Exploring Conservation Finance Opportunities in Peru & Honduras

Written by: Jessica Alvarez, Communications & Content Manager

In 2022, the USDA Forest Service Office of International Programs and Blue Forest entered into a formal agreement to conduct feasibility assessments for conservation finance projects in both Peru and Honduras. The goal is to determine how conservation finance could support accelerating restoration work to improve watershed health, protect water quality, reduce the risk of fire, and protect natural resources and community health.

In Peru, our current project includes developing a preliminary feasibility study of how a Forest Resilience Bond could protect the ecosystem and communities proximate to Machu Picchu from the risk of wildfire. In Honduras, this first phase of work is focused on partner engagement to develop shared project visions by understanding priorities, opportunities, and barriers to implementing conservation and restoration initiatives at scale. Locally led projects could benefit from creative funding approaches that combine financial resources from many sources to achieve more ecologically resilient landscapes while protecting communities and public health.

The Forest Resilience Bond is an Environmental Impact Bond (EIB) aimed at forest and watershed resilience that extends traditional infrastructure finance to support ecological restoration and collaboration. The flexibility of the FRB model can be applied to different ecosystems and geographies and provides an opportunity to increase multi-partner collaboration, attract new funding sources, and accelerate the pace and scale of action.

Blue Forest works with local stakeholders and government agencies to support their conservation and landscape management goals. We’re excited to be collaborating with the US Forest Service International Programs as well as many local non-governmental organizations in the host countries. Recently, Blue Forest joined forces with the World Resources Institute (WRI) to advance our efforts in Honduras. WRI is a global research organization that works with governments, businesses, multilateral institutions and civil society groups to develop practical solutions that improve people’s lives and ensure nature can thrive.

Blue Forest worked in close collaboration with WRI to develop the Forest Resilience Bond years ago and has since continued to leverage WRI’s expertise when it comes to evaluating environmental economics, beneficiary engagement strategy, and external communications. WRI’s engagement is led through its Cities4Forests and Initiative 20×20 programs. Cities4Forests is a global alliance of more than 80 cities and subnational entities acting toconserve, restore and sustainably manage nature, especially the world’s forests, for human well-being. Initiative 20×20 is a program to bring 20 million hectares of degraded land in Latin America & the Caribbean into restoration.

Under the framework of the Latin America and the Caribbean Conservation Finance Feasibility Studies Five-Year Agreement, the three organizations—Blue Forest, USFS International Programs, and WRI—intend to establish a project development plan for leveraging conservation finance to accelerate the implementation of watershed restoration projects in selected geographies. This project development plan would specify enabling conditions required for conservation finance restoration projects, project type assessments, applicability of the Resilience Bond financial model and potential modifications, and opportunities that could accelerate or scale implementation.

Blue Forest is leveraging International Programs’ existing relationships to assess the priorities, opportunities, and barriers to utilizing conservation finance in these international landscapes. Stay tuned for more information as this work advances!