The LDN Fund

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AN IMPACT INVESTMENT FUND FOR LAND DEGRADATION NEUTRALITY

To achieve the target of a land degradation neutral world (SDG target 15.3) by 2030, large amounts of financial resources must be mobilized. Public resources alone will not suffice, as acknowledged in the Addis Ababa Action Agenda.

New financial instruments and intermediaries, as well as enabling conditions, are needed to catalyze private capital around SDG implementation. For this reason, Decision 3/COP.12 requested the Global Mechanism to develop options for increasing resources for the full realization of LDN initiatives, including through the “creation of an independent LDN fund”.

Rehabilitating degraded land
Protecting vital ecosystems
Empowering sustainable business

 

What is the LDN Fund?

The Impact Investment Fund for Land Degradation Neutrality (LDN Fund) is a collaborative initiative, bringing together several institutions committed to addressing the global issue of land degradation.

The Global Mechanism is spearheading the establishment of the LDN Fund in collaboration with Mirova, the responsible investment subsidiary of Natixis Asset Management, and with contributions from the Governments of France, Luxembourg, Norway, and the Rockefeller Foundation.

Public financial institutions, such as Caisse des Dépôts et Consignations (CDC) and the European Investment Bank (EIB) are participating in the development of the LDN Fund via an Advisory Group that also includes senior representatives from international NGOs and academia.

Expected to be launched in 2017, the LDN Fund is a first-of-its-kind investment vehicle leveraging public money to raise private capital for sustainable land management and land restoration projects worldwide.

The LDN Fund is being structured as a layered fund, designed as a public-private partnership for blended finance. It will complement and scale up existing financial instruments and funds for sustainable land management and rehabilitation by providing financing that would not otherwise be available in the market.

What will the LDN Fund do?

The LDN Fund will invest in bankable projects on land rehabilitation and sustainable land management worldwide, including sustainable agriculture, sustainable livestock management, agroforestry, sustainable forestry, renewable energy, infrastructure development, and eco-tourism. Eligible projects are those that generate:

  • Environmental benefits
  • Socio-economic benefits
  • Financial returns

In addition to restoring degraded lands, this means for example  generating revenues from sustainable use of natural resources, creating green job opportunities for local communities, increasing food and water security and sequestering  CO2. The LDN Fund will provide evidence of its achieved impacts through a rigorous monitoring and evaluation framework.

The LDN Fund will be independent from the UN and will be managed by a private sector investment management firm. Its investments will follow strict sustainability standards and responsible investment criteria.

Restoring vital ecosystems

The LDN Fund aims at taking a landscape approach to its operations.

A landscape approach considers and manages trade-offs among competing land uses, individual interests and sectoral policies.

Addressing land degradation at a landscape level can help develop a more coordinated approach to natural resource management on a larger scale, by bringing together multiple stakeholders, from smallholders, communities and civil society to SMEs, large corporations and regulators.

The protection of vital ecosystem services goes hand in hand with safeguarding against potential large-scale land acquisitions that run counter to environmental standards and the interests of local communities.

Empowering sustainable business

The Fund is designed to substantially scale up land restoration and sustainable business models on restored land.

Many small scale projects are demonstrating that sustainable landscape management is not only key to achieving land degradation neutrality, it is also more profitable than the unsustainable alternative.

The main reason for creating this fund is that the scale of such efforts is still small compared to the areas of land already degraded. The LDN Fund recognizes this, providing financing for sustainable businesses whose operations produce not just economic but also environmental and social returns.

The LDN Fund will offer financing for the rehabilitation of degraded land and for sustainable business models on upgraded land. In addition to direct investments into larger scale projects, the Fund is expected to operate via financial intermediaries and like-minded investment funds through co-investments.

 

 

The LDN Fund White Paper (JUNE 2016)

Unlocking the market for Land Degradation Neutrality - The LDN Fund Market Study (JUNE 2016)