Project: World's First Small-Scale Fisheries Impact Bond
State of development: Current
Stage of development: Final negotiations
Type of instrument — Impact Bond: Yes; Outcomes Fund: No; Social Impact Incentives (SIINC): No; Social Impact Guarantee: No; Payment-by-results (no pre-financing): No; Technical Assistance and Market-building program: No; Other: 
Rationale for using outcome-based finance: "Rareâs SSF Impact Bond is the first OBF instrument focused exclusively on SSF.  As a result, SSF coastal wetland ecosystems and communities have been largely overlooked as solutions to (1) boost a coastal geographyâs climate change resilience and mitigation (SDG 13), (2) promote inclusive and sustainable economic growth (SDG 8), and (3) secure the ocean protection goals of the 30x30 initiative.

The potential pathways to scale are manifold, given that Rareâs MA+R approach is already deployed in more than half a dozen countries across the Global South, and it can be replicated and scaled to virtually any coastal SSF area globally.  Importantly, it is also a sustainable way to finance 30x30 targets as the international community works collectively tor reach these goals in the next six years.

The almost completed feasibility study also includes a financial model and other aspects demonstrating the SSF Impact Bondâs financial sustainability and cost effectiveness."
Key challenges to launch: "The project's key pain points are specific to the characteristics of its focus on the bond's Cohort 2. Assuming a successful Cohort 1, the main challenge of Cohort 2 will be securing the primary outcome funders as Governments - thereby converting the bond from a development impact bond (DIB) to a social impact bond (SIB).  The new SIB structure will require updates and changes, including regarding (i) business case (e.g. updating of outcomes and financial model), (ii) structuring (e.g. creation of a special purpose vehicle), (iii) relationship management (e.g. as a result of public procurement requirements), (iv) service design (e.g. regarding intervention model and legal / regulatory requirements), and (v) delivery mobilization (e.g. regarding data, reporting and performance management). 

Securing Accelerator support will therefore address the already known challenges to securing seed funding, thematic expertise and funding coordination for a successful design and launch of the Cohort 2 SIB."
Social/developmental challenge: "Lack of protection is causing ocean biodiversity to plummet, creating an existential crisis. The global 30x30 initiative is crucial to addressing these issues by protecting 30% of the ocean by 2030. In coastal communities, the active management of SSF and associated coastal wetland ecosystems can combat climate changes while supporting the local economy. SSF provide significant benefits to coastal communities including climate resilience and mitigation, economic growth, and food security.  However, SSF are chronically underfunded, under-resourced, and suffer from the sector's informality, which prevents its ability to absorb capital. 

This program addresses ocean protection and sector formality by:
1. Increasing KM2 of ocean protection by establishing MA+R
2. Stabilizing biomass and benthic coverage by actively managing reserves
3. Establishing a community-led Fisheries Management Bodies (FMBs) as legal entities. 
4. Bringing SSF microbusinesses into the formal economy and strengthening their capacity along domestic value chains."
Expected intervention model: "This project seeks to secure design funding for Cohort 2 funding for the world's first SSF impact bond for the establishment and operation of at least 10 new Managed Access with Reserves (MA+Rs), a fisheries management system which balances sustainable use and protection, in Indonesia and the Philippines. 

In support of the UN's 30x30 targets, the bond revenue will be used to establish MA+Rs within Marine Protected Areas (MPAs) or as Other Effective Conservation Measures (OECMs). This results will strengthening the target geographies' resilience to climate change and mitigation capacity, while enhancing their ability to promote inclusive and sustainable economic growth, directly contributing to SDGs 13 and 8.

This second cohort of the bond aims to convert Cohort 1's proof-of-concept structure to a scalable model of a Social Impact Bond for Cohort 2 and beyond. The launch of Cohort 1 is targeted for Q1 2024.

The vision of Cohort 2 covers: 
- Target investment US$25-50 million
- Outcome funders include governments
- Impact areas include MA+R coverage; Fish biomass stabilization; Benthic coverage (including coral reefs); Microbusiness formalization
- Measurable formalization successes from the innovation piece of Cohort 1 may be included in Cohort Two as premium payments, i.e. microbusiness formalization"
Policy sectors — Employment and private sector development: No; Education: No; Social protection: No; Criminal justice: No; Health: No; Agriculture: No; Environment and climate change: Yes; Water, Sanitation and Hygiene: No; Energy: No; Humanitarian: No; Early Childhood Education: No; Other: 
Primary SDG goal: 1,8,13
Country income classification of beneficiaries — Low-income: No; Lower-middle-income: Yes; Upper-middle-income: Yes; High-income: No
Notes: Data for this pipeline project was last updated in March 2024
Delivery location: Philippines, Indonesia