Digital-Tokens-for-Biodiversity FAQ

1. Who can apply (financial support)?

Applicants legally registered in one of IDB’s 26 borrowing countries where the project will be implemented may apply. The 26 countries are: Argentina, Bahamas, Barbados, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Suriname, Trinidad and Tobago, Uruguay, and Venezuela.

*Applicants developing projects to be implemented in Nicaragua and Venezuela can only apply for Non-reimbursable Technical Cooperation.

Applicants not legally registered in one of IDB’s 26 borrowing countries (see above) but registered in any of the following 22 non-borrowing countries may apply only in partnership with an organization registered and located in one of the 26 borrowing countries where the project will be implemented. The 22 non-borrowing countries are: Austria, Belgium, Canada, China, Croatia, Denmark, Finland, France, Korea, Germany, Israel, Italy, Japan, The Netherlands, Norway, Portugal, Slovenia, Spain, Sweden, Switzerland, United Kingdom, and the United States.

2. In which countries will the projects be implemented?

The projects will be implemented in one or more of IDB’s 26 borrowing member countries: Argentina, Bahamas, Barbados, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Suriname, Trinidad and Tobago, Uruguay, and Venezuela.

*Applicants developing projects to be implemented in Nicaragua and Venezuela can only apply for Non-reimbursable Technical Cooperation.

3. If my organization is registered in Europe, Asia, or other regions, and not in Latin America and the Caribbean, can I apply?

If your organization is legally registered in one of IDB’s 48 member countries, follow the guideline indicated in question 1 above.

If your organization is not legally registered in any of IDB’s 48 member countries, you cannot apply to this challenge.

4. What are the types of funding I can apply for for Track 1?

a. Prototype 

  • IDB Financing: Up to US$ 150,000
  • Counterpart funds to be provided by the Applicant: 50% of the total budget, half in cash and half in kind.

b. Non-reimbursable Technical cooperation

  • IDB Financing: Up to US$600,000
  • Counterpart funds to be provided by the Applicant: 50% of the total budget, half in cash and half in kind.

c. Contingency Recovery Investment Grant (reimbursable)

  • IDB Financing: Up to US$ 700,000
  • Counterpart funds: desirable, but not required 50% of the total budget, half in cash and half in kind. (Counterpart will be positively considered for selection)

5. Could my organization apply to two or more types of funding?

Applicants can apply for one or more than one type of funding, but please note that this decision depends on the characteristics of the business model (i.e., income generating, limited earning potential, financial sustainability, etc.) being proposed.

Please note that after the due diligence process, IDB Lab may propose different financial instruments that may be a better fit for the business model and for the Applicant´s financial management capacity.

6. What are the types of funding I can apply for for Track 2?

a. Non-reimbursable Technical cooperation

  • IDB Financing: Up to US$600,000
  • Counterpart funds to be provided by the Applicant: 30-50% of the total budget, half in cash and half in kind.

7. Could my organization apply to both tracks (track 1: business models1 / track 2: awareness, ecosystem strengthening and governance framework)?

Yes, an organization can apply to more than one track.

8. What type of problems can be addressed through my business model proposal for Track 1?

Solutions should aim to demonstrate how digital tokens, when appropriate, can be an effective tool to help combat the degradation of natural resources and climate change.

Examples of specific solutions to the following problems, but not limited to, that can be proposed by applicants:

a. Problem: Biodiversity protection and restoration as well as nature based climate actions often lack agile, decentralized and transparent ways of funding; moreover, there are practical limits for people to easily invest in bioassets because of diverse barriers of entry.

  • In this sense, can digital tokens assist in creating more effective and inclusive funding mechanisms for biodiversity protection, regeneration and or nature based climate action? If so, how?

b. Problem: Existing regulated and voluntary markets, such as the carbon market, sometimes present barriers of entry, lack of transparency and high operational costs.

  • In this sense, can digital tokens become effective tools to foster more agile, participatory, and transparent markets related to biodiversity protection/conservation? If so, how?

c. Problem: Ecosystems can have multiple data and information points that have to be interlinked and there is a need for more effective sharing of data among regional or global partners for more effective conservation strategies.

  • Can digital tokens allow for better data and information flows among parties that are more transparent, traceable, secure and agile?

d. Problem: New regulations and frameworks such as the TCFD and the TFND include provisions related to the value of nature and the risks that the loss of biodiversity represents to industries and financial institutions. These frameworks require the development of effective and transparent means to ensure the achievement of corporate sustainability targets.

  • Is there space for digital tokens to add value in the operalization of these new frameworks? If yes, how?

e. Problem: Public policy on biodiversity sometimes lacks transparency and access to greater funding for implementation.

  • How could digital tokens be explored for result-based financing? Are there opportunities to untapp decentralized financial resources? How can they help the advancement of biodiversity conservation and climate action targets? Could digital tokens be harnessed for countries to implement, monitor and report in a transparent and traceable way on their nature-based solutions (NbS)ix, across their relevant plans and targets?* **

*including: Long-term Strategies (LTS); Nationally Determined Contributions (NDCs); National Adaptation Plans (NAPs); NBSAPs; and Land Degradation Neutrality (LDN) targets

**Solutions presented in this challenge must be in compliance with public policy (laws and regulations etc) but not explicitly deal with or try to change public policy.

f. Problem: There is a need for innovative approaches that can come from unexpected perspectives and contexts.

