A sound and convincing business case is necessary to generate support and financing for the particular Building with Nature application. Key challenges are the wider range of avoided costs and co-benefits of Building with Nature to be addressed and the difficulties in quantifying those, due to the ‘soft’ benefits and the performance uncertainties due to (natural) dynamics. Key aspects to consider:
- Defining an optimum business model via integrating traditional engineering and nature conservation expertise with financial knowledge
- Improving estimates of maintenance costs and the additional services and benefits (including coastal access, fish production, carbon sequestration)
- Financing arrangement and pre-requisites (bankable value creation streams)
Being multi-functional and context-specific assures that Building with Nature has many added values and contributions, whereas its dynamics and innovative character form challenges to properly address these elements in the business case for Building with Nature, as in the end, a business case is all about money, right? A business case is defined as ‘a presentation of arguments that outline the rationale for doing a project from the perspective of the entity or entities doing an investment’. There is a positive business case once sufficient public and private investors have been convinced to invest in an undertaking or project. For traditional mono-functional projects this usually means a search for the cheapest solution to fulfil the required function. For Building with Nature setting up a business case means looking holistically to the wider range of costs, benefits, avoided costs and co-benefits within the physical, ecological and societal system.
On the benefit side, Building with Nature provides added values for society by enhanced ecosystem services, whether those necessary for the multiple functions it addresses or in a wider context of nature and landscape values. These benefits must be visualized and capitalized so that they can be incorporated in the decision-making process (e.g. cost-benefit analysis) and used to attract co-finance. On the costs side, the natural dynamics that are embraced as part of Building with Nature will alter the balance between investment costs and maintenance requirements and introduce additional uncertainties. Developing an adaptive approach, and the required financial consequences was also addressed in the enabler section on adaptive management, maintenance and monitoring.
The above highlights the necessity to alter the financial arrangements in developing hydraulic infrastructure. Instead of mono-functional, single-party investment, the process becomes multi-functional and focused on co-investing. In many cases, Building with Nature (also) addresses global challenges on sustainability, such as the SDG’s, making that specific financing solutions targeted at those challenges are potentially within reach. Quantifying and highlighting these benefits in order to come to financial close for these project is thus another goal for the development of the business case.