Brainstorming Meeting on Impact Financing in the Fisheries Sector in Least Developed Countries and Other Vulnerable Economies

​Background

Development finance has gone through fundamental changes over the past decades, with private capital increasingly taking center stage. This change continues today, with a growing shift away from the traditional development financing model to an “impact financing” model. The shift has primarily been driven by increasing interest in leveraging private capital for social and environmental goals. Against this background, private capital has been increasingly seeking investment opportunities in productive sectors with strong environmental and social impacts, such as agriculture and fisheries. With the adoption of the Sustainable Development Goals (SDGs), the expansion of impact investing offers unique opportunities for financing the SDGs, especially in structurally weak and vulnerable economies such as the Least Developed Countries (LDCs).

UNCTAD’s recent work reveals that several LDCs and small island developing States (SIDS) are endowed with significant fisheries resources and are among the world’s largest fish producers. The fisheries and aquaculture sector holds significant potential for economic and social development, as well as environmental protection. It offers employment opportunities for millions of people, including vulnerable and marginalized groups in rural areas. It is vital for achieving the SDGs and - due to its multifunctional and multidimensional nature - can be attractive for impact investments.

While most LDCs and SIDS enjoy duty-free and quota-free access to the markets of developed countries, taking advantage of this requires obtaining certification for a series of food safety and environmental standards imposed by importing countries and the private sector. Attaining these certifications often necessitates investments to improve the production infrastructure and processes, establishing regular monitoring and control protocols, adjusting current regulations and opening the access to certified laboratory testing facilities. Once obtained, the certification can open significant export markets, ensuring higher incomes, and employment generation, as well as more sustainable fish production. Despite the opportunities presented by export certifications for fisheries, capital markets in LDCs and SIDS are often reluctant to finance the needed investments, and few international investors so far have shown an interest in the sector.

Objectives

The potential and the challenges of the fisheries sector call for both an innovative approach and new development financing models. Impact financing could play an important role in creating such innovative financial solutions. Moreover, the policy and institutional frameworks in LDCs and SIDS should also facilitate impact financing and the participation of the private sector (domestic and foreign) in the fishery sector.

In this context, the Brainstorming Meeting aims to bring together representatives of all interested stakeholders, including development financing institutions, private (impact) investors, and relevant multilateral institutions to identify ways in which development actors and the private sector can facilitate certification of the fisheries sector in developing countries.

The objectives of the meeting are to:

1. Exchange views on how to best direct impact financing to the fisheries sector in LDCs and SIDS;
2. Identify successful experiences and best practices in formulating bankable projects in the fisheries sector;
3. Explore practical ways and means to develop guarantee schemes for private impact investors against potential risks; and
4. Balance the costs and benefits of private certification with a view to seeking ways and means to reduce the cost of certification for exporters from LDCs and SIDS.