<\/p>\n
The board of South African National Parks (SANParks), which oversees some of the world\u2019s premier nature reserves, will consider whether to change its corporate structure to allow it to borrow directly from capital markets and retain more of its earnings.<\/p>\n
A proposal that will examine the case for converting the institution into a different form of company under the rules governing state-owned entities will be tabled at a meeting scheduled for 26 to 28 January.<\/p>\n
Read: SA declares national disaster in response to deadly floods<\/p>\n
If the board gives the go-ahead, it would still need approval from the environment department and then the National Treasury.<\/p>\n
The fact that SANParks is a public entity limits its ability to \u201cunlock the capital markets\u201d, Howard Hendricks, the institution\u2019s managing executive for conservation, said in an interview. \u201cIt\u2019s the institutional arrangement that will allow us the flexibility to explore those avenues of funding.\u201d<\/p>\n
SANParks runs 21 national parks that together cover about 40 000 square kilometres, according to its website \u2013 an area that\u2019s almost the size of Switzerland.<\/p>\n
ADVERTISEMENT<\/p>\n
CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n
Listen\/read:<\/p>\n
Among those is the Kruger National Park, which has an abundance of elephant, lion and other animals, and is one of South Africa\u2019s biggest tourist attractions.<\/p>\n
The reserve was this month hit by the worst floods since at least 2000, with the deluge damaging lodges, camps and other infrastructure.<\/p>\n
\nThe proposed change would give SANParks scope to tap growing demand for financial instruments linked to preserving biodiversity and wild spaces.<\/p>\n<\/blockquote>\n
Last year, Goldman Sachs Asset Management started its first biodiversity fund for bond investors, and in 2024 JPMorgan Chase & Co said it intended to step up work on designing products for clients interested in exploring the risks and opportunities around the theme of biodiversity.<\/p>\n
In South Africa, Rand Merchant Bank has been\u00a0exploring\u00a0selling debt to raise money for lion and African wild dog conservation. The instruments could emulate a World Bank-backed bond that pays returns based on the growth of black rhino populations in two parks.<\/p>\n
Read: Rand Merchant, South Africa Parks mull conservation, Rhino bonds<\/p>\n
Hendricks stressed that any financial arrangements SANParks enters into will also need to benefit communities affected by its activities to ensure there is public support for conservation.<\/p>\n
\n\nADVERTISEMENT:<\/p>\n
CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n
\nSANParks posted record revenue of R4.1 billion ($250 million) in the year to end March last year.<\/p>\n<\/blockquote>\n
That exceeded its expenditure by R311 million, a surplus that it\u2019s required to return to the government under its current financial arrangement.<\/p>\n
\nIt received almost R1 billion of state funding during the year.<\/p>\n<\/blockquote>\n
The institution is exploring a range of financial options to sustain its operations, including selling carbon credits and a so-called \u2018finance for permanence\u2019 arrangement, whereby donor funding would be used to protect additional land in a manner that generates revenue.<\/p>\n
\u00a9\u00a02026\u00a0Bloomberg<\/p>\n
Follow Moneyweb\u2019s in-depth finance and business news on WhatsApp here.<\/em><\/p>\n<\/p><\/div>\n