No tiger to die – UNDP, Asian nations to launch bonds for species protection « Carbon Pulse

The United Nations Development Programme (UNDP) is in discussions with four Asian countries over issuance of bonds that could generate as much as $200 million to help support tiger ecosystem protection, with successful activities then to be monetised by the sale of “high integrity biodiversity credits”, a member of the organisation working on the project confirmed to Carbon Pulse.

The UNDP is working with four countries – Cambodia, India, Malaysia, and Thailand –  to create an envelope of between $50-200 mln using a debt instrument, with part of the proceeds then channelled to protect and restore biodiversity in selected tiger ecosystems, Maxim Vergeichik, senior nature economist at the UNDP, outlined.

“Once national interest is clear and landscapes for investment are confirmed, we are going to develop business plans and conservation key performance indicators for each landscape. In our assessment, eligible activities might include support to green agriculture, agroforestry, tourism, and where relevant, restoration of critical habitats,” he told Carbon Pulse.

“The latter element could be monetised through high integrity biodiversity credits that will seek to align with emerging governance principles to be set by entities such as Biodiversity Credit Alliance,” he added, referring to the UN-backed cross-stakeholder group that some experts have suggested might act as an international standard-setting body for nature markets.

The BCA, having been established at COP15 in Montreal, is currently set up as an informal working group with a secretariat to be established by the end of June, as it aims to eventually outline best practices for biodiversity credits.


One of the main obstacles to crediting biodiversity impact is the highly localised nature of protecting habitats. While some see the way nature is beginning to emerge in markets as a moment of “revolution”, private funding for biodiversity is expected to evolve as a result in an altogether different way to the treatment of climate by the finance sector.

In the context of bond issuance, the vastly different economic situations of the four partner countries is also a crucial factor which the UNDP has considered in addition to geographical context.

“Each country context is specific with respect to fiscal parameters and debt burden, as well as issues on the ground such as diversity of threats to biodiversity and diversity of economic uses that need to be reconciled with biodiversity priorities,” Vergeichik said.

“Therefore, each country case is treated separately. Buy-in from national and local governments is the critical starting point and we are still in dialogue with national stakeholders consolidating interest and understanding preferences.”


Once the underlying portfolios, business case, and conservation KPIs have been fully agreed with the countries, the UNDP and the project will return to the issue of financial structuring, Vergeichik continued.

For this, a bond might be a sovereign issue in the partner countries with healthy starting debt and fiscal parameters, such as India.

Alternatively, the instrument may rely on third-party debt, which would then not need to enter the sovereign’s books and instead operate through a commercial bank which crowds in investors.

“While we are maintaining dialogue with some of the commercial banks, we are cautious of not putting the cart in front of the horse, so to speak, and are eager to complete our negotiations with national authorities and develop our landscape business planning first, before intensifying work on choice of structuring,” Vergeichik said.

“We are aware that the novelty of the approach requires de-risking and we are negotiating with several potential sources of concessional capital and guarantees, but can not disclose further details at this stage,” he added.

The UNDP’s overall ambition is to identify nature-related business plans within each landscape that would bring enough revenue to repay the debt, while also taking into account the de-risking of the capital.

Given the emerging experience from biodiversity funds around the world, as well as early trials with biodiversity credits, the UNDP said it believes such business cases can now be made, though cautioned that implementation at large scale would take time.

“We are eager to invest in preparation, among other things, making sure the business plans are those that naturally fit local community livelihood patterns in each landscape and are win-win for nature and people. Mandatory UNDP social and environmental safeguards will be applied at each stage,” Vergeichik explained.


Another of the greatest challenges facing the nascent biodiversity crediting market is with measurement, reporting, and verification (MRV).

Unlike for carbon, where a tonne is considered by the market as a tonne, for biodiversity markets there is not yet an equivalent metric. For example, a hectare of natural habitat in Germany is different from a hectare in Mexico.

Within continents such as Asia, and indeed within countries themselves, there is very wide diversity and that should be reflected in any attempts to quantify and credit impact. For this reason, each bond will have its own individual MRV system, Vergeichik outlined.

“Mandatory KPIs will include the status of tiger populations aiming at their non-deterioration or increase, or introduction as in the case of Cambodia if feasibility is proven,” he said.

“Consideration will be given to monitoring of other flora and fauna species depending on their criticality in each landscape context. Other KPIs may include composite indexes such as the Biodiversity Intactness Index,” he continued, adding that the project was discussing this with scientists at the UN Biodiversity Lab.

As for crediting these outcomes, the UNDP maintained that a baseline case could still be made despite such tricky MRV conditions.

Setting such a level would likely need to happen in areas he described as the “jewels” of certain countries.

“These are habitats, often formalised as protected areas, which require improved protection, or restoration, or expansion,” Vergeichik outlined.

As landscapes are analysed, they can be defined and threats determined. If the areas are intact, then hardly any intervention is needed beyond business as usual, he suggested.

But if these areas are “suffering from chronically weak management resulting in encroachment”, such as poaching or human against wildlife conflicts, then “this is where a baseline case can be made for the ‘avoided loss’ type of biodiversity credits”.

Alternatively, there may be areas which – if restored – could be added to protected areas and expand the habitat of species.

“This makes a case for the ‘restoration’ or uplift type of biodiversity credits.”

In a few months time, the UNDP project team will know more about where such opportunities are located.

In any circumstance, relating to credits, the sellers would only be those who have the rights for the land in question.


For all four countries, most of 2023 and “tentatively the first half of 2024” will be spent preparing and structuring the bonds and it is therefore difficult to assess the timeline for any credit issuance with accuracy, with the earliest possible date likely being in the second half of next year.

National and local governments would still overall need to provide approval, without which work on their territories will not happen, and local communities have been engaged in landscape analysis, business planning, and conservation KPI setting, the UNDP confirmed.

Local and international NGOs, where present, are also helping with conservation prioritisation and planning.

As for the financing element, several commercial banks and private fintech firms have been approached for early conceptualisation of structuring with local UNDP country offices acting as facilitators for developments in each of the four target countries. In additon, dialogue with the Asian Development Bank has also been ongoing regarding the project.


In spite of the complexity of the work still to be carried out on structuring debt instruments and overcoming quantification challenges, when questioned what a favourable outcome might look like for the project, Vergeichik’s response was a simple one:

“[Success] would be a steepening the curve of growth in global population of tigers.”

“At the moment the dynamics of the global population trend remain uncertain – while some countries achieved progress in tiger numbers in some areas, other countries have seen continued decline,” he told Carbon Pulse.

“We aim to make the future for tigers more certain with large-scale landscape-wide action. We also hope to demonstrate a model of co-existence of human economy with wildlife, creating basis for long term local development which does not undermine biodiversity.”

After a century of decline, overall wild tiger numbers are starting to tick upward, green group WWF has estimated.

While it is hard to be exact, tiger populations are stable or increasing in India, Nepal, Bhutan, Russia, and China, but in much of Southeast Asia, tigers are still in crisis and declining in numbers, according to the WWF website.

“Tigers face unrelenting pressures from poaching, retaliatory killings, and habitat loss. They are forced to compete for space with dense and often growing human populations,” it said.

There are just 4,500 tigers remaining in the wild.

By Roy Manuell –

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