Public finance alone is insufficient to meet the scale of investment required for nature protection, restoration, and sustainable management. Mobilizing private capital is therefore essential, yet most nature-related projects are perceived as unbankable. They sit at the frontier of bankability: nascent and unproven initiatives that lack historical track records, face high execution risks, and generate uncertain or delayed revenues. This misalignment is compounded by investor behavior, as most financiers demand commercial rates of return, standardized transactions, and short payback periods. Even though investors differ in their appetite for risk, nature projects rarely meet these thresholds. Through a systematic review of literature across five ecosystems and three intervention types, this review identifies persistent barriers: limited financial returns, high risk, high transaction costs, and undervaluation of nature. We note that enabling conditions such as blended finance, risk-sharing instruments, and supportive regulation exist; however, we argue that reframing risk-return dynamics is critical to unlock scalable private finance for nature.
Unlocking Private Finance for Nature: Addressing Barriers and Reframing Risk-Return Dynamics
Year: 2025
