Local Investment in Natural Capital

The West Midlands Combined Authority (WMCA) published its Natural Environment Plan (NEP) in September 2021.

This was produced in collaboration with stakeholders from the public and third sectors and sets out the Authorities ambition to protect, enhance, and restore the natural environment across the West Midlands, for the benefit of the region's ecosystem, people, and communities.

On the back of this NEP work, the WMCA was selected by Government as one of just four areas in the UK to deliver Local Investment in Natural Capital (LINC) programmes.

These programmes are key elements in the Government's new Green Finance Strategy (2023) to support a green industrial revolution and transition the UK to a climate resilient, nature-positive, net-zero economy.

The ambitions of the LINC programme are aligned with the WMCA's NEP, and this includes the need to explore new financial mechanisms (e.g., leveraging private sector finance, green bonds, climate bonds etc) to help attract investment towards environment driven project opportunities.

The WMCA now requires consultancy support from an organisation(s) with significant knowledge and experience in establishing green finance investment platforms, developing investment ready natural capital pipelines/portfolios, and a track record in securing blended finance.

This consultancy support is expected to provide innovation and knowledge generation that will help develop solutions to the problems outlined below- a) The WMCA geography is predominantly urban with a fragmented and limited land bank for large-scale natural capital schemes. b) Market research indicates investors are focusing on environmental projects of landscape-scale with multi-million-pound investment opportunities. c) Constituent Authorities are in significantly different states of readiness with regards to Biodiversity Net Gain (BNG). d) Lack of local governance arrangements and delivery frameworks. e) Lack of models, learning and evidence of 'what works' f) The few regional natural capital projects which are more "mature" in their development have already started their own journey to securing investment, but are struggling due to lack of scale, capability, and capacity.

Upon completion of this contract the WMCA expect the appointed consultant to deliver the following outputs- I.

Stakeholder engagement activities.

II.

A market research report.

III.

A regional investment vehicle/fund/platform.

IV.

A regional natural capital project pipeline and aggregation framework V.

An options appraisal and roadmap VI.

A natural capital investment prospectus.

VII.

A natural capital finance strategy.

VIII.

An investment in natural capital business case and growth plan.

IX.

Information architecture - data for pipeline, investment vehicle, and MRV purposes X.

Pilot projects, case studies, and end of project report.

XI.

An engaged cohort of project owners, sellers, buyers, and investors.