  • What would be the most innovative way (based on existing needs and priorities in the region and sector) of harnessing digital tokens for the conservation and restoration of natural assets

9. Do I have to use a specific blockchain network?

No, you can use any type of blockchain network of your choice.

10. Will IDB Lab fund the complete project if my model/solution is selected for Track 1?

IDB Lab may fund up to 50% of the total project budget; therefore, Applicants must be prepared to contribute with the balance to complete the total project budget (starting at 50% to pilot, replicate or scale up the business model (these are called “counterpart” resources). IDB Lab up to 50% + Applicant 50% or higher percentage = 100% Total Project Cost.

This 50% (or higher percentage) of “counterpart resources” could be half in cash and half in in-kind resources. Please note that for Contingency Recovery Investment Grant financing, counterpart funds to be provided by the Applicant are desirable, but not required, however counterpart funds will be positively considered for selection.

Note that written evidence of counterpart resources to implement the model (similar to a letter of interest or commitment) will be required upon applying.

11. Will IDB Lab fund the complete project if my proposal is selected for track 2?

IDB Lab may fund up to 50%-70% of the total project budget; therefore, Applicants must be prepared to contribute with the balance to complete the total project budget (starting at 30% to pilot, replicate or scale up the business model (these are called “counterpart” resources). IDB Lab up to 70% + Applicant 30% or higher percentage = 100% Total Project Cost.

This 30% (or higher percentage) of “counterpart resources” could be half in cash and half in in-kind resources. Exceptions of lower counterpart percentage have to be justified.

Note that written evidence of counterpart resources to implement the model (similar to a letter of interest or commitment) will be required upon applying.

12. What will the grant fund for track 2 (awareness creation, ecosystem building and inclusive governance framework?

If selected, the grant would pay for the deployment of the approved action plan for 18 to 30 months. This includes, when applicable, the development of the governance framework and its roll-out, including a phase of outreach for its adoption amongst the ecosystem.

13. If I have questions related to my submission, who can I contact?

You can email your questions to: IDBLab_tokenization@iadb.org before the final submission deadline. This mailbox will be open until the selected proposals are announced (September, 2022).

Please note that this mailbox is only for technical issues related to the Challenge.

14. In which language can I send the application?

This Challenge is bilingual, so feel free to send your application in English or in Spanish. Only the required attachments (proof of legal registration, by laws, and audit reports) can be submitted in English, Spanish, Portuguese, or French.

15. How do I submit my application?

The application must be completed and submitted online (YouNoodle platform) by August 12th, 2022 (midnight, Eastern Time, USA), please click here to apply.

Please note that you have to create a username and password.

16. Can I include attachments to support my application?

Applicants should upload the following documents:

1. Optional: Organizational presentation describing solution (10-15 slides max, 10 MB, in PDF format)

2. Optional: Any audiovisual material of maximum 2 minutes relevant to the proposal such as a video presentation in a URL format. 3. A 5 to 10 concept note and action plan.

4. Written evidence of counterpart resources, to implement the model (similar to a letter of interest or commitment).

5. Registration (this must be a legal document establishing the Applicant as registered or authorized by the government to do business. Organizations with temporary authorizations/licenses to operate in the country where the project will be implemented will not be accepted):

  • Applicant registered in the target country where the project will be implemented: copy of Applicant´s proof of legal constitution and incorporation under the laws of the target country where the project will be implemented.
  • If applicant is registered in one of the 22 IDB non-borrowing member countries and is not registered in any of the 26 member countries where the project will be implemented: copy of Applicant’s proof of legal constitution and incorporation under the laws of one of the 22 IDB non-borrowing member countries, plus a copy of a collaboration/joint venture agreement with an Applicant registered in the target country where the project will be implemented.
  • Copy of the Applicant’s bylaws and other documents on its corporate governance.
  • For non-reinbursable technical cooperation and prototype: copies of Applicant's latest annual financial statements for the last 2-3 years, of which the last one has been prepared by an external auditing firm (for technical cooperation).
  • For contingent recovery investment grant: copies of the Applicant’s latest annual financial statements for the last 2-3 years, prepared by an external auditing firm. Companies that do not have externally audited financial statements will not be eligible for loan financing.

Documentation can be submitted in Portuguese, French, English or Spanish in PDF format. The IDB shall not be responsible if not able to open uploaded files.

17. Can other organizations support my counterpart financing requirements?

Yes. Applicants can leverage resources from a variety of sources including both national and international government agencies, NGOs, foundations and bilateral and multilateral entities. Coalitions are encouraged.

18. When will I know the outcome of my application?

Pre-selected Applicants (short-list) will be contacted by e-mail by August 2022. Selected Applicants will be officially notified by IDB Lab via email by September 2022.

19. Will I receive feedback on the content of my proposal after selected applications are selected?

The IDB does not provide individual feedback or comments on applications.

20. What information should I complete when submitting the online application?

Click here to see what information is required; however, remember to APPLY ONLINE.

21. What happens to the Intellectual Property of the work/model/solution if my proposal is selected?

The intellectual property is owned by the applicant at all times. If the applicant wishes to sign an NDA during for the submisal of the application, it can request it to IDB Lab by email to IDBLab_tokenization@iadb.org