Endowment Model: MPA Financing in Southeast Asia. V th World Parks Congress Durban, South Africa, 8-17 September 2003
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1 Endowment Model: MPA Financing in Southeast Asia V th World Parks Congress Durban, South Africa, 8-17 September 2003
2 Overview Background Project scope Calculating the endowment Current gaps Key issues 1
3 Background In the process of developing its Regional Action Plan (RAP), the WCPA Southeast Asia Marine Working Group commissioned the Conservation and Community Investment Forum (CCIF) to develop an MPA network-specific business plan, including financial projections, potential revenue sources, detailed cost estimates, organizational design(s) required and action plans. The following presentation details the methodology used in developing an endowment model to calculate funding needs for a network of Southeast Asian MPAs. 2
4 Project Scope Protected Areas in the Coral Triangle Indonesia: Philippines: 3 1) Bali Barat 2) Bunaken 3) Cendrawasih 4) Karimunjawa 5) Komodo 6) Taka Bone Rate 7) Thousand Islands 8) Ujung Kulon 9) Wakatobi 10) Apo Reef 11) El Nido 12) Malampaya Sound 13) Tubbataha 14) Turtle Island
5 Calculating the Endowment Park Archetypes Size Complexity of Threat Remoteness Revenue Potential Flagships Large Highly complex Moderate to very remote High Central Parks Medium to large Moderately complex Close proximity to population Moderate to high Hidden Jewels Small Less complex Very remote Low to moderate Pocket Parks Very small Moderately complex Close proximity to population Moderate 4
6 Calculating the Endowment Levels of Service Level 1: Permanent stabilization of ecological resources Level 2: Restoration of ecological viability, establishment of sustainable livelihoods Park initiation Legal framework Stakeholder/ community development/ education Protection Park management Monitoring and restoration Tourism 5 Baseline assessments Draft management plan Legally recognized, clear mandates Basic management system Education and economic offsets to abate destructive activities Enforcement of existing laws Office support system Basic park infrastructure Regular ecological monitoring to confirm resource stability None Socio-economic assessment Sustainable resource use plan Legally recognized management system with clear mandate Legislation to enforce zoning laws Advanced collaborative mgmt system Intense stakeholder engagement and education Economic offsets (alternative livelihoods) Enforcement of new zoning regulations Higher staff skill level, capacity building Enhanced support system Monitoring to confirm resource viability and livelihood sustainability Active restoration and restocking As appropriate and profitable
7 Calculating the Endowment Financial Results $ NPV in Millions * Coral Triangle MPA Funding Need Sunk Costs MPA Revenues Govt Funding Funding Gap Existing Sources ** * 8% discount rate / 3% inflation. ** Including COREMAP, committed NGO funding, etc.???
8 Calculating the Endowment Endowment Timeline Total endowment Annual spend $ Millions * Future Value (undiscounted). Inflation assumed at 3%. 7
9 Calculating the Endowment Phasing of Endowment Cendrawasih, IND Flagships Komodo, IND Taka Bone Rate, IND Turtle Island, PHI Wakatobi, IND Bunaken, IND Central Parks El Nido, PHI Karimunjawa, IND Thousand Islands, IND Apo Reef, PHI Hidden Jewels Malampaya Sound, PHI Tubbataha, PHI Ujung Kulon, IND Pocket Parks Bali Barat, IND Level 1 intensity 8 Level 2 intensity
10 Calculating the Endowment Financial Breakdown by Park Archetype Flagships (1) $37.7 MM Level 1 Endowment per MPA Type (NPV) $ per Hectare * $11 $108.7 MM Level 2 Endowment per MPA Type (NPV) $ per Hectare * $32 Central Parks (2) $17.1 MM $59 $31.6 MM $109 Hidden Jewels (3) $12.0 MM $79 $23.2 MM $152 Pocket Parks (4) $1.7 MM $236 $3.2 MM $454 9 * Average endowment per hectare estimated using total marine park area, not coral reef area; Thousand Islands not included. (1) Includes Wakatobi, Cendrawasih, Take Bone Rate, Komodo and Turtle Island. (2) Includes Bunaken, Karimunjawa and El Nido. (3) Includes Ujung Kulon, Tubbataha, Malampaya Sound and Apo Reef. (4) Includes Bali Barat.
11 Current Gaps Limited coordination across BINGOs Independent (often conflicting) solicitation of same funding sources Heavily based on traditional funding sources Minimal long-term financial capital secured (significant financial insecurity at sites) Ongoing resource intensive fundraising required Lack of appropriate skill set A new organization is needed to fill these gaps 10
12 Current Gaps Potential Funding Sources for Shortfall Multinational Corporations (MNCs) Private Donors Program-Related Investments (PRIs) A new organization is needed to attract these funders International Financing Corporations (IFCs) 11
13 Key Issues Determining the meaningful ecoregions and sets of combinations (prioritization strategy) Developing the organization required to raise / invest / implement / broker endowments Understanding the feasibility of executing in existing BINGO / multi-lateral context 12
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