In October 2013, the desire to create a sustainable finance mechanism for marine protected areas (MPAs) in the Mediterranean was expressed through a joint initiative by France, the Principality of Monaco and Tunisia. In December 2015, four founding members – the Principality of Monaco, the French Republic, the Republic of Tunisia and the Prince Albert II Foundation – created a specific entity dedicated to this type of financing: the MedFund.
The fund, which is a hybrid environmental fund, heralds a new approach to green finance in the Principality.
The MedFund thus has two responsibilities: asset management of its financial resources and environmental management of the grants awarded.
This dual function, carried out under the authority of the fund’s Board of Directors, is supported by the Investment Committee, which sets out and monitors the financial investment policy; and the Grant Award Committee, which assesses and allocates the grants awarded.
Here, we explain how the financial organisation works.
First, in terms of its Technical Construction, the fund comprises three elements:
- The Endowment Fund: only the interest and investment revenue are used, the capital is preserved;
- The Sinking Fund: the capital, interest and revenue are used to fund commitments lasting between 5 and 20 years;
- The Revolving Fund: the money, which comes from donations and recurring and annual contributions from partner zoos and aquariums, is used for specific biodiversity conservation purposes.
This asset structure ensures the financial sustainability of the fund, the primary objective of which is sustainable financing for MPAs in the Mediterranean.
Then, in terms of its Investment Policy, the fund adopts the strictest standards when selecting its financial investments.
Operational cooperation with specialist partners in the financial industry, both in Monaco and abroad, ensures a high degree of quality.
There is also careful monitoring of its multicultural, national and international governance.
Finally, it is worth highlighting the unique international cooperation aspect for Monaco’s financial industry.
The MedFund, a Monegasque entity, is funded by States, international governmental bodies, and international and Monegasque private stakeholders.
This demonstrates the ability to make meaningful financial investments from our Principality.
This is an organisation which must be supported and will serve as an example of how best to develop green finance virtuously in the Principality.
