Types of AFI solutions: safe infrastructure for birds and communities
Financing
The objective of this component is to provide the necessary financial resources for the implementation and development of nature-based solutions and projects that are friendly and safe for migratory birds.
Characteristics of our financial model
Long-term financial sustainability.
Low transaction costs to maximize the effectiveness of the funds requested.
It has incentives for meeting goals and efficiency in execution.
Characteristics of our financial model
Long-term financial sustainability.
Low transaction costs to maximize the effectiveness of the funds requested.
It has incentives for meeting goals and efficiency in execution.
Structure
Our financial model is organized along three main lines:
Promotion of sustainable investment
Enables multi-sectoral collaboration to mobilize funds efficiently and effectively.
Promoting biodiversity conservation projects
Identifies, supports and ensures the technical and economic viability of innovative projects that integrate environmental conservation and community development.
Guarantee of diversified financing
Promotes a catalog of impact investments to meet AFI’s financial needs. These include grants, concessional loans and donations.
Who can be subject to credit?
Projects of natural or legal persons, public or private, established in a CAF member country, such as:
- Central governments
- Local and municipal governments
- Public law institutions
- Private sector entities
Those individuals or legal entities that are on the List of Prohibited Counterparties or that do not comply with CAF’s know-your-customer policies will not be subject to credit.
Investors and donors of the Facility
Our mechanism promotes the incorporation of donations, grants and other financial instruments from philanthropy, international organizations and the private sector to complement and strengthen financial flows, particularly to enhance the strategic support and project preparation component.
Financial instruments
for capitalization
Main instrument
Issuance of a green biodiversity bond
- Immediate capital raising period.
- Fixed interest rate payment.
- Guaranteed return to the investor.
- Guarantee of full payment of the debt.
- Allow to retain a higher cash flow in the bank.
- Total or partial participation of impact investors.
Complementary instruments
Environmental impact fund
- Capital raising period between 12 to 24 months.
- Probability of limited capital raising.
- It requires the entry or hiring of a manager who performs the capital raising.
- Investment tickets generally do not exceed USD 50 million.
Donations and grants
- Regularly small donation tickets (compared to AFI capital needs).
- Limited capital flows.
- It does not guarantee the self-sustainability of the mechanism.
Stages of the mechanism
Condition Preparation Stage (2024-2025)
- Alignment of key stakeholders.
- Creation of credit lines for biodiversity.
- Research and preparation of biodiversity projects.
- Process and operation of the facilities.
Financing and Pilot Phase (2025-2030)
- Issuance of an impact bond, the proceeds of which will be used for a biodiversity credit.
- Financing of the first 10 projects.
Consolidation Stage (2030 onwards)
- An impact bond issue that will fund the projects identified during the 2025-2030 phase.
Stages of the mechanism
Condition Preparation Stage (2024-2025)
- Alignment of key stakeholders.
- Creation of credit lines for biodiversity.
- Research and preparation of biodiversity projects.
- Process and operation of the facilities.
Financing and Pilot Phase (2025-2030)
- Issuance of an impact bond, the proceeds of which will be used for a biodiversity credit.
- Financing of the first 10 projects.
Consolidation Stage (2030 onwards)
- An impact bond issue that will fund the projects identified during the 2025-2030 phase.