Organisations across England have been awarded up to £100,000 each, as part of the £10 million Natural Environment Investment Readiness Fund to drive private investment in nature and tackle climate change.

                                                                                                                                      Aerial view of the north bank of the Humber estuary, one of the sites

                                                                                                                                      where the UK Centre for Ecology & Hydrology wants to market the

                                                                                                                                      climate benefits of saltmarsh restoration

Projects to restore kelp forests, create new woodland, deliver natural flood risk management, and improve water quality are among an initial 27 schemes to benefit from the new fund, Defra, the Environment Agency & Natural England have announced today (14 July 2021).

The funding will be used to develop the projects to the point they can provide a return on investment by capturing the value of carbon, water quality, biodiversity and other benefits provided by natural assets such as woodlands, peatlands, catchments and landscapes.

Funding has been awarded to environmental groups, businesses and local authorities to develop projects that protect and enhance nature while also demonstrating innovative approaches to generating revenues from the wide range of benefits that nature provides.

Revenues will be generated through the sale of carbon and biodiversity units, natural flood management benefits and through reduced water treatment costs. In developing these revenue streams, the Fund will help create a pipeline of projects for the private sector to invest in, and develop new funding models that can be scaled and replicated elsewhere.

Projects receiving funding focus on tackling climate change and restoring nature through schemes such as woodland and habitat creation, peatland restoration, sustainable drainage and river catchment management.

Examples include developing a carbon credit model for saltmarshes across England; kelp forest restoration off the Sussex coast; woodland creation in North Yorkshire; and peatland restoration in Greater Manchester.

United Utilities is among the successful applicants. The water company will receive funding of £66,500 to establish Environmental Impact Bond model for phosphorus removal from the Irwell catchment and an investment case to deliver up to ten sustainable drainage systems to industrial estates and other nature based solutions.

The project will result in an investment case supported by potential buyers, the transaction details, and how the interventions will be delivered. The project is expected to have relevance across the water sector.

Chair of the Environment Agency, Emma Howard Boyd said:

“With the right structure, nature-based projects can be scaled up by private finance, helping to reduce emissions, prepare for climate shocks and create jobs.

“From a new business model for multi-functional forestry in Yorkshire, to an investment fund to transform farmland in Norfolk, these projects will provide evidence of funding models to make industries fit for the future, reach net zero by 2050, and create a nature positive future.

“With COP26 coming to the UK this year, this demonstrates how to create investable propositions for nature based solutions to the climate emergency.”

Working on behalf of Defra and HMT, delivery partners the Environment Agency, Natural England and the Access Foundation for Social Investment will support the projects and make the knowledge generated available to the public to encourage similar approaches to access private sector finance for nature projects in the future.

The Green Finance Institute (GFI) has supported DEFRA and the Environment Agency throughout the Fund’s launch including leading a series of educational workshops for interested applicants, and acting as third party assessor and advisor over the application and awards process.

Subject to confirmation, the Environment Agency and Defra are planning to launch a further application round later this year.

Benefits the schemes will deliver include improvements in water quality, floods resilience, habitats creation, peatland restoration, carbon storage, river restoration and natural flood management.