Charles Darwin Foundation teams with Oceans Finance Company for Galapagos Islands project

Charles Darwin Foundation has teamed up with Oceans Finance Company in a strategic partnership to drive climate impact goals through long-term conservation in the Galapagos Islands.

Renowned worldwide for their unparalleled biodiversity and unique ecosystems, the Equador-based islands in South America face mounting environmental and human-induced threats, the statement said on 10 May.

CDF is an international non-profit tackling the greatest threats and challenges to the Galapagos Islands through scientific research and conservation action.

OFC bridges the gap between natural capital management, nature-based solutions and large-scale blended finance, developing and managing large-scale impact programs and long-term funding mechanisms that enhance ecosystem impacts and uplift communities while generating sustainable returns for investors.

The 16 year partnership will focus initially on channelling resources into four critical CDF research and conservation programs:

1. Marine Biodiversity Research: The marine ecosystems of the Galapagos Marine Reserve (GMR) harbor unique biological communities with a high incidence of endemic species. As a result of intensifying climate patterns, these are at heightened risk of biodiversity loss. Through the use of innovative technology, this program aims to identify and map key diagnostics sites across the GMR such as shallow water coral reefs that may be particularly vulnerable to ENSO events and other anthropogenic impacts, monitor their response to a changing climate and inform management strategies to increase resilience over time.

2. Marine Bird Conservation: Galapagos penguins, flightless cormorants and waved albatross are all endemic to the Galapagos Islands. These sentinel species are also all classified as threatened on the IUCN’s Red List, facing continued risk of population decline due to threats such as climate change, introduced species, pathogens, pollution and bycatch. To conserve these marine birds, CDF aims to gain a better understanding of the impact of these threats on populations and reproduction rates in order to design and implement effective management actions.

3. Sea Turtle Conservation: Important feeding and nesting sites for the endangered East Pacific green turtle in Galapagos are increasingly threatened by tourism, marine traffic and climate change. CDF’s research is helping to identify the key areas where sea turtles are most vulnerable, and to develop solutions to enhance their resilience in the face of these mounting threats.

4. Scalesia Forest Restoration: The Scalesia forest in the highlands of Santa Cruz Island covers about 300 ha, which is 3% of its estimated original distribution. It is home to a unique array of species that depend on it for survival, and acts as an important carbon sink. Research has shown that 5% of its cover is lost annually, outpacing natural regeneration. In 20 years, the forest will become extinct if its main threat, invasive plant species, is not controlled effectively and at scale. CDF’s programme aims to develop efficient methods for managing invasive species and implement large-scale restoration efforts for the Scalesia forest. By doing so, we aim to fortify the resilience of the island ecosystem, sequester additional CO2, and foster a thriving ridge-to-reef environment.

Rakan Zahawi, executive director of the CDF said: "In addressing the pressing issues confronting the Galapagos Islands, climate change is an emergent concern. Its effects extend beyond the islands to the surrounding oceanic life and the Eastern Tropical Pacific region, with significant repercussions for life on the islands themselves. We have observed firsthand the increasing frequency and intensity of El Niño Southern Oscillation (ENSO) events, which bring additional threats such as ideal conditions for invasive species that harm the fragile ecosystem we strive to protect.

"Tackling such a complex global challenge requires sustained, long-term efforts and a focus on building resilience. We are pleased to have found in OFC a partner who recognizes the importance of taking a comprehensive, long-term approach to these issues, and who has the vision and resources to work with us in addressing them."

Erik Wandrag, chief executive officer of OFC, said: “The impacts of climate change, biodiversity loss and pollution are starting to accelerate at an alarming rate, and are clear to see in places like Galapagos. Being able to work with partners such as CDF and COmON to develop practical solutions for this at point of impact, as well as at source of origin, will enable us to expand these learnings to other places across the globe. This partnership with CDF also clearly demonstrates that the innovative complementary funding mechanism that OFC pioneered, can now be super-sized to deliver even more impact in Galapagos as well as the greater Pacific region and can be replicated in other jurisdictions to fund impact programs at scale and long-term.”

Juan Paez, regional head Latin America, Climate Fund Managers, said: “The Galapagos Islands and the surrounding marine environment together represent one of the most important ecosystems on Earth, delivering tremendous environmental, social and economic value. The partnership between OFC and CDF will help to protect this natural capital in the face of global declines in ocean health, preserving it for both current and future generations.”

“We are very thankful to the COmON Foundation for their vision and support in making this partnership with OFC a possibility for CDF and for Galapagos,” added Rakan Zahawi.

The programs, which are set to receive funding as of April 2024, each support the need to achieve selected UN Sustainable Development Goals (SDGs 8, 13, 14, 15, 17) and aim to deliver a net positive environmental and social impact, which will be measured and monitored in line with a structured impact monitoring and evaluation framework.

This novel partnership is an additional, independent outcome of Ecuador's historic debt-for-climate conversion announced in May 2023, which was facilitated by OFC and focuses on providing vital protection for marine life whilst also promoting sustainable fishing and tourism, enhancing ecosystem richness, and building resilience to climate change.

A complimentary transaction undertaken by OFC avails additional funding which not only supports this partnership but marks a significant milestone in the ongoing efforts to safeguard the wider Galapagos ecosystem, preserving one of earth's most precious natural treasures, while at the same time sustaining the local communities that depend on it.

The partnership was facilitated by CDF’s long-time funder the COmON Foundation, as well as OFC’s main shareholder Climate Fund Managers (CFM), a climate-centric blended finance fund manager and its Climate Investor Two (CI2) Fund, a USD 1 billion blended finance facility focused on water, sanitation and oceans infrastructure in emerging markets.

CI2 invested USD 2 million in development capital to the Ecuador debt-for-climate conversion, with the Dutch Fund for Climate & Development (DFCD) and the European Commission (EC), among others, providing the risk capital. CI2’s USD 2 million investment was utilized by OFC to develop the transaction. A further investment in a complimentary structure by CI2 unlocked additional value through which OFC will avail an additional USD 81 million (USD 5 million per annum) to support conservation over the lifetime of the transaction. This additional funding is the source of the CDF donation.

The Charles Darwin Foundation for the Galapagos Islands (CDF) is an international nonprofit that has been present in Galapagos since 1959, operating under a special agreement with the Government of Ecuador. Its mission, and that of its Research Station, is to tackle the greatest threats and challenges to Galapagos through scientific research and conservation action, in order to safeguard one of the world’s most important natural treasures. At present, CDF manages over 25 research and conservation projects and is the custodian of more than 135,000 specimens within its Natural History Collections. Our diverse workforce of over 130 individuals is primarily composed of Ecuadorian citizens, with more than 60 % hailing from the Galapagos Islands. For more information visit: www.darwinfoundation.org

Oceans Finance Company (OFC) bridges the gap between natural capital management, nature-based solutions and large-scale blended finance. It develops and manages large-scale impact programs and long-term funding mechanisms that enhance ecosystem impacts and uplift communities while generating sustainable returns for investors. OFC’s priority areas for investment are:.

OFC’s main shareholder is Climate Fund Managers (CFM), a leading climate-centric blended finance fund manager operating across Latin America, Asia and Africa. CFM raises and deploys climate finance funds in partnership at scale and at pace. Its purpose is to end the climate crisis. Established in 2015, CFM is a joint venture between the Dutch development bank FMO and Sanlam InfraWorks – part of the Sanlam Group of South Africa.