With a sound business case on can convince others to finance a Building with Nature project. Building with Nature solutions help to avoid costs and also have important co-benefits for society. However, it can be a challenge to quantify those. Nature is not always predictable so it might be uncertain how much costs will be avoided. Co benefits often are public values rather than private goods. Key aspects to consider are:
- Defining a business model by combining financial knowledge with engineering and nature conservation expertise.
- Providing better estimates of maintenance costs, services and benefits such as fish production and carbon sequestration.
- Creating a financial arrangement with bankable value creation streams that reflect the identified costs and benefits.
Being multi-functional assures that Building with Nature provides many added values for society. However the dynamics of nature and the innovative character form challenges to properly address these elements in the business case for Building with Nature. In the end, a business case is all about money,….. but that is only in the end. It is crucial to quantify all avoided costs and provided benefits as good as possible to be part of the business case.
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.