The UNCCD commissioned an evaluation of the initial steps to establish a fund to finance efforts to achieve land degradation neutrality.
The evaluation anticipates that the LDN Fund’s "main challenge isn’t going to be finding investors, it’s going to be finding investments".
April 2017: The UN Convention to Combat Desertification (UNCCD) has commissioned an evaluation of the initial steps to establish a fund for land degradation neutrality (LDN). LDN is an objective included in Sustainable Development Goal (SDG) target 15.3, and was recognized by the UNCCD Conference of the Parties as “a strong vehicle for driving implementation of the UNCCD.”
The twelfth session of the Conference of the Parties (COP 12) to the UNCCD, in October 2015, endorsed the definition of LDN as a “state whereby the amount and quality of land resources necessary to support ecosystem functions and services and enhance food security remain stable or increase within specified temporal and spatial scales and ecosystems.” The Parties requested the Managing Director of the Global Mechanism of the UNCCD (GM), in consultation with the Executive Secretary, to develop options to increase incentives and financial support for desertification, land degradation, and drought (DLDD) activities, including the possible creation of an independent LDN fund.
The evaluation indicates that a “robust, diverse project portfolio has been constructed, which in itself is a considerable achievement given the immaturity of the LDN market.”
The evaluation, dated February 2017, provides an independent assessment of the relevance, efficiency and effectiveness of activities undertaken by the GM in the development of the LDN Fund. It pays particular attention to three work streams that were financed by a grant from the Rockefeller Foundation: pipeline development; monitoring, reporting and verification (MRV); and communication, marketing and outreach. The evaluation indicates that a “robust, diverse project portfolio has been constructed, which in itself is a considerable achievement given the immaturity of the LDN market.” The Fund’s operational systems and processes have also been established, although it is noted that the LDN Fund’s development is behind schedule. The analysis attributes the delays, in part, to an overly ambitious work plan, as well as to the innovative nature of the investment approach and the LDN concept itself.
The evaluation notes that the GM’s partnership with private sector actor Mirova, the Fund’s manager, offers a case study for how the UN system can “undertake meaningful, deep engagement with the private sector.” In addition, the Rockefeller Foundation’s support for the establishment of the LDN Fund is viewed as having conveyed a greater degree of credibility “than would have been possible had the Fund been backed solely through ‘traditional’ bilateral and multilateral funding channels.”
The evaluation anticipates that the LDN Fund’s main challenge will not be finding investors; “it’s going to be finding investments.” It recalls efforts to identify “good quality projects that were also commercially focused and of a sufficient size to warrant private investment,” as part of the initial pipeline development.
In its management response to the evaluation, the GM notes that the “joint GM/Mirova team has already identified more than 70 investment opportunities to date,” with sourcing partners including governmental, non-governmental and private sector entities. The GM adds that to “further expand the pipeline of well-crafted, targeted projects” that the LDN Fund could support, the GM will focus on developing a project preparation facility in collaboration with other partners. [Evaluation Report: Support to the Development of the LDN Fund] [Management Response]