Thank you - Senator Coons, Senator Braun, Senator Collins, Senate Caucus Members - for having me here today.
There are so many reasons why we need to keep our Ocean healthy. As well as being home to roughly 94% of all the Earth's living species, our Ocean provides food for billions of people and income for tens of millions.
It also produces around half of all the oxygen we breathe and absorbs over half of all man-made carbon dioxide. We need our Ocean to survive. However, it is under threat from climate change, pollution, rampant overfishing, habitat destruction and of course climate change- they are warming, acidifying, and deoxygenating.
The deterioration of the health of our ocean and of coastal ecosystems such as coral reefs, sea grass and mangroves- will magnify the impact of extreme weather events on coastal communities in the future.
Sea level and population density projections indicate that 800 million people will be at risk of coastal flooding and storm surges by 2050 – the majority in Least Developed Countries and Small Islands Developing States, the countries the least able to adapt to it.
Estimates of the funding needed to safeguard our ocean ecosystems and foster a blue economy vary from $ 175 billion to $ 459 billion annually. According to one estimate, only $ 11 billion has been invested in sustainable ocean projects by official development assistance and philanthropy in the past decade.
Working together, the public and private sectors have a critical role to play in closing this gap. This is at the heart of what GCF does as the world’s largest climate fund.
I would like to tell you about one GCF initiative which epitomizes GCF approach: the Global Fund for Coral Reefs.
This is a USD 500 million private equity fund to encourage investments in the blue economy, including sustainable fisheries, sustainable aquaculture, eco-tourism, and possibly productive use of kelp forest. Managed for GCF by Pegasus Capital Advisors, a US-based impact investment manager, the Fund targets 17 countries in Africa, the Asia-Pacific, Latin America, and the Caribbean.
Building on a public-private partnership structure, GCF is providing $ 125 million of anchor and first loss equity to mobilize three times this amount in private equity. In turn, the fund will provide critical growth equity to entrepreneurs and mobilize a multiple of its equity investment in debt finance at the individual investment level, catalyzing finance at scale to save coral reefs. Katharine will tell us more about the structure and portfolio of the Fund.
If it succeeds, the fund will create a new asset class. It will demonstrate that investing in coral reef protection is a legitimate investment, both for large institutional investors and ordinary citizens. In future we could imagine going to our bank and asking for a percentage of our private savings to be invested in funds to protect coral reefs. And we will be able to truly shift financial flows at scale to protect our ocean and future.
The Global Fund for Coral Reefs is already up and running – and we need more such initiatives. GCF is currently working with the Asian Development Bank on another innovative concept: a Blue Economy Co-Investment Platform for the Pacific.
It will bring together different public and private sector actors and explore new forms of blended finance to de-risk first mover high impact projects in the blue economy to establish a commercial track record for sustainable ocean investment, pre-condition for crowding in private finance. Investments could include energy efficient shipping; climate resilient infrastructure; and linking marine protected areas and comprehensive marine fisheries reform.
With its close to 200 public and private partner organizations, GCF is determined to play its role in protecting the world’s oceans, and the people who are dependent upon them.
Thank you for your kind attention.