INNOFIN - Innovative financing models for nature based solutions
Forest growing after restoration in Honduras.
INNOFIN addresses critical financing barriers that limit the implementation and scaling of nature-based solutions (NbS).
Details
- Period: 2025-12-01 – 2030-11-30
- Funder: Formas
Description
Nature-based solutions (NbS) are increasingly recognised as cost-effective pathways for carbon dioxide removal, biodiversity uplift, and sustainable livelihoods, and are essential for achieving several SDGs. However, they remain underfunded and structurally constrained, with a misalignment between project implementation and financing structures.
This project takes a co-creative approach across five diverse case studies in Sweden, Namibia, the Democratic Republic of the Congo, Honduras, and the Baltic Sea to develop, pilot, and evaluate innovative financing mechanisms to scale high-integrity NbS initiatives across varied ecosystems. Through co-design with communities, policymakers, and private actors, we aim to develop and conceptualize adaptable, fit-for purpose financing models that reflect both local realities and global climate and biodiversity ambitions.
By generating case-based insights, fostering institutional learning, and producing actionable tools for project implementers, investors, and policymakers, we aim to transform how NbS are valued, funded, and implemented in practice.
Partners
Academic partners
Academic partners
- Uppsala University Conflicting Objectives Research Nexus (UUniCORN)
- The Department of Business Studies at Uppsala University
- The Department of Ecology at the Swedish University of Agricultural Sciences (SLU)
- The School of Management at Université Catolique du Congo (UCC)
Societal partners
- Voxnadalen
- Initiativ Utö
- CIRAA SA-DC
- Paskaia
- Transformity
Cases
Biosphere Reserve Voxnadalen – Sweden
This case study focuses on transitioning from clear-cutting practices to closer-to-nature forest management, enhancing biodiversity, carbon storage, and ecosystem resilience. An earlier co-creation process with forest owners, entrepreneurs, and local authorities identified the need for capacity building in alternative forestry practices and new compensation models for forest owners. Financing challenges include the development of new compensation models and the design of credits that capture long-term biodiversity and carbon benefits. The key actors are forest owners, local entrepreneurs, local authorities, and companies supporting regenerative forestry.
Through this case study, we aim to connect forest owners with companies committed to regenerative forestry and generate insights into financing mechanisms and the role of nature-based enterprises in supporting sustainable forestry transformation.
Utö, Stockholm Archipelago – Sweden
In the Stockholm Archipelago, Sweden, this case study examines the restoration of the Baltic Sea, one of the world’s most polluted seas, suffering from eutrophication, biodiversity loss, and habitat degradation due to nutrient runoff, industrial activities, and overfishing. Local stakeholders have developed and refined efforts to restore seabed meadows, yielding promising results for capturing nutrients and improving aquatic biodiversity. However, their efforts are hampered by the lack of effective, scalable financing to sustain and expand marine restoration. The actors include local NGOs, communities, policymakers, and private sector investors. The ambition of this case study is to explore the development of an integrated credit system to unlock sustainable financing for marine ecosystem restoration.
Lake Tumba – Congo DRC
The Lake Tumba Region in the Democratic Republic of Congo, spanning 80,000 km² within the Congo Basin, presents a large-scale opportunity for landscape and waterscape restoration. This UN Priority Conservation Area, rich in freshwater ecosystems, faces threats from logging concessions, plantation agriculture, oil prospecting, commercial hunting, and demographic pressures, leading to rapid ecosystem degradation. Financing challenges include the need to secure sustainable revenue through biodiversity and carbon credits while addressing competing land-use interests and demographic change. Local fishing communities, conservation organizations, government authorities, and private sector actors are central stakeholders. The case study aims to explore how NbS financing mechanisms can enhance socio-ecological resilience, reconcile land-use conflicts, sustain livelihoods, and preserve critical aquatic and terrestrial ecosystems.
La Mosquitia – Honduras
In La Mosquitia, Honduras, the ecological need centers on reversing savannah degradation and promoting forest regeneration. Financing challenges involve leveraging carbon credits to support sustainable livelihoods and ensuring that co-benefits, such as biodiversity and community development, enhance the value of carbon credits on the market. Key actors include Paskaia (project developer), local communities, carbon credit certifiers, and private investors. The objective of this case study is to explore how carbon credits can promote equitable development, diversify local income streams, and strengthen financial resilience.
Ohangwena and Oshikoto – Namibia
More information about this case will be presented shortly.