Innovative Finance Short Case Studies Innovative Finance

Conservation Capital offers the following services within ourInnovative Finance advisory division:

Core Service: • New Financing Mechanisms

Supporting Services: • Corporate Finance for Conservation Projects • Corporate Finance for Conservation Businesses • Natural Capital Valuation

KEY TO SYMBOLS

Tourism Residential Housing

Agriculture Bio-products

Livestock Public Sector Engagement

Fisheries Private Sector Engagement

Forestry Local Community Engagement

Sport Hunting Developing Conservation Businesses

1 Umiliki Investments (pan-African) In partnership with African Wildlife Foundation, designed, capitalised - via the issuance of two ‘conservation bonds’ - and now manage Umiliki Investments as the first ever example of a fully commercial, collective investment fund for conservation enterprise in Africa, currently with US$ 7.4 million AUM across 9 investments, 3 sectors and 5 countries.

2 Rewilding Europe Capital (pan-European) In partnership with Rewilding Europe, designed, capitalised - with seed investors including the European Investment Bank, Dutch Postcode Lottery and a family foundation - and now manage Rewilding Europe Capital. The first example of a commercial conservation enterprise investment fund for rewilding enterprise in Europe, it currently operates with €6.5 million AUM and has completed 21 investments across 6 countries and 5 sectors.

3 Okavango Capital Partners (pan-African) Building on Umiliki Investments, Conservation Capital has co-founded a new investment group that aims to launch its first African fund targeting US$ 75 million AUM by Q1 2019. OCP will combine a commercial private equity driven approach with an active natural capital and ecosystems service focus, managed by a team that has collectively invested US$ 1 billion over 60 combined years of African operating experience.

4 Rhino Impact Investment (pan-African) Appointed by United for Wildlife - a group of international conservation NGOs - together with investment banks and law firms, on behalf of the UK’s Royal Foundation of the Duke and Duchess of Cambridge and Duke of Sussex - to design, launch and manage a US$ 50 million outcomes- based financing model. It is the first ever investment instrument for species conservation targeting a financial return. Developing Conservation Businesses

5 Financing Biodiversity Offsets(Global) In partnership with the Wildlife Conservation Society and Conservation International, we researched and completed a White Paper highlighting mechanisms for stimulating and structuring the financing of biodiversity offsets through institutional investors, private corporations and public funds.

6 Uganda Biodiversity Fund (Uganda) Following a business planning exercise, conducted with support from KfW Development Bank and the East African Development Bank, we designed the core governance, management and investment management structures for a proposed new Uganda Biodiversity Fund targeting a US$ 20 million initial revolving fund raise. The fund will focus on conservation projects and associated enterprises in Uganda.

7 Europe Wildlife Bank (Netherlands) Working with Rewilding Europe, played an integral role in designing the European Wildlife Bank – a ‘bank’ capitalised with mammal species targeted for reintroduction by Rewilding Europe. With a current ‘asset’ base of more than 750 animals, we arranged a €50,000 collateralized loan via Rewilding Europe Capital to purchase one of Europe’s last remaining herds of Maremmana cattle for the bank, securing a critical biological asset central to its mission.

8 Incentives For Old Growth Forest (pan-European) Partnered with Wild Europe to identify opportunities and associated instruments for ensuring that public and private landowners and users of old growth forests in Europe have sufficient financial incentives for engaging in their effective conservation. Corporate Finance for Conservation Projects

1 Ol Pejeta Conservancy (Kenya) Designed and secured equity funding for the founder US$ 21 million hybrid corporate and capital structure for the now world-famous, IUCN recognised Ol Pejeta Conservancy - the largest funding transaction in Kenya’s private sector conservation history at the time.

2 Loisaba (Kenya) Designed and secured debt and equity funding for the founder US$ 1.2 million hybrid corporate and capital structure for Loisaba - a pioneer commercial, integrated wildlife – livestock conservancy model, paving the way for the development of multiple such conservancies across Laikipia’s Ewaso ecosystem and beyond.

3 Borana Conservancy (Kenya) Designed and secured equity funding for the founder US$ 14 million hybrid corporate and capital structure for Borana - Kenya’s newest rhino sanctuary integrating wildlife with a diversified tourism, livestock, agriculture and residential commercial model.

4 Faia Brava Reserve (Portugal) Leveraging the local presence of an NGO partner, Associação Transumância e Natureza, we arranged €150,000 of debt finance to fund the development of 4 innovative tourism ventures – including importing the Starbed concept first developed at Loisaba in Kenya. Their combined cross-market product offering has significantly boosted local conservation related economies and international recognition of Faia Brava as a tourism destination. Corporate Finance for Conservation Business

1 Rungwe Avocado Company (Tanzania) Arranged US$ 1.1 million of senior convertible debt finance via Umiliki Investments for this innovative agricultural development company - a clear example of how investment in sustainable agriculture can drive both improved livelihoods and increased conservation incentives in high value natural landscapes. The debt has been converted to equity.

2 Sabinyo Silverback Lodge (Rwanda) Structured US$ 1.2 million of blended development capital via Umiliki Investments for the first wholly community owned lodge in Rwanda, and now both a leading tourism destination and key player in the mountain gorilla conservation movement, including a US$ 250,000 debt financing package – probably the first example of commercial debt ever being taken out by a local community in a conservation business development context.

3 Khoadi-Hôas Conservancy (Namibia) Arranged US$ 245,000 of senior debt finance via Umiliki Investments to fund the development of Grootberg Lodge, as the first ever example of a foreign debt investment into a community conservancy to be approved by the Bank of Namibia.

