A US$15 million Green Climate Fund (GCF) investment will help establish a US$60 million fund to finance locally owned businesses protecting reefs and strengthening climate-resilient livelihoods in Fiji, Tonga and Vanuatu.
The Matanataki Pacific Fund 1 will invest in about 15 to 20 small businesses and community-owned cooperatives working in waste management and recycling, regenerative agriculture, sustainable fisheries and low-impact tourism.
GCF Regional Director for Asia and the Pacific, Hemant Mandal, said the investment would help attract additional capital for Pacific businesses delivering climate adaptation benefits.
“GCF’s anchor investment will help catalyse a fund targeting US$60 million in capital to invest in locally led businesses that contribute to reef resilience in Fiji, Tonga and Vanuatu,” Mandal said.
The fund is expected to contribute to the restoration or protection of more than 50,000 hectares of terrestrial and marine ecosystems.
Mandal said the initiative would demonstrate how blended finance could strengthen local ownership, increase women’s economic participation and support climate-resilient livelihoods.
Pacific island countries face growing threats from climate change, including coral reef degradation that undermines food security, coastal protection and the livelihoods of communities dependent on marine resources.
However, small businesses providing climate adaptation solutions often struggle to secure commercial financing because of perceived investment risks, small transaction sizes, limited exit opportunities and a lack of long-term capital.
Matanataki Pacific Fund 1 aims to address these barriers by providing patient equity and quasi-equity financing, alongside business support before and after investments.
A donor-funded technical assistance facility will help businesses prepare to attract investment and strengthen their operations.
The fund will also connect businesses across four sectors to improve local supply chains and support economic activities that contribute to ecosystem protection and climate resilience.
Women are intended to be central beneficiaries and decision-makers under the initiative.
Matanataki Pacific Fund 1 is the Pacific’s first dedicated adaptation-focused private equity fund. Its investment model will prioritise self-liquidating instruments to help Pacific founders and communities retain ownership and build local wealth.
The approach is intended to demonstrate that investments in climate adaptation can deliver commercial returns while supporting locally led climate action.
The fund’s focus on locally owned enterprises is designed to provide communities with access to capital for businesses that protect ecosystems and strengthen livelihoods, rather than relying solely on grant-funded projects.
The GCF investment will serve as anchor capital for the wider fund, which will target businesses in Fiji, Tonga and Vanuatu.
The initiative’s expected results include stronger community livelihoods and improved protection of ecosystems and the services they provide.
