NCFF - Natural Capital Financing Facility

NCFF provided a €9 million loan to fund the ecological restoration of the Alzette river and its tributary, the Pétrusse, in the heart of Luxembourg. The project seeks to restore both rivers to their original natural courses and conditions, increasing biodiversity and offering natural solutions for reducing flood risk.

Thanks to this project, heavily urbanised sections of river will resume a more natural course. Their banks will also be restored to create natural habitats for flora and fauna. The restoration will let the water flow more naturally and slowly, reducing the risk of flooding. The measure constitutes a nature-based adaptation to climate change risk that will improve flood protection in and downstream of Luxembourg’s capital.

NCFF provided in 2021 a €4.5 million loan to the Belgium Société Publique de gestion de l’eau (SPGE). The loan will be used for the application of nature-based solutions for water treatment, increased retention of storm water and the protection of natural habitats. The loan will in particular improve wastewater treatment with the objective to reach river water quality suitable for the reestablishment of the Pearl Mussels, (Margaritifera margaritifera). The Pearl Mussle was once common in Europe, but more than 95% of the total number have disappeared over the past hundred years. In Belgium, there are only a few remaining populations, found in very clean watercourses in the Rulles, Sûre, Vierre and Our basin. The NCFF loan will support the reestablishment of the mussle. The project is part of the investment programme 2019-2021 of Société Publique de Gestion de l'Eau, a public-sector entity in charge of wastewater collection and treatment in the Walloon Region (Belgium).

This is the first NCFF operation that supports a Biodiversity Offseting scheme. The operation consists of a €5 million loan to the French CDC Biodiversité, a subsidiary of the Caisse des Dépots, for the rehabilitation and management of conservation sites around France. The rehabilitation and management of conservation sites will allow CDC Biodiversité to generate offset credits (Unités de Compensation) for clients who are required to offset their impacts on certain habitats and species as a condition of a planning permission. This EIB loan will enable CDC Biodiversité to support investment in new sites, while keeping its existing sites, some of which have high ecological value, and make the necessary investments to register and market the credits of those sites to comply with regulatory requirements in France.

This is the first NCFF operation integrating nature-based solutions in a city. A €5 million NCFF loan will finance and support the integration of green components into the restoration of public squares and streets, create green corridors between different greened areas and contribute to the natural restoration of Athens second landmark hill after the Acropolis, Lycabettus hill. The objective of this operation is to support the implementation of the Athens Resilience 2030 Strategy and thus contribute to reducing urban heat islands, increase natural water infiltration and improve overall attractiveness of the project areas. This loan is attached to a €55 million framework loan for resilient urban renewal and development to the Municipality of Athens.

The first project supported by the NCFF, signed in April 2017, was a €6 million loan to Rewilding Europe Capital. It will provide support for over 30 nature-focused businesses across Europe. The comeback of iconic and threatened European wildlife species such as the European bison, brown bear, black vultures as well as pelicans and white-tailed eagles of the Danube and Oder Delta, to name a few, could also benefit from the investments.

White pelicans, Pelecanus onocrotalus, Danube delta rewilding area, Romania
Copyright: Staffan Widstrand / Rewilding Europe

The SLM Silva Fund is a specialised fund focusing on sustainable forestry in Ireland. The strategy of the fund is to acquire semi-mature plantations and to transition these forests to ‘Continuous Cover Forestry’ or ‘Close to Nature’ management, an alternative to the widely used single-species clear fell-replant system. Continuous Cover Forestry maintains permanent forest cover and promotes a mixed forest structure. It is a commercially viable management model which promotes biodiversity, soil health and landscape value. The fund has now reached its first close and is initiating its investment period.

This operation consists of on-lending €15 million to the Croatian Bank for Reconstruction and Development (HBOR) through a multi-beneficiary investment loan. HBOR, with its special local expertise and understanding of the Croatian market, will provide smaller loans to projects investing into the area of conservation, restoration and nature-based adaptation, such as eco-tourism, sustainable agriculture and forestry or green infrastructure for cities. The operation is particularly important in Croatia given its rich biodiversity and significant contribution to the Natura 2000 network.