4 Linking Livestock Markets To Conservation (Kenya) Arranged US$ 220,000 of senior debt finance via Umiliki Investments to fund the development of a pioneering trading partnership between one of Kenya’s largest commercial livestock operations and a growing base of pastoralist communities across the semi-arid savannah landscapes of northern Kenya. This leveraged US$ 7 million of follow-on investment by The Nature Conservancy. Corporate Finance for Conservation Business

5 Asilia Camps & Lodges (Tanzania, Kenya) Arranged US$ 2 million of senior debt finance via Umiliki Investments to fund the expansion of this conservation tourism group’s footprint into both traditional and frontier contexts. The funding structure includes an innovative performance-based rebate mechanism based on Asilia’s engagement in high value frontier conservation areas with negligible existing tourism economies.

6 COMACO (Zambia) Arranged US$ 400,000 of senior debt finance via Umiliki Investments to fund the expansion of this pioneering agricultural concern linking rural communities in one of Africa’s most important natural landscapes (the Luangwa Valley) with urban consumers through an entire value chain (production – processing – retail) of environmentally smart field-to-fork products.

7 Bale Mountains Lodge (Ethiopia) Arranged US$ 935,000 of senior debt finance via Umiliki Investments to fund the development of this eco-lodge in Bale Mountains National Park - the first ever conservation tourism facility to be developed within an Ethiopian national park, setting an important precedent for others to follow.

8 Limalimo Lodge (Ethiopia) Arranged US$ 872,000 of senior debt finance via Umiliki Investments to fund the development of this eco-lodge in Simien Mountains National Park – the second ever conservation tourism facility in an Ethiopian national park. Funding structure included an innovative royalty mechanism designed to generate funding for local education support initiatives. Corporate Finance for Conservation Business

9 The Forest (Kenya) Arranged US$ 1.4 million of senior debt finance via Umiliki Investments to fund the development of this adventure centre and eco-lodge as the first ever tourism development concession undertaken by the Kenya Forest Service. Specifically targeting Kenya’s rapidly emerging middle class, it welcomed 39,000 guests in its first full year of operation.

10 SnowChange Cooperative (Finland) In the first European deal of its kind, through Rewilding Europe Capital we structured a €275,000 loan to purchase and restore over 3,000 hectares of degraded peatlands providing considerable carbon sinks to support climate change mitigation. A pioneering carbon offset mechanism leveraging CORSIA aviation offset regulations constitutes the primary repayment model.

11 Lagosta Wilderness Reserve (Croatia) Arranged €80,000 of debt financing via Rewilding Europe Capital to purchase a controlling equity stake on behalf of Rewilding Europe in a 16,000-hectare hunting concession within Velebit Nature Park. Over 80% of the reserve is now a designated ‘no-take’ zone, where wildlife is being re-introduced and quotas amended to protect species including wolf and bear.

12 Guslice Melnice Honey (Croatia) Issued a two-part €30,000 loan via Rewilding Europe Capital to fund capacity expansion for this innovative organic honey business – servicing both the food and cosmetic sectors. Their honey is now branded and distributed across Europe as a leading government selected regional products distributor, generates conservation levies from sales, and physically promotes Rewilding Europe as a local conservation partner. Corporate Finance for Conservation Business

13 Faia Brava Star Camp (Portugal) Following an eco-camp design and management tendering process, we catalysed the formation of a consolidated joint venture between two local businesses and a local conservation NGO, Associação Transumância e Natureza, providing a €50,000 loan via Rewilding Europe Capital to build an exclusive 8-bed tented camp in Portugal’s only privately owned and managed nature reserve.

14 Peatland Payment For Ecosystem Services (Finland) Structured a €75,000 loan via Rewilding Europe Capital to purchase, secure and restore the Linnunsuo wetland. The resulting improved water quality throughout the 9,000-hectare Jukajoki catchment area is driving the recovery of local fish populations – in turn enabling the local fishing communities to generate funds to repay the loan.

15 Sociedad e Agro-Florestal do Rio Maçãs (Portugal) Through Rewilding Europe Capital we designed and structured a €600,000 loan to lease 3,900 hectares of high conservation value communal forests buffering Montesinho Natural Park as a pilot for transforming mono-culture forestry stands into natural forests. Offering replication potential across a further 400,000 hectares, the loan repayment mechanism deploys a blended income model from sustainable timber, non-timber forest products, tourism and offsetting.

16 Save the Elephants (Kenya) Conducted a valuation of Elephant Watch Camp in Samburu National Reserve as part of a wider feasibility exercise to assess the potential strategic benefits of Save the Elephants, a not for profit elephant conservation charity, acquiring the camp. This would provide Save the Elephants with a sustainable revenue generating asset and one that would facilitate its ability to recruit and host donors. Natural Capital Valuation

1 Karingani Game Reserve (Mozambique) Completed a natural capital valuation to support equity divestment to new international investors. This secured a price uplift of 2.5 times the original invested capital. The work was conducted to international valuation standards and passed an investment grade diligence review with PwC.

2 Catiland (Panama) Conducted a scoping appraisal to provide a natural capital valuation of a rare wilderness land portfolio on the Pacific coast of Panama. The valuation will be used to inform current shareholders on where to maximise value in preparation for a planned sale, and guide and defend the proposed equity sale price to the new development investors. For more information please contact Giles Davies on [email protected] or visit us at www.conservation-capital.com