A USD 100 million revolving loan facility supporting SME shrimp farmers to adopt controlled intensification and other responsible aquaculture practices to increase shrimp yields and profits, while contributing to ecosystem restoration that offers mitigation and adaptation benefits.
Mangrove restoration is recognized as a cost-effective approach to mitigating coastal climate risks, but available parcels for restoration are limited. In shrimp production geographies globally, a large area of former mangroves is used by shrimp farmers, most of whom are underbanked.
The limited access to finance prevents many farmers from pursuing modernization investments that could lead to more ecologically sustainable, profitable, and stable operations.
As a result, most shrimp farmers are limited in their ability to intensify, leaving many ponds in an idle or low-productivity state and unable to increase production without increasing their spatial footprint and converting more land to shrimp ponds.
Incentivizing shrimp farms to restore mangroves on their land, in exchange for access to capital and resources to intensify production responsibly, increases the available area for restoration.
The Climate Smart Shrimp Fund (CSS Fund) will provide tailored financing solutions for farm modernization and restoration investments to shrimp farmers. Coupling access to financing with the delivery of a targeted technical assistance window to partner farms is expected to reduce the risk of default further. The CSS Fund seeks to enable farmers to develop a more robust credit history, improving their ability to access traditional bank financing in the future.
“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.
The fund seeks to restore 15,000 hectares of degraded coastal farmland in areas of previous mangrove cover while advancing sustainable development benefits. According to the proponent, replication across Southeast Asia could restore up to 1,000,000 hectares of extensive shrimp ponds and improve livelihoods for over 50,000 shrimp farmers, with enhanced climate resilience for hundreds of thousands more people in associated communities.
*Photo credit: Audrie Siahainenia/Conservation International
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