Central American Markets for Biodiversity (CAMBio): Mainstreaming Biodiversity Conservation and Sustainable use within Micro, Small and Medium-sized Enterprise Development and Financing
Regional (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua)
GEF Grant US$ 10.225 million
Cofinance US$ 17.750 million
Project Cost US$ 27.975 million
Fact and figures
2The Central American countries which make up Mesoamerica occupy 769,000 km
which, although only 0.5% of global land area, support approximately 7% of the world’s
terrestrial species including 210 endemic mammals and 24,000 plants. The region has already taken steps towards conserving its remarkable biodiversity, including establishing approximately 600 protected areas and over 100 marine protected areas so that about 12% of Mesoamerica is now under some form of conservation protection. Regional co-operation has helped create innovative programmes such as the Mesoamerican Biological Corridor (MBC) which links together protected areas, biodiversity-friendly plantations, agro-forestry systems and private reserves throughout the region.
However, relatively high population growth rates and low income levels have placed increasing pressures on the region’s natural resources and associated biodiversity
creating a strong link between conservation and development.
Around 95% of regional enterprises, accounting for 54% of employment and 34% of production are small, micro or medium-sized enterprises (SMMEs). Many SMMEs are based in rural areas, depend heavily on natural resource inputs and are involved in activities which lead to land conversion, degradation, pollution and contribute significantly to the loss of biodiversity. SMMEs are active in cocoa and coffee farming, intensive cattle ranching, timber extraction, marine aquaculture and shrimp farming, high input horticulture and sugarcane production, slash and burn agriculture and tourism (80% or tourism worldwide is run by SMMEs).
Since it is neither realistic nor useful to try to prevent or reduce small business economic activity (except within certain highly sensitive or protected areas) SMMEs are identified by the project proponents as a key target group within which to change current productive and service sector practices and encourage more sustainable and biodiversity-friendly activities and production to the benefit of forest, mountain and coastal and marine ecosystems.
The five countries – Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua – on
2which the CAMBio project will work occupy some 420,000 km (55%) of the
Mesoamerican region and have a combined population of 33.2 million. Project activities are designed to ensure that SMMEs in Central America increasingly contribute to sustainable development and environmental protection by incorporating biodiversity concerns in their business practices. It will remove barriers in banking, business, policy and legislation to create an enabling environment which can catalyze biodiversity-friendly investments within sectors such as agriculture, forestry; ecotourism and marine activities, including aquaculture and possibly sustainable fisheries.
The project will build on emerging global markets for green eco-friendly products and the demand for certified products to transform SMME production practices, to the dual benefit of both sustainable development and conservation. The project’s design was
influenced by best practices and lessons learned from environmental funds, environmental financers, banking specialist and the GEF SME programme run by the World Bank Group’s International Finance Corporation (IFC).
It will work with a broad set of financial and business partners, including development banks, organizations involved with certification, business development, marketing and market research to provide targeted and incremental support to the region’s SMMEs.
The project will also work with the SMMEs themselves to ensure that investments are made efficiently and in a manner that creates economic and social benefits as well as to biodiversity and the environment.
Certification work, in partnership with organisations such as Rainforest Alliance, is an important part of the project which will support certification schemes for products such as coffee, bananas, citrus fruits, ferns, cut flowers, avocados, pineapples and sustainable forestry. Finally, the CAMBio project will reach out to other existing networks within and outside the project consortium, including the GEF Small Grants Programme, and other
GEF and donor projects in the region, particularly for help in identifying potential partners – such as producers’ associations – and to provide a stream of potentially bankable
Since public policies affecting biodiversity-friendly economic behavior by consumers and business play an important role in influencing markets, the project willwork with Ministries of Environment, Industry and Commerce, Finance and others to improve the policy framework and create incentive structures for SMMEs and, at the same time, reform policies which marginalize green markets. A key partner in the efforts to modify the enabling environment for green investments will be the Central American Commission on Environment (CCAD), which will provide strategic guidance. The three-fold project strategy is therefore: to catalyze change in banks’ and financial
institutions’ SMME lending practices by enhancing their understanding of biodiversity business opportunities; to improve SMME’s abilities to develop biodiversity-friendly
business opportunities; and to remove obstacles and create an enabling environment. The CAMBio project is innovative and takes a cutting edge approach to biodiversity conservation by working through SMMEs to develop markets and producers. The project brings together these three different, normally separate spheres in pursuit of a common goal of biodiversity conservation through private sector transformation. The project’s executing agency is the Central American Bank for Economic Integration (CABEI) and its financial network which will develop new financial products designed for biodiversity-friendly SMMEs. GEF funding will leverage substantial co-financing from CABEI of around US$17 million for biodiversity-friendly enterprises. The choice of CABEI as project partner and implementing agency is designed to take advantage of CABEI’s presence in all participating countries and its network of 150 financial institutions. The relationship with CABEI will also boost the project’s potential long term sustainability prospects by allowing capacity building to take place in financial institutions, who will then lend money to biodiversity businesses as part of their normal practice, rather than the project itself lending money. The project will however monitor all investments to see which businesses are having a substantial positive impact on biodiversity.
It is estimated that by the end of the project 200 small or medium producers and service-providers, and several thousand micro-producers benefited from the project and transformed their business practices. The project’s long-term impact will be measured by
the degree that banks and financial institutions have changed lending policies to invest in biodiversity-friendly business practices in SMMEs, as well as the biodiversity impact brought about by such investments.
CABEI - Central American Bank for Economic Integration (Executing agency); Comisión Centroamericana de Ambiente y Desarollo (CCAD), National Ministries of Environment, Finance and Productive Sectors: Sector Associations, Chambers of Industry and
Commerce: Technical Assistance Service Providers and Related International and National Biodiversity and Environmental Financing Facilities such as those belonging to the IFC Environmental Business Finance Program, EcoLogic Finance NGO program, EcoEnterprise Fund, and PROARCA/SIGMA Clean Production Program.