Can finance help Africa keep its wildlife?
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Can finance help Africa keep its wildlife?

The rhino impact bond has sparked excitement that financial tools can play a role in helping Africa conserve its wildlife. As the continent’s population level is set to rise quickly, Euromoney looks at the work being done to connect conservation with economic growth.


Ol Pejeta Conservancy is a four-hour drive north of Nairobi, much of it along well-tarred roads passing through lush green hills before reaching the savannah.

Here, tourists in their 4x4s juggle binoculars and cameras as they seek out glimpses of the rare ‘big five’ – lions, elephants, leopards, buffalos and rhinos – so-named by the big-game hunters that once sought them out.

Rhinos have been the biggest prize of all to those that have hunted and continue to hunt them. Their horns are more valuable than gold at $60,000 a kilo, sold to buyers or into China and Vietnam for their supposed medicinal properties.

Thanks to fossil records, we know that the planet was once teeming with rhinos of many different subspecies – some standing up to five metres tall, some with woolly coats that are thought to have evolved with the Ice Age, some with more than one horn or no horn at all. Yet this 55 million-year history is now perilously close to ending. Fewer than 30,000 rhinos remain.

Workers at former cattle ranch, Ol Pejeta, are working hard to reverse this story. When it became a conservancy in 2006, the rhino population there was just eight. Adding 20 more rhinos from conservancies and national parks elsewhere in Kenya and through breeding, that number is now 131 and includes both black and white rhinos. Coupled with the conservancy’s work with the 52,000 people in the 19 neighbouring communities, this success has made Ol Pejeta a good fit for the world’s first financial tool targeting species extinction – the rhino impact bond.

Publicly announced in July and launching next year, the five-year $50 million rhino bond is a pay-for-results deal that aims to boost the global population of the black rhino.

The decrease in the population of the shy black rhino has outpaced its more confident relative, the white rhino. Numbers have steadily dwindled from 65,000 in 1970 to just 5,500 today as farming land has expanded, habitat has been lost and higher prices for rhino horn have encouraged poachers.

Like many impact investments, initial funding was needed for the project to get off the ground. In this case, the initiative was taken by United for Wildlife – a partnership between seven of the world’s leading wildlife charities and the Royal Foundation of the Duke and Duchess of Cambridge. The implementation of the Rhino Impact Investment Project is led by the Zoological Society of London, and the two organizations, together with the Global Environment Facility and the UK government, provided initial funding.

Rhino bond

Investors in the rhino impact bond, which will likely include impact investors, high net-worth individuals and family offices, are in effect backing five protected areas in Africa (of which Ol Pejeta is one) to increase the number of black rhinos. If they are right, their capital will be returned with a coupon.

“It’s a model adapted from other areas such as recidivism, health or education, that we wanted to roll out with biodiversity and critically endangered species,” says Helena Newell at Conservation Capital, the finance manager for the rhino impact bond.

As with other outcomes-based bonds, there is an outcome payer – in this case it is hoped that large conservation NGOs, philanthropists and multilaterals will provide the payment if the outcomes are met.

The core outcome is the number of black rhinos added over the five years (a long enough time frame to support the rhinos’ 14- to 15-month gestation period). There are also other additional outcomes being measured, including community engagement and job creation.As part of a larger ecosystem, the protection of any single species also benefits others. The lowly oxpecker bird, for example, has a symbiotic relationship with the rhino, hitchhiking on its back and feeding on ticks.

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Samuel Mutisya, Ol Pejeta

The rhino impact bond differs from similarly structured social impact bonds, however, in that costs don’t diminish the more successful the project is. Recidivism bonds, for example, have cost savings at the heart of the model: intervention methods cost less than supporting and imprisoning a re-offender, so local governments have a financial incentive to pay for the bonds.

Instead, Newell says the incentive for conservation NGOs and multilaterals is that the project has rigorous measurements around impact, risk and costs.

“Within conservation there are rarely strong metrics that show whether funded projects have been successful in terms of cost efficiency in addition to having a conservation impact. The rhino impact bond is focused on making conservation more cost efficient and producing clear conservation outcomes for money invested.”

