NbS Triple Win Toolkit: Economics and Finance 87 Financial and administrative barriers Private finance investments require NbS projects to be perceived as sufficiently ‘bankable’ by investors. This is discussed in the previous section, but is likely determined by factors such as the predicted cash flows of the project and its associated risk profile. As in other investments, resulting risk/return profiles of an NbS project willindicate the size of the potential returns and the level of uncertaintythat will form the basis on which an investment decision can be made. The following two factors are commonly reported as the main barriers that prevent NbS from having a positive bankability and thus beingable to access private financing: Insufficient project scale: Many institutional investors require investments in NbS projects to be of a certain scale. This isbecause small projects often do not justify transaction and due diligence costs, or might not generate traditional financial returns128,129,130. For example, a blue carbon project that aimsto generate carbon credits by planting mangroves will in practice need to cover a sufficient area to compensate for the costs of administrating the credits (for instance by registering the project through the Plan Vivo standards). High risk profile for debt or equity financing: Low or uncertain revenue streams, as well as the typical time lag between investment and repayment are factors that are often cited to make an NbS project too risky for private finance investment. Since non-financial investment outcomes (e.g. on biodiversity) are not incorporated into the risk assessment process, the associated risk profile of non-NbS investments is positively underestimated without considering any nature-related risks, which makes these options more attractiveto investors than NbS projects129,132,133,134. An agroforestry NbS, for example, may need large funds at the beginning of the project,while the financial returns (e.g. through selling timber or rubber,such as in the Royal Lestari Utama project127) may emerge after several years – which negatively affects its risk profile. These types of financial barriers are often underpinned by administrative factors that prevent more NbS projects frombeing developed and meeting general conditions to attract private financing. Common administrative barriers of this kind include: Limited capacity for NbS project development: Not having the right capacity, expertise, and financial literacy on the project side hinders adequate project design. This can result in the absence of clearly mapped financing needs across the project lifecycle, a well-described model for revenue generation, engagement with the necessary partners and stakeholders, or the development of a proof of concept that demonstrates the feasibility and practical potentialof the NbS. Overall, this limits the viability of developing a bankable NbS project127,133,135,136,137. Limited standardisation: The lack of common definitions of NbS, and standardised tools and metrics to track and quantify their benefits prevents them from being adopted more broadly and structurally as an investment opportunity both within the private and public sector. This issue also results in a lack of replicable financial products and communicable data (e.g. suitable KPIs) for project due diligenceand performance monitoring129,133,136,138.