The World Association for Waterborne Transport Infrastructure (PIANC) has released its latest report, Green Financing of Nature-Based Navigation Infrastructure, prepared by Working Group no. 230 convened by the Environmental Commission (EnviCom). This comprehensive report aims to provide guidance on financing mechanisms for Nature-Based Solutions (NbS) in the navigation infrastructure sector, which have become increasingly vital in combating climate change and promoting biodiversity.
NbS offer an impactful approach in promoting sustainable development and generating long-term environmental and socio-economic benefits. The report presents key strategies for financing enablers and capitalizing on emerging opportunities in the green finance sector.
Key Findings:
- Nature-Based Solutions for Navigation: NbS are designed to leverage natural ecosystems to create resilient infrastructure, yielding multiple environmental and socio-economic benefits. Examples include beneficial use of dredged material, coastal vegetation restoration and hybrid green-grey solutions integrating NbS into traditional waterborne infrastructure.
- Financing Challenges: Despite growing interest in sustainable infrastructure, barriers stand in the way for financing (widespread) application of NbS. Those barriers concern notably lack of transparent business cases and standardized metrics, performance uncertainty and unfamiliarity with NbS in financial markets. This report explores pathways to bridge the gap between waterborne NbS and private capital.
- Bankability of NbS: For NbS projects to attract financing, they basically must demonstrate cash flow potential. Bankability could be promoted by making NbS an integral part of larger, commercially viable waterborne infrastructure projects, reducing risk and enabling the developer to overcome barriers. Furthermore, innovative funding models such as blended finance could support bankability. Beyond these mechanisms, the report outlines a set of financing enablers for NbS on three levels: system, market and projects.
- Blended Finance and Value Capture: The report discusses how blended finance models, combining public and private funds, can reduce investment risk and promote NbS projects. Value-capturing instruments, such as carbon markets and eco-tourism, are proposed to generate revenues and thus improving the business case for NbS
- Data Gaps and Research Needs: NbS projects and their financing take time, needing planning and coordination. Publicly available and comparable data on benefits, performance and financial returns are scarce. Additional research is warranted into standards to define and measure the environmental and socio-economic performance of these projects, on the basis of which data could be gathered. Case studies with useful metrics could support in building an understanding for financiers.
Call to Action
The PIANC Working Group no. 230 encourages port and waterway authorities, developers and financial institutions to embrace NbS in their infrastructure projects and share knowledge, especially on how NbS business models can meet financing and risk criteria. Targeted action, utilising a mix of effective enablers on the system, market and project levels, is essential to accelerate the transition toward sustainable and resilient waterborne transport systems. With international momentum behind climate action and sustainable development, this report aims to provide a contribution to integrating the worlds of waterborne NbS and private capital.