Richard Vigne, chief executive of Ol Pejeta Conservancy, echoes this point.

“The bond means more accountability, proof of return, efficiency and credibility – things we have never really seen in the world of conservation,” he says. “As the definition of conservation becomes much broader, we see that donor funding is not enough. The way we fund these projects has to change, and the bond is a signal that it is changing.”

Of the $50 million, Ol Pejeta will receive up to $1 million a year, doubling its annual donor funding. In 2018, donor funding to the conservancy was $1.13 million, the year before it was $950,000.

“Donor funding has grown year on year, but the money from the rhino bond means we can push our efforts even further,” says Samuel Mutisya, head of conservation at Ol Pejeta.

“This is not some vanity project. We don’t want to breed more black rhinos for our own pleasure. Rhinos may not be the most important animal on the planet, but they are a critical link. Lose them and our ecosystem becomes weaker. Lose more [links] and the system will collapse. We can’t set a precedent that it is OK for animals to go extinct.”

In addition to the other revenue streams of cattle farming and tourism that make up the bulk of the conservancy’s operating budget, the money from the rhino impact bond will give it the ability to expand its anti-poaching capabilities.

Donor funding has grown year on year, but the money from the rhino bond means we can push our efforts even further - Samuel Mutisya, Ol Pejeta

Since 2004, 16 rhinos have been killed by poachers in Ol Pejeta, each now with its own tombstone etched with their name and age in the conservancy’s rhino graveyard as a stark reminder of the risks that come with protecting endangered species.

The conservancy has dedicated anti-poaching teams tasked with protecting it 24 hours a day, seven days a week. An anti-poaching dog unit has four dogs. Rangers patrol the area inhabited by the rhinos in groups of three, equipped with night-vision goggles and government-issue guns.

The proceeds of the bond will also help secure 20,000 acres of land annexed to the north of Ol Pejeta for the rhino population.

“For rhinos to grow populations naturally, they need more space then they currently have in Ol Pejeta,” says Mutisya.

Finally, and crucial to the success of the project, the bond provides funding for the neighbouring communities, which the conservancy supports in a number of ways, through healthcare, education, managing human-wildlife conflict, job creation, sanitation and IT.

For example, Ol Pejeta supports 22 primary and 14 secondary schools. This year, it awarded 80 students with scholarships to support them through four years of secondary school.

“Community development and support is not just about throwing sweets over the fence,” says Vigne. “It’s about embedding yourself in the community and developing a relationship with them.”

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Eva Kimani, Ol Pejeta

The conservancy maintains a 120-kilometre solar-electric fence that cordons off the conservancy from the community. It limits human-wildlife interaction.

While viewing the big five from the safety of a vehicle may be a bucket-list item for tourists, having large and dangerous species near children, crops and livestock does not excite local communities. It is one of the biggest challenges for conservation as both human and wildlife populations increase.

To help local populations better relate to conservation efforts, schools and communities are allowed to visit Ol Pejeta for free, while conservancy educators tour the region to speak about the importance of preserving wildlife.

“Before this, the only exposure the community would have to wild animals is through the destruction they caused to crops and cattle,” says Eva Kimani, Ol Pejeta’s education coordinator. “Through conservation education, the community sees the

other side. It changes their perception of the animals here.” During droughts and dry seasons, Ol Pejeta also takes care of the breeding herds of the community when cattle owners are unable to support them. The conservancy has 15,000 acres for cattle rearing; with 6,000 cattle of its own providing additional revenue.

Community leaders are also invited to offer their own ideas for projects.

“We assess projects and rotate them, so that each community will benefit in turn,” says Kimani. “That way, we try and keep things fair.”

Partly because of these community projects, the population of these communities is growing. The ecosystem of Ol Pejeta has expanded beyond wildlife and livestock to include 52,000 human beings. While that adds more immediate strain to the conservation mission, it also means that 52,000 people have an incentive for the conservancy to succeed.

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The black rhino population has plummeted


It is hoped that the rhino impact bond will inspire other species-related bonds and highlight means to unlock the value that lies within conservancies and parks when they are seen as investments. It’s an opportunity to protect Africa’s wildlife on a big enough scale that works for governments and communities.

