What are the barriers to financing NbS?

The long-term goals and outcomes of NbS pose challenges for conventional investors. Moreover, investors, donors, and research institutes have encountered various barriers to financing NbS. Some of these barriers are specific to a country or institutional context, with a key distinction being whether a country is an aid or a trade-focused nation. However, the following barriers are generally recognized:

• High perception of risk: NbS appears "new" and innovative, making it vulnerable to being cut off in case of project delays.

• Less visible compared to grey solutions (e.g., dams, dikes). Lack of widely spread data on proven NbS results among potential investors and governmental bodies.

• Lack of knowledge about NbS and a shortage of (policy) instruments for project designers and engineers, hindering the incorporation of NbS solutions into projects.

• Need to convince national, regional, and local stakeholders. Local economic benefits are crucial for stakeholders (farmers and government) to see the advantages of NbS.

• Uncertainty about who receives the benefits. Improvement is visible at a local scale but often not at the national level.

• There is difficulty connecting funding with ecosystem services, such as carbon credits. While NbS can be part of services like eco-tourism or certifications for flood-based agricultural products, measures like detention ponds or stream daylighting may not be easily translated into credits.