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The World’s First Small-Scale Fisheries Impact Bond

The World’s First Small-Scale Fisheries Impact Bond

Project Lead: Rare
Financial Support:  The UK’s Blue Planet Fund
Location: Indonesia
Project Timeline: January 2024 – December 2025


Rare launched the pilot of the world’s first small-scale fisheries (SSF) Impact Bond at COP28 in Dubai, focused on increasing sustainable, community-led management of coastal and marine resources while improving the livelihoods and formalisation of the SSF sector.   

Through the Impact Bond, Rare will establish five Managed Access with Reserves (MA+Rs) areas, a system for artisanal fishers that balances sustainable use and protection through reserves. The MA+Rs will be implemented within Marine Protected Areas (MPAs) or as Other Effective Conservation Measures (OECMs) in Southeast Sulawesi, Indonesia.  

By establishing and sustainably managing new MA+R sites, Rare will help strengthen coastal marine habitats including coral reefs, mangroves, and seagrasses. The MA+R sites will help build capacity and formalisation of micro and small businesses, bringing artisanal fisher microbusinesses into the formal economy and strengthen their capacity along the domestic value chain. 


Small-scale fisheries play a vital role in coastal communities, contributing heavily to food security, employment, economic growth, and climate resilience. Unfortunately, they face a variety of systemic challenges. Chronic underfunding and shortage of resource, compounded by the sector’s informality, hinders its ability to absorb necessary capital. Such a lack of sustainable management and marine resource protection is reflected within the Ocean, leading to plummeting Ocean biodiversity, and creating an existential crisis.  


Rare’s Impact Bond is an Outcomes-Based Financing (OBF) Model to exclusively support SSF. The model will offer a return on investment when predetermined project milestones are achieved.  

The core repayment metric is in square kilometers of protection, which Rare aims to achieve by establishing MA+Rs. The outcome metrics for interest being considered include biomass stabilization and/or recovery and coral reef health. The structure therefore contributes to the protection and regeneration of valuable coastal and marine natural assets and resilience of climate vulnerable coastal communities. 

  • Investors: The total investment size is $3.6 million, to be provided by one or more investors.
  • Outcome funders: The Department of Environment, Food, and Rural Affairs (DEFRA) via a Contribution Agreement with ORRAA is supporting the structure as an outcome funder. Rare is in active conversation with additional outcome funders to be announced at contract closing. 
  • Service providers: Levoca (performance manager), Reed Smith (legal counsel), PKSPL IPB (independent third-party evaluator).
  • Initial Funder: Pershing Square Foundation provided the funding to complete the impact bond’s feasibility study and design.
  • Data provider: Government of Indonesia.

ORRAA’s Support in Numbers

With ORRAA’s support through the UK’s Blue Planet Fund, Rare aims to:

  1. Mobilise USD $3.6M in investment to unlock USD $9.7M in grant capital in the first Cohort 
  2. Support 70,000 people
  3. Increase an estimated 60,000 ha of ocean protection by establishing 5 MA+Rs 
  4. Stabilise biomass and benthic coverage through sustainable MA+R management
  5. Establish community-led Fisheries Management Bodies as legal entities
  6. Formalise SSF microbusinesses and strengthen their capacity                    
Scaling and Next Steps

Rare completed a feasibility study for the SSF Impact Bond1 in 2023. Now, with support from ORRAA through the UK’s Blue Planet Fund, this project will pilot the proof-of-concept model, aiming to unlock around USD $10M of private, philanthropic and public funding in the first cohort.

The Project has a clear scaling pathway. Cohorts 2 and 3 are planned to be launched in 2026 and 2027-2028, respectively, covering between 25 and 50 new MA+Rs across Indonesia and the Philippines (Cohort 2) and between 50 and 100 new MA+Rs to be determined in Rare Fish Forever countries across the Global South. There is a planned implementation period of five years, respectively.