Soft Market Test for Local Investment in Natural Capital (LINC)

Below are elements to the programme that WMCA requires consultancy support on from a financial, investor and legal perspective: 1. Building the prospectus (Budget: £50k – £100k) We understand the need to bring scale forward to fully realise the opportunity for investment in the natural environment. The WMCA area provides the opportunity for building a project pipeline at scale, but there are also challenges to achieving this in a dense urban area. The consultant will therefore need to support an innovative approach to the development of a project pipeline to reflect the unique size, pressure and nature of our baseline natural capital i.e. we can't just plant trees and deliver BNG. There has been some initial work to pull together some of this, but we would like the focus of the prospectus to do this in a more systematic way and so that it is attractive to investors. Specific tasks will include: • Establish the scope (type/definition/scale) of the prospectus and phasing of project development (especially understanding the projects that are ‘ready to go’). • Pipeline of investible projects (of different sizes and locations and stages of readiness) • The capacity, capability, structures, systems and processes required for projects including a difficulty/availability/timescale to delivery rating to inform implementation. • Data on the specific impact of investment (both natural environment benefits, but also co-benefits) – including a review of existing tools and methodologies for determining these metrics and understanding of the income potential from investment into natural environment. 2. Building the Fund (Budget: £300k - £380k) The aim of this work will enable us to understand the necessary conditions we need to have in place to give investors confidence in the region’s ability to develop and deliver natural capital projects and coordinate through a Fund; we will do this by building an investor panel as a point of contact throughout the project – this should be drawn from expertise already in the sector and through the contacts of the consultants and stakeholders supporting the project. The specific elements are: • Scoping the demand-side through understanding the role of standards and accreditation, regulation, legislation, mechanisms and the emerging policy horizon in natural environment investing. • The current maturity of investment options, their applicability to the prospectus and its stakeholders. • The opportunity to blend different approaches to financing effectively – drawing on multiple sources to provide scale. • Understanding the potential for outcome buying as it relates to investment in the natural environment. • Investor panel co-design of the prospectus to ensure projects are effective investible propositions. • Understanding the options, scope and purpose of a Fund as well as the recommended route based on pros and cons suitable to the WMCA stakeholder and investment needs • Proceed to establishing an effective legal, governance and operations model for managing the Fund. • Set up the Fund. In addition to this, we will look to use the DEFRA project funding to bring forward two projects to be ready for investment by March 2025. This will involve working with the stakeholder community to accelerate two projects and prove and iterate the region’s approach. 3. Communications and dissemination work (Budget: £45k-£50k) • Project events (e.g. ‘meet the investor’) • Design and dissemination of the investment prospectus • Community of practice engagement and learning events • Preparation of case studies, evaluation and lessons learnt reports to be shared on WMCA website, with a concluding set of case studies and a final report published by 31 March 2025. • End of project event/ Fund launch Additional information: If you are interested in this opportunity, could you express an interest to Mike Webb at Mike.Webb@wmca.org.uk by 2pm on 26th June 2023, then you will receive a set of soft market test questions for further communication.