GEF Eco-Enterprises Fund (The Nature Conservancy) (MSP)

completed

In January 2000, TNC established EcoEnterprises Fund, a program designed to apply venture capital-type tools and principles to help reduce threats to biodiversity. The fund offers an integrated package of risk capital and technical assistance to support community-based, commercially-viable economic activities that encourage the sustainable use of natural resources. TNC established and incorporated a for-profit investment company, Fondo EcoEmpresas, S.A., in Panama, as the fund''s risk capital arm, to provide debt and equity financing to socially- and environmentally-responsible companies in Latin America and the Caribbean. TNC serves as the fund manager for Fondo EcoEmpresas and is also the majority shareholder in the investment company. In addition to helping defray costs of operating the investment company, EcoEnterprises Fund''s technical assistance component provides critical support in business and environmental advisory services, such as financial control and accounting, marketing, business planning, and biodiversity monitoring.All Fondo EcoEmpresas portfolio companies are required to work with local conservation or community organizations in order to ensure their activities help meet the needs of in-country social and environmental stakeholders. Involvement by the local non-profit organization in the business may include equity interests; profit sharing; user licensing fees or royalties; flat rate resource concession fees; resource management fees, or some other form of financial involvement. NGOs may also provide an on-going environmental and social monitoring role. By offering technical assistance to both the portfolio companies and their non-profit partners, EcoEnterprises Fund helps develop capacity for: integrating business and biodiversity objectives, building business acumen, and helping companies maximize their impact on biodiversity preservation.GEF funding of US$1 million will be dedicated to maximizing the long-term biodiversity benefits of EcoEnterprises Fund’s project portfolio, and helping to cover the higher annual operating costs that this will entail. The higher operating costs will arise due to the need to provide extra business- and biodiversity-related technical assistance, and the need to provide extra fund management support to develop, manage and exit viable investments.