Antananarivo, 6 December 2021- The Ministry of Economy and Finance of Madagascar (MEF) and the German development bank KfW have signed two contracts for financial assistance worth a total of 45,7 million euros for the protection of Madagascar’s biodiversity. This endowment will be used to contribute to the capital of the Madagascar Foundation for Protected Areas and Biodiversity (FAPBM). The income generated by this capital will provide protected areas and local communities with means to sustainably strengthen the fight against the growing pressures on the country’s biodiversity and natural resources.
The priority area of German development cooperation in Madagascar is environmental protection, biodiversity conservation and sustainable use of natural resources in the energy and agriculture sectors. Through KfW, the German government has been committed to the sustainable financing of the Madagascar Protected Areas System (SAPM) for more than 30 years, either through direct financing of Madagascar National Parks (MNP) or through capital contributions to FAPBM.
This makes the German government the largest donor in the environmental sector. This fourth and fifth contributions of KfW to the capital of FAPBM reinforces this long-standing commitment and reflects the priorities of German cooperation. Positive impacts will be brought about by this valuable financial support:
– Strengthening the means to protect and address threats to protected areas, so that healthy ecosystems continue to provide the essentials of human life such as water, energy and medicines, and prevent extreme events;
– The financing of sustainable natural resource management initiatives including alternative and income generating activities for the benefit of communities as a support to the sustainable development of the country: about 365,700 individuals directly benefiting from value chains, about 49,000 direct jobs (patrollers, guards, …), about 16,5 million people living around protected areas benefiting from ecosystem services;
– Securing the operation of the national parks and reserves of the Madagascar National Parks network as a priority and then of the new protected areas (NPA), not yet financed by the FAPBM, which are among the most sensitive in terms of biodiversity from 2023.
The signing ceremony was held in the Signing Room of the Ministry of Economy and Finance, in the presence of Mrs. Rindra Hasimbelo Rabarinirinarison, Minister of Economy and Finance, Mr. Martin Bostroem, KfW Expert and Mrs. Nanie Ratsifandrihamanana, President of the Board of Trustees of FAPBM.
The Minister stressed that “The challenges are great, but together we will succeed. Indeed, we have to face two important threats. The first is human actions and the second is climate change. We must act now, not tomorrow or wait until 2030.”
KfW considers the Foundation for Protected Areas and Biodiversity of Madagascar (FAPBM), as well as Madagascar National Parks (MNP) as a pillar of environmental protection and biodiversity in Madagascar. The local communities of the protected areas benefit from the protection of habitats and their economic potential, clear regulations on use as well as from tourism development,” explained the KfW Expert.
The President of the Board of Trustees welcomed this act of solidarity, stating that “Protected areas are the last sanctuaries of our country’s unique biodiversity. They contribute significantly to the national economy and to our daily well-being. But they are under a lot of pressure, which is enhanced by the pandemic and its impacts on the tourism sector as well as by the effects of climate change. We thank the German cooperation for this financial support which comes at the right time to reinforce the efforts of the protected areas managers and the local communities. FAPBM renews its commitment to support them through our funding mechanisms.”
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ANNEX 1: History of KfW contributions through the FAPBM
Contributions to the capital of the FAPBM
The endowment is an important contribution to the sustainable financing of protected areas in Madagascar. Indeed, instead of paying donor contributions directly to protected area managers, FAPBM pools them into an endowment capital with a mechanism for sustainability. The capital received is invested on the international financial markets and generates annual income.
The annual cost of managing all terrestrial and marine protected areas in Madagascar is estimated at USD 10/ha. Assuming that each investment in the Foundation’s capital can generate 3% annual income indefinitely. A contribution of USD 1,000,000 will therefore generate USD 30,000 each year and preserve 3,000 ha of protected areas.
- FAPBM I:
- EUR 4,5 million in 2011
- EUR 0,5 million in 2012
- FAPBM II: EUR 22 million in 2015
- FAPBM III: EUR 4,5 million in 2018
- FAPBM IV : EUR 15,1 million in 2021
- FAPBM V: EUR 30,6 million in 2021
Remission of debts
In 2003, a German Debt Forgiveness Agreement and a special agreement was signed between the German Government, through the German Development Bank KfW, and the Republic of Madagascar for an amount of EUR 10,225,837.60.
A part of the erased debt is converted into an endowment to the capital of FAPBM. Another part becomes a KfW sinking fund in favor of ANGAP (now Madagascar National Parks or MNP). It was planned to be paid in annual installments. Its management has been transferred to FAPBM from 2005. 5 protected areas of the MNP network benefit from the sinking fund: Ankarafantsika, Marojejy, Andringitra, Kirindy Mitea and Tsimanampetsotsa.
ANNEX 2: About the 3 entities
The Ministry of Economy and Finance of Madagascar
Madagascar is considered as a country of mega diversity. The varieties of climates and reliefs as well as the isolation of the island for more than 160 million years have favored the development of an exceptional fauna and flora. It is also one of the ten hotspots in the world because of the very high level of threat to this biodiversity, in one of the poorest countries in the world.
In response to these threats, the government of Madagascar has created protected areas (PAs). In 2020, the 122 protected areas (PAs) cover a total area of over 7,120,000 ha. These protected areas are managed by Madagascar National Parks (MNP), NGOs and/or international or national associations.
The Ministry of Economy and Finance along with the Ministry of Environment and Sustainable Development created the FAPBM in 2005 with the support of WWF and Conservation International to sustainably finance protected areas.
Read more: www.mefb.gov.mg
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KfW
For more than 50 years, KfW Development Bank has been helping the German Federal Government to achieve its objectives in development policy and international development cooperation. In this respect, it is both a bank and an experienced development institution with financing expertise, in-depth knowledge of development policy and many years of national and international experience. On behalf of the German Federal Government, and primarily the Federal Ministry for Economic Cooperation and Development (BMZ), it finances and supports programs and projects involving mainly public sector actors in developing countries and emerging economies – from their conception and implementation to the monitoring of their success. Its aim is to help partner countries fight poverty, maintain peace, protect the environment and climate and shape globalization in an appropriate way.
Read more: www.kfw-entwicklungsbank.de
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Madagascar Foundation for Protected Areas and Biodiversity (FAPBM)
Created in 2005, FAPBM is a private Malagasy trust fund dedicated to the conservation of Madagascar’s biodiversity. Its mission is to contribute to the sustainable financing of the Madagascar Protected Areas System (SAPM), to contribute to the conservation of biodiversity, to the maintenance of ecosystem services, to the well-being of the population, to the fight against climate change and to promote good management within SAPM. Each investment in the Foundation’s capital generates perpetual annual income, which is primarily dedicated to conservation, administrative management and community development activities in protected areas. The Foundation is internationally recognised for its expertise in protected area funding, transparency, good governance of funds and the relevance of its interventions and sustainable impacts.
Read more : www.fapbm.org
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