This study aims to unpack the potential benefits and risks of innovative financial mechanisms at work in Africa through the analysis of three case studies: an environmental trust fund created to finance the network of protected areas in Côte d’Ivoire; a conservation concession agreement (and thereafter a REDD-related private non-profit company) in the Gola Rainforest in Sierra Leone; and a biodiversity stewardship and tax incentive approach developed in South Africa.
According to the study, essential financial and institutional innovations are at play and, when public and private involvement are effectively combined, not only can innovative financing contribute to more efficient management in and around protected areas, but it can take place on a significant scale. In this regard, three significant findings emerged: first, that private funding is a complement, rather than a substitute, to public financial support; second, that co-ordination of private and public action benefits from a contractual approach that favours conditionality; and third, this contractual approach needs to be secured at the regulatory level.
However, innovative mechanisms remain complex and numerous stakeholders and conditional agreements generate significant transaction costs. Furthermore, due to financial market unpredictability, private funding might not be reliable enough to complement the fragile support coming from donors and national public funding.