Climate Smart Shrimp Fund

About

Food security remains an enormous challenge as the world moves closer to global warming beyond 1.5°C above pre-industrial levels. Global food production needs to increase by at least 50% by 2050 to meet demand.

Within this context, the shrimp sector is now the world’s fastest-growing protein source. However, the sector is not without its challenges. The establishment and expansion of shrimp farms in intertidal zones have resulted in the loss of nearly 250,000 hectares of mangrove forest over the last two decades, while risks related to human and labor rights abuses, as well as viral disease outbreaks, have limited financing available for farmers on the ground.

Interventions that improve production efficiency, offer adaptation benefits, and sequester GHG emissions will therefore be highly valuable in helping the sector realize sustainable growth.

The Climate Smart Shrimp Fund provides loan packages, supported by a technical assistance facility, that enable shrimp farmers to transition to more sustainable and efficient production systems while simultaneously restoring mangrove ecosystems.

INNOVATION

The Climate Smart Shrimp Fund (CSSF) is unique in its focus on the shrimp sector in combination with mangrove restoration, supporting farmers that otherwise lack the know-how and financing necessary to sustainably intensify shrimp production. While the restored mangroves provide an important filtering service for farm effluents and increase the climate resilience of the shrimp farm, intensification in the remaining ponds more than makes up for the loss of production from ponds where mangroves are restored. As a result, shrimp farms enjoy increased production and efficiency while simultaneously decreasing climate and disease risks.

“Accelerating the development of our USD 100M Climate Smart Shrimp revolving loan facility through the Lab will allow us to scale more quickly and drive climate adaptation through investing in the restoration of mangrove forests and responsible intensification of shrimp farms globally,” – Dane Klinger, Director of Aquaculture at Conservation International. 

IMPACT

By supporting the transition to climate-smart production, CSSF will improve the resilience and economic outcomes of shrimp farmers, provide consumers with a higher quality product, and incentivize the shrimp sector itself to hasten its transition to more sustainable methods of production. Following pilot loans in Indonesia, Ecuador, and the Philippines to test results and secure potential future partners, Conservation International will proceed with the establishment of the formal fund. This fully scaled fund will help deliver a broad range of benefits, including enhanced biodiversity, improved coastal protection, farm efficiency and rural livelihoods, as well as large-scale carbon sequestration.

 

DESIGN

CSSF consists of two separate sleeves. The first is a technical assistance (TA) facility managed by Conservation International, and the second is a revolving debt facility that originates and services loans to shrimp farmers to fund intensification and restoration.

The TA facility – funded largely through grants – will provide specialized technical support, including training to help farmers implement best management practices for intensification and usage of relevant equipment, as well as the monitoring of mangrove restoration efforts. This will allow farms to obtain sustainable aquaculture certifications, such as those provided by Best Aquaculture Practices and the Aquaculture Stewardship Council.

Moreover, loans provided through the debt facility provide farmers with the means to upgrade existing farm equipment and infrastructure. While this varies on a farm-to-farm basis, such upgrades may include the provisioning of new aerators, auto-feeders, and disease monitoring and management equipment, as well as sensors for monitoring dissolved oxygen content, water temperature, and other indicators.

Together, these two sleeves provide a unique loan bundle to help farmers reduce pollution and disease risks while improving farm efficiency and broader climate resilience.

*Photo credit: Audrie Siahainenia/Conservation International 

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