According to the World Database on Protected Areas, about 17.7% of sub-Saharan Africa is protected in conservation areas, national parks and private protected areas.

That is higher than the 11.3% of protected land in north America and 11.7% in Europe and central Asia, but in some African countries there is potential to introduce even more.

More than half the world’s population growth before 2050 is expected to occur in Africa; and there is a sense of urgency around creating economies linked to conservation in order to reduce population pressure on humans, wildlife and natural resources.

Kaddu Sebunya is the chief executive of the African Wildlife Foundation (AWF).

Established in 1961, AWF works to protect and conserve wildlife and wild lands. To do so sustainably, it engages with local communities living with wildlife, decision-makers and the constituents to whom policymakers must answer – particularly the growing population of young people across the continent.

“The decisions Africa is making around plans for economic development are the major threats to conservation: agricultural and rural development planning, energy and urbanization,” says Sebunya. “If conservation does not have a direct link to the aspirations of Africans or the development of its economies then it will not be sustainable.”

It is a realization echoed by other NGOs across Africa: for conservation to work in Africa, it has to be tied to economic growth. When it comes to tourism jobs, Werner Myburgh, chief executive at Peace Parks Foundation, says that the business case is clear.

“UN world tourism data suggests that there will be 134 million tourists visiting Africa annually by 2030. If you look at the growth in wealth in Asia and where those individuals want to travel to, 37% have stated Africa as a preferred destination over the next three years, and 32% of those [have] the ability to spend more than $800 a day. We are very bullish around business growth.”

If conservation does not have a direct link to the aspirations of Africans or the development of its economies, then it will not be sustainable - Kaddu Sebunya, African Wildlife Foundation

Tourism is big business. Some 15% of Rwanda’s GDP for example comes from tourism related to its famous mountain gorillas. In 2018, revenue from gorilla trekking in Volcanoes National Park grew by 25% to $19.2 million.

But, adds Myburgh, the challenge lies in raising the up-front capital and operating expenditure required to support infrastructure growth and business development. That is where blended finance models will play a vital role.

He says that outcomes-based models like the rhino impact bond are going to become more popular. Peace Parks is looking at whether or not the model could be adapted to have the private sector pay the capex and opex of the creation of a park or tourist eco-area up front.

That would reduce the reliance on development agencies, which can take several years to make decisions and release funds.

“If the private sector comes in with the risk money, they could receive 1% or 2% on their investment after 12 to 15 years,” says Myburgh. “It serves donors who are disillusioned with constantly giving with no end in sight; it could attract impact investors; and it could unlock more flexible funding sources.”

He offers as an example a project launched last year with the government of Mozambique to support the development of Maputo Special Reserve and its adjacent marine park. An estimated $41 million is needed to develop infrastructure (including six-star hotels, campsites, trails and ferries) and to pay for the translocation of wildlife to the area.

Peace Parks is putting in $16 million over the 10 years it will take the project to break even, with the balance being secured from park income and donor funding.

The investment will also have a much broader impact, connecting Maputo with Tembe Elephant Park and Ndumo Game Reserve in South Africa, as well as bolstering the bordering parks of Swaziland.

The Peace Parks Foundation was set up in 1997 by Prince Bernhard of the Netherlands, Nelson Mandela and South-African conservationist Anton Rupert specifically to establish these trans-frontier conservation areas in southern Africa. Peace Parks now span one million square kilometres – equivalent to the combined landmass of France and Spain.

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Kaddu Sebunya at Volcanoes National Park


There is evidence that Myburgh’s suggestion of outcomes-based models outside development agencies is already underway. An example is Karingani Game Reserve in Mozambique, a private park created from nearly 150,000 hectares of land bordering Kruger National Park in South Africa and Limpopo National Park in Mozambique.

It is a special landscape, containing three different climates, but one ravaged by the civil war in Mozambique between 1977 and 1992. The border lands were a hot-spot for rebel bush camps; the few isolated communities that remained left and animals were heavily poached for food, as well as to finance the rebel camps and war effort.

Now the land has been secured with dual land rights for 99 years from the Mozambique government to create a reserve with tourist lodges and to build an economy to support communities, with the goal of becoming entirely self-sufficient.

