Washington, D.C., June 27, 2005
— The International Finance Corporation, the private sector arm of the World Bank Group, recently signed a $5 million Global Environment Facility grant agreement for an innovative public-private partnership that aims to ensure effective long-term management and sustainable financing for the Komodo National Park, home to some of the world’s richest diversity in the sea and on land.
Declared a World Heritage site in 1992 because of it exceptional biodiversity, Komodo National Park is famous for its unique Komodo dragons. The park also features one of the world’s richest coastal and marine environments, including, coral reefs, bays, mangroves, and sea grass beds. Over 4,000 people live within the park’s boundaries, many of whom are dependant on subsistence fishing in nearby waters.
The grant funding of $5 million will be provided by IFC to Pt Putri Naga Komodo (PNK), an Indonesian limited liability company jointly owned by the Nature Conservancy and JPU, an Indonesian private tourism enterprise. In a public-private partnership with the Indonesian government and the local communities, PNK will promote the park as a tourist destination and increase the net benefits to conservation and local development.
The potential for tourism in and around the Komodo National Park is significant but vulnerable to fluctuations in the international market. PNK will use the grant, as well as a matching grant from the conservancy over a seven-year period to fund start-up and operating costs of PNK and a comprehensive program of action, including tourism management and the establishment of a sustainable financing system through adequate entrance fees; support to micro-credit for the local communities; setting up and implementing collaborative management procedures; and developing and implementing a park management plan. After seven years, it is expected that the joint venture,-whose profits are to be used solely for its program of action, is commercially viable and that this public-private partnership model can be sustained and provide expected economic, social, and environmental benefits.
“IFC is pleased to be participating in this innovative and exciting business venture that will identify and apply ways of increasing sustainable revenues for the local communities and improve the management of the Komodo National Park, thus conserving the unique local ecology.” said Rachel Kyte, director of IFC’s Environmental and Social Department.
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
IFC is an executing agency of the Global Environment Facility (GEF), which provides funding to meet the incremental costs of measures to achieve global environmental benefits in seven focal areas - climate change; biological diversity; international waters; ozone layer depletion; desertification, and persistent organic pollutants.
