practices-for example by investing a percentage of the capital in green bonds or impact investing. Similarly, the distribution of annual transfers may be earmarked to the environmental-particularly if the sovereign fund is capitalized from natural resource royalties.
State owned investment funds capitalized from royalties on oil and gas. Available resources are invested in capital and equity markets to achieve returns. These returns are either re-invested or distributed to the Government or other recipient entities. Their investment policies can be oriented towards sustainable standards and practices-for example by investing a percentage of the capital in green bonds or impact investing. Similarly, the distribution of annual transfers may be earmarked to the environment and climate change-particularly due to the fact of the negative impact of oil and gas on the environment and climate.
Sovereign Wealth Funds-Oil and Gas Funds
Conservation Impact Bond (Payment for Results)
A social and development impact bond where resources are linked to a conservation outcome.
Development Impact Bond (payment for results)
A social and development impact bond where resources are linked to a conservation outcome.
Wildlife Impact Bond (payment for results)
A social and development impact bond where resources are linked outcomes featuring the protection or conservation of wildlife.