Since its inception, Karingani has engaged with and relocated communities that remained during the civil war, and started the process of safeguarding and restoring the landscape to its original state. The endangered African wild dog has been reintroduced and lions, leopards and elephants roam the land.

The restoration and development of Karingani is being funded by several impact investors led by hedge fund manager Paul Tudor Jones and South African company Twin City Development, who worked for eight years to secure the land rights.

Last year Tudor Jones founded non-profit African Community & Conservation Foundation (ACCF), which is behind a campaign to safeguard tracts of land and wildlife that stretch from Zambia to South Africa.

Karingani, Twin City and Tudor Jones teamed up with Matt Harris, founding partner at Global Infrastructure Partners and founder of the Bedari Foundation, to provide capital to restore the land and support long term ecotourism and community development.

Harris says that the reserve is designed to be an economic boost to the region.

“You cannot treat the communities like employees and this is not about providing handouts,” he says. “The surrounding communities are treated as partners. There are many ways to do that in addition to providing jobs and infrastructure and schools, such as using agriculture development and bringing in microfinance. In September this year one such agriculture project – which is a for-profit partnership with a local community – yielded its first annual crop of 100 tonnes of beans.”

The development of Karingani into a reserve with eco-hotels will also bring water, renewable power, roads and jobs to the community. The plan will provide investment in regenerative agriculture on adjacent lands to the site, run and co-owned by the community.

The entire reserve will run sustainably in 10 to 15 years and, Harris says, in this way, his participation is like any other business investment. Indeed, Harris bought an equity stake in the project based on return estimates.

James Cairns, who was working for the Tudor Jones family office alongside the Milton Group, carried out the financial assessment to show that the return of ecotourism-driven revenues would be able to provide positive returns on capital to investors after 18 years.

Cairns has since founded Mopane Capital, which uses a natural capital approach to value conservation assets and ecosystem services to enhance the equity and capital raising position. He says the future sustainability of reserves relies upon communities recognizing the true worth of land in conservation and sharing in the benefits of that.

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Karingani Reserve will run sustainably in 10 to 15 years

Holistic approach

It’s a new era for both philanthropy and conservation.

Paul Milton, founder of the Milton Group, advises wealthy families on how to invest in landscape change for social and environmental outcomes. He says ‘outcomes’ is the key word.

The Milton Group spent several years developing key performance indicators for Karingani and other projects to help drive data-led valuations and to satisfy philanthropists’ desire to move away from blind donations.

“Developing measurable KPIs is not easy, and we would be the first to admit we are learning and adjusting every day,” says Milton.

The KPIs are based on a number of guidelines from sustainability industry leaders One Planet and SERA.

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Werner Myburgh, Peace Parks

What is exciting about pure private-sector projects such as Karingani, says Milton, is their holistic approach.

“NGOs might focus on conservation first, but we are looking at tourism, land management, conservation, small business creation, agriculture, the built form – altogether,” he says. “Also, those involved are entrepreneurs by nature and so there is more acceptance of failing and resetting than you might see in projects that have government organizations and donor agencies at their root.”

Milton makes the point that conservation has to be inclusive and that it suffers in Africa from overtones of colonialism.

“Human-wildlife conflict is a huge risk as populations rise,” he says. “Hundreds of thousands of people live on the borders of parks and reserves not just in Africa; these projects need to balance their focus on communities and conservation.”

It is a vital point: that Africans must be the ones to benefit from the tourism economy.

“Several years ago, ecotourism for communities basically meant dancing for tourists or washing hotel laundry,” says Sebunya at AWF. “Now increasing numbers of communities have equity in tourism businesses or full ownership. This helps incentivize conservation tremendously.”

In 2007, AWF helped fund an eco-lodge in Rwanda, for example, on about 20 acres of land that had been used for growing potatoes.

“In the first 10 years it averaged an annual $300,000 in profits that went straight back to the community. Compare that to the $1,000 a year it made for potatoes,” says Sebunya.

With the profits the community has paved roads, piped water into homes, developed agricultural programmes and built homes for the elderly.

