The government of Bhutan has teamed up with the World Wildlife Fund to protect its natural spaces in perpetuity. A $40 million fund is released to the government as it meets targets, such as diverting all the parks’ revenue to their upkeep. After a 14-year transition, bolstered by the parks’ economic development, the government should be able to maintain them single-handed.
Results & Impact
A fund of $40 million will help the government of Bhutan to protect almost 5 million acres of forests, rivers and wildlife – more than a third of the country. The backers would like to expand the "Bhutan for Life" model to multiple countries around the world in a future deal called "Earth for Life”
The government of Bhutan, World Wildlife Fund, Reykjavik Geothermal
In the "project finance for permanence" deal, partners' money is held back until when a target amount has been reached. The money is released to the government as it reaches pre-agreed milestones, such as diverting all the parks' revenue to their upkeep. These funds decrease over 14 years, at which point the government should be able to meet the costs through green taxes and revenue from eco-tourism
Cost & Value
Running since 2016
One hurdle was to educate funding partners about the importance of Bhutan, a small country with a population of only 800,000 people. Its forests currently sequester four times as much carbon as the country emits
"Bhutan for Life” was modelled after a 2014 deal to protect the Brazilian rainforest called Amazon Regional Areas Programme (ARPA). “Forever Costa Rica” and the “Great Bear Rainforest Project” in British Colombia are both earlier versions of ARPA. The organisers of "Bhutan for Life" hope to have created a globally adaptable model
A plan to make Bhutan’s national parks self sufficient in 15 years would see the small Asian country use an innovative Wall Street technique originally patented to protect the Amazon.
Dwarfed by its neighbours, China and India, Bhutan is home to the snow leopard and the white-bellied heron, one of the rarest birds in the world. With rainforests, alpine meadows and snow-covered mountains, it has a nascent tourism industry, and wants to protect its parks in perpetuity as part of a deal that would oblige the government to enact specific environmental policies.
“We want to integrate our work with the people living in the parks,” said geothermal energy investor Michael Philipp, who has been the lead on the project for the WWF, one of the partners. “We also want to be able to promote sustainable development in the country. We want the parks to be used as a part of the local economy. The other key thing is that 70% of GDP comes from selling hydropower to India. So to have the rivers flowing, we feel you have to protect the parks and waterways.”
The structure of “Bhutan for Life” is what is known as a project finance for permanence deal. A fund of around $40 million, has been raised by having a single closing, where partners’ money is transferred into the fund only when the target total has been reached. This has brought together the public sector, individual donors, development agencies, banks, and foundations.
The money is released to the government as it reaches pre-agreed milestones, such as diverting all the parks’ revenue to their upkeep. These funds decrease over 14 years, at which point the government should be able to meet the costs through green taxes and revenue from eco-tourism
“Bhutan for Life” was modelled after a 2014 deal to protect the Brazilian rainforest called Amazon Regional Areas Programme (ARPA). That took 16 years to come to fruition and partnered the World Wildlife Fund with the Brazilian government and a number of other donors. ARPA is also the basis for a similar project in Peru, which is looking to reach $100 million before conservation work begins. “Forever Costa Rica” and the “Great Bear Rainforest Project” in British Colombia are both earlier versions of ARPA.
Ultimately, the aim is to turn project finance for permanence into a global programme called “Earth for Life”, which would adapt “Bhutan for Life” lessons to multiple countries around the world. “I would like to see us expand into countries such as Peru, Namibia, Colombia, Vietnam and Myanmar,” said Philpps.
(Picture: Flickr/ Arian Zwegers)