Using finance to save black rhinos in South Africa

Using finance to save black rhinos in South Africa

We could call it the first wildlife conservation bond: the World Bank issued the first Wildlife Conservation Bond (WCB). Objective: to stop the dramatic decline in the population of black rhinos, which went from 70,000 in 1970 to about 2,600 today. In ancient times, the institute says, there may have been as many as 850,000. Two reserves are the object of the interventions, both in South Africa: the Addo Elephant National Park (Aenp) and the Great Fish River Nature Reserve (Gfrnr).

The operation of the "Rhino-bonds" is particular: the issue, 150 million dollars and a five-year duration, will generate returns for buyers only upon maturity. And, above all, only if the population of the species The maximum will be achieved with a growth of 4%. No coupons for the buyers: the issuer, rather, will make periodic payments in support of the rhino conservation activities undertaken in the two parks.

The rate of population growth will be calculated independently by Conservation Alpha, a specialized auditing company, and subsequently certified by the Zoological Society of London. Only in the event of a positive outcome will investors receive a success payment on maturity, in addition, of course, to the repayment of the capital of the 'bond.

Green bonds increase "In recent years green bonds, impact bonds, social bonds have increased - explains Andrea Baranes, vice-president to resident of Banca Etica -. With these products, the interest perceived by those who invest is linked to the achievement of certain objectives ". Which, continues the manager," are sometimes frankly ridiculous, when not really greenwashing. Of course this is a general consideration, I do not I refer to this case in particular ".

"By purchasing this type of socially oriented bonds - continues Baranes - the risk one assumes is not only the financial one, but also the bet whether or not the objectives to which they are linked will be achieved". , however, charitable: the capital is repaid, unless defaulted. "But the World Bank is the best guarantor globally. To be a bit critical, one might think that it is strange that the protection of rhinos should come from private capital and not from governments; but it can also be an alternative way of diversifying the portfolio, linking it to environmental objectives ", says the manager.

But what will the money be for? The pandemic has drastically reduced revenues for natural parks: revenues which were intended for conservation activities, and which now, in the South African case, will be compensated by Rhino-bonds. With a cascading effect. "Black rhinos are a so-called 'umbrella species', whose active conservation is indirectly reflected on that of many other components of the ecosystem - explains to Marco Antonelli, naturalist of WWF Italy -. These species normally live in rather large habitats: for this reason, the practices implemented to protect them can have, as a positive externality, important repercussions on the conservation of the flora and fauna that insist on the same territory ".

The particular list includes animals such as the wolf, but also fish such as the shark and whales. "The concept is related to that of a species-flag - continues Antonelli - a species, that is, well known and iconic, whose protection allows for the collection of resources that will then be used to protect others that are less known, but equally important from the point of view of biodiversity ". A few examples? "The polar bear, which has become a symbol of climate change; the panda, symbol of WWF; and then the jaguar, the leopard, the shark itself ”, which recently was the focus of a popular initiative proposal addressed to the European Parliament, says Antonelli.

Why the black rhino population is falling There are five globally known rhino species: most of them are white and live in South Africa. “The main cause of the dramatic decline in the population of black rhinos is poaching - concludes Antonelli -. The specimens are killed to sell their horn: it is a product whose trade is illegal in many countries, but coveted on the black market, as is the case for elephant tusks. "If the scheme is successful, leaks from a previous draft signed by the World Bank, it could also be extended to the Kenyan rhino populations and to other species such as lions, tigers, gorillas.

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