It has also been a win for conservation. Since the lodge was built, not one mountain gorilla in the nearby park has been poached. The success has led to similar lodges in Kenya, Uganda, Namibia, Ethiopia and Botswana.

But Sebunya adds that conservation isn’t simply reserved for large parks.

The only way to prevent more loss and conserve what we have is with the global private sector’s investments - Werner Myburgh, Peace Parks Foundation

AWF has created an impact investment fund to finance small African companies that has invested $7 million in nine projects so far, including a cattle trading programme at Ol Pejeta. In Zambia it has financed a community agriculture food-processing plant. In Kenya it has helped finance a business that reduces deforestation and improves the water supply to Nairobi.

“There are so many businesses that can be established that are profitable and sustainable,” says Sebunya. “It is a misnomer that we must choose between conservation and development. That is a false choice. Economic growth is vital for Africa, but we cannot do it at the expense of our ecosystems. What is the point of creating a good life if the air and water are polluted and the food is full of pesticides?”

He points out that as Africa develops it would be helpful if governments mainstreamed conservation issues across the activities of all their ministries – especially finance, agriculture, education and economic development. This is an idea being floated on other continents.

“There’s a real opportunity for Africa here,” says Sebunya. “We are at the beginning of our journey and can learn from the mistakes of not marrying conservation with economic growth from elsewhere in the world. But politicians are elected on employment, security and growth. We need to show that conservation is deeply related to all of these.”

Myburgh adds that the support of the international community is needed.

“Every day in Africa forests are cut down on par with what is happening in the Amazon as timber is drained out for growth elsewhere,” he says. “The damage to conservation here is of international consequence and we cannot turn a blind eye to the biodiversity loss. The only way to prevent more loss and conserve what we have is with the global private sector’s investments.”


AI to save wildlife

In Tanzania, a drone emerges from a bush, startling an elephant poised to roam into a farmer’s crops.

The sound, similar to a swarm of bees, causes the elephant to change course and a small but possibly devastating moment of human-wildlife conflict is avoided.

Technology has a key role to play in conservation in Africa, and now it’s being taken to another level using artificial intelligence (AI).

Eric Dinerstein is director of WildTech and the Biodiversity and Wildlife Solutions Program at the conservation non-governmental organization Resolve and was formerly chief scientist at the World Wide Fund for Nature. He has been working with firms such as Intel, Inmarsat and Microsoft to develop low-cost technology that could prevent poaching and human-wildlife conflict – like the drones his team is using in Tanzania.

Africa’s parks rely on rangers to protect them against poachers, but there are never enough. The Serengeti, for example, which is the size of the state of Maryland, has only 150 rangers to protect it.

“Our challenge was to create a cost-effective burglar alarm system for national parks and help rangers know exactly when and where to take action,” says Dinerstein.

The solution is TrailGuard AI – a system of cameras, communications units and satellite modems placed at key points in a reserve to relay information to rangers’ headquarters within two minutes of detection.

Intel’s AI comes into play with battery life and connectivity.

“The problem with camera traps is that they send images whenever the sensor is triggered. It means battery life is typically only two months long,” says Dinerstein. “With TrailGuard AI only images with humans detected in them are sent. The whole system wakes up only in that moment and then goes back to sleep, so a battery can last 1.5 years.”

Based on the images, rangers can then determine what and how large a response is needed. Also, for the 90% of parks in Africa that do not have connectivity, TrailGuard uses long-wave radio links to transmit images over a state-of-the-art satellite system created by Inmarsat.

The system has already been tested in the Grumeti Reserve where it enabled the arrest of poachers from 20 different gangs.

“Already 300 camera systems are being manufactured here in the US and then we will make the next 1,000 in China,” says Dinerstein. “Now all we need are investors to help us reach the goal of having TrailGuard AI on the major poaching trails in 100 parks in Africa by the end of 2020. This could be the game-changer for low-cost technology to protect endangered wildlife.”


A financial taskforce against trafficking


HRH the Duke of Cambridge (c) and Lord (William) Hague (centre left). Banks including BAML, Citi, Credit Suisse, DBS, Deutsche Bank, Investec, RBS, Santander, Vietcombank, Western Union as well as HSBC and Standard Chartered signed the declaration spearheaded by The Royal Foundation

In August, government agencies from around the world gathered in Geneva for almost two weeks at the meeting of the Convention on International Trade in Endangered Species of Wild Fauna and Flora.

Cites is an international treaty to ensure that the international trade in specimens of wild animals and plants does not threaten their survival.

Among the species on the list were giraffe, white rhino, elephant, all frankincense trees, pancake tortoise, parachute spider, seahorses and three species of sea cucumbers known as teatfish.

Roughly 5,800 species of animals and 30,000 species of plants are protected by Cites against over-exploitation through international trade, but there are always those willing to take a chance on breaking international trade laws.

According to the United Nations Environment Programme, the trade in illegal wildlife is valued at between $7 billion and $23 billion a year, making it the fourth most profitable criminal trafficking enterprise after narcotics, arms and people.

Africa is the source for up to 70% of that value.

At this point, one of the unexpected yet most important allies enters the fight against illegal wildlife trafficking – the banking sector.

In 2018 the Duke of Cambridge convened the United for Wildlife Financial Taskforce, which brings together financial services, NGOs and other experts to identify specific actions that the financial sector can take to contribute to the fight against the illegal wildlife trade.

Thirty-seven financial institutions have signed a declaration as part of UWFT that lays out six commitments, including the undertaking to raise awareness and share intelligence.

The taskforce is chaired by William Hague, former UK foreign secretary, and supported by a secretariat based at the Royal Foundation.

“The private sector, including financial institutions, have a key role to play in combatting illegal wildlife trade,” says Naomi Doak, head of conservation programmes at the Royal Foundation. “The future of our natural world and all the species that live on the planet will only be secured if people, companies, governments all work together to prevent poaching and use the tools they have to help protect these species.

“[Governments and companies] have the ability to help protect these iconic species in much the same way as a ranger – they just use different tools. Rangers out in the field risk their lives every day protecting species against poaching. Making sure that we work hand in hand with financial and transportation companies allows us to build an additional layer of protection, which in some cases may help reduce poaching on the ground, helping to protect rangers.”

Standard Chartered was an early signatory.

“The illegal wildlife trade doesn’t happen in isolation,” says Patricia Sullivan, global co-head of financial crime compliance. “It tends to happen within criminal organizations that are also operating in other illicit activities such as narcotics trafficking, money laundering and arms dealing, which are existing areas of focus for investigation and training for banks."


Some 99.9% of StanChart’s staff have completed training on illegal wildlife trade red flags. Sullivan says the bank also trains client financial institutions and public-sector stakeholders to spot illegal wildlife trade red flags in transactions and movements of money.

“There are certain illegal wildlife trade transit hubs that tend to be used, for example, and we have developed specific transit hub typologies and training to help us recognize illegal activity,” says Sullivan. “As part of the taskforce, we all also agree to share relevant information with law enforcement and intelligence agencies to help them tackle illegal wildlife trade.”

HSBC has also been training its workforce. By the end of 2018, 2,300 employees had been trained in how to spot illegal wildlife trafficking.

Since dollars tend to be the most-used currency in the trade, many wildlife trafficking crimes end up with the US Department of Justice, the Drug Enforcement Agency and the US Fisheries and Wildlife Service.

Already the UWFT has helped bring one group of criminals to light.

In June, several members of an African criminal gang were indicted for participating in a conspiracy to traffic in rhinoceros horns and elephant ivory valued at more than $7 million. The gang was accused of poaching more than 35 rhinos and more than 100 elephants, as well as trafficking large amounts of heroin. The illegal booty was bound for New York City and concealed in African masks and statues.

Due to the Bank Secrecy Act, which protects banks from being connected to working with government agencies under the Safe Harbor Agreement, the Department of Justice and the agencies involved are unable to comment on how the information from banks was used, or even if banks were involved in catching the criminals.

Off the record, one source stressed the importance of financial institutions in helping solve illegal wildlife trafficking crimes and stressed that the Safe Harbor Agreement should encourage other banks to work alongside the authorities.

The source also raised concerns about the use of anonymous payment systems.

“If the financing for wildlife trafficking stops going through the banking system, it’s going to be harder to prevent.”

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