Explainer: How a conservation finance loan is making the Stage 2 expansion of Wirey Swamp possible

When we announced the Stage Two expansion of the Wirey Swamp Restoration Reserve last month, you might have picked up on the fact that NGT has had to temporarily take out a loan to support the project, and that this second parcel of land won’t officially become part of NGT’s newest permanent reserve until the debt is eliminated. If you are interested to learn more about how all of this works, why we have taken out a loan and how this relates to the land purchase fundraiser, then please read on…

Background

When we settled the purchase of Stage One last year, we also had the opportunity to purchase the Stage Two area, which is situated almost next door and contains a further two wetlands (plus an important area of remnant woodland) – allowing us to create a larger and more viable network of restored habitats. However, with an already significant target in place for securing Stage One ahead of settlement, we made the early decision to split the land purchase fundraiser into two components, to scale and stage the whole concept (of protecting and restoring all three wetlands across both parcels of land) in a way that would make it feasible for us to tackle.

So while we were publicly promoting Stage One this time last year, we were also privately working through finalising the financial formula and funding arrangements that would allow us to also commit to Stage Two.

How do NGO’s secure land purchases for conservation?

Because of how funds are raised, and the time involved in doing so, any conservation organisation involved in land purchases has to contend with the complexity of how to ‘make the stars align’ between two key variables that never usually perfectly coincide – (1) the timing of the opportunity, and (2) the availability of funding. This is especially the case when land is listed for sale on the open market, and other interested private parties do not ordinarily face the difficult funding and timing constraints of an NGO.

Alternatively, a much better scenario for an NGO is when a land purchase can be negotiated privately with the owner, where more flexible timing (and having a known time horizon) provides the ability to go away and do the work required to develop and implement a fundraising strategy.

For one successful NGT example, this was most certainly the case for Mt Burr Swamp, where the Ellison family very generously and patiently waited four years for us to come up with a funding formula that would allow the purchase to proceed. So while the foundation for success was first laid in 2012 when our discussions with the Ellisons began, the purchase didn’t become viable until 2016, at which time we were able to share our vision for the site publicly.

So when an ideal opportunity arises and there is simply no way to assemble or raise the funds in the time available, what can an NGO do?

Some organisations might have accumulated a strategic reserve of funds that allows them to pay for a land purchase up front, while others might rely on a generous supporter temporarily loaning the organisation the funds necessary to cover the cost. In both of these scenarios, these funds need to be fully recovered / repaid after public fundraising occurs – because wider fundraising also can’t generally occur until you have a sound proposal in place, a willingness to share the concept publicly, and high confidence it will go ahead.

While NGT doesn’t currently have access to either of the two options outlined above, you can see how securing land for conservation is a delicate balancing act for any NGO, which is never a simple or easy task!

An alternative fundraising approach adopted by NGT

For Stage One of Wirey Swamp, NGT was able to secure the right to purchase the land under a contract with a long settlement period, after paying a deposit, which we have also done before; e.g. in 2023, for Stage 3 of Walker Swamp. In both cases, the long settlement period provided us the time we needed to seek pubic support to raise the balance of funds required ahead of settlement. As regular readers will know, thanks to the support of so many people, the conclusion of the Stage One fundraiser last year was a huge success.

However for Stage Two of Wirey Swamp, NGT had to come up with an alternative approach because there was not enough time to raise the additional funds required ahead of settlement. This is the reason and motivation for talking with the Impact Lending team at Bank Australia.

Fortunately for us, not only is Impact Lending a specialty for Bank Australia, but they also happen to be our day-to-day financial institution, noting that I opened NGT’s first accounts with them in late 2011 (back when they were called bankmecu), ahead of our launch, when we started NGT with literally $0 in the bank!

In case you are wondering, we made the choice of Bank Australia, because I was aware that they were involved in protecting and restoring land for biodiversity in western Victoria, via their Conservation Reserve in the Wimmera. In some nice symmetry worth sharing in this story, we have also now been involved in assisting Greening Australia, their nominated Reserve Manager, with NGT delivering periodic biodiversity surveys of the Bank Australia reserves (see 2018 update here, and 2023 update here).

Thanks to a number of good people at Bank Australia who I worked with over several months, we were able to get everything in place to temporarily cover the cost of securing Stage Two, via NGT setting up an Impact Finance loan. The progressive balance that we will share over the coming months as we aim to eliminate this loan by the end of the financial year (see example from end of February below), is literally a screenshot taken when I log into the NGT bank accounts on-line.

We’ve chosen to share this story and be transparent about the loan, to give our partners and supporters a clear appreciation and understanding of the challenges involved in securing land for restoration, and how we look to overcome these obstacles in pursuit of our mission to restore nature.

Bank Australia understand and support our objective of now paying off the loan as quickly as possible, saving NGT interest (but costing the bank potential revenue), because that is precisely the point of this type of temporary loan. Obviously while the loan is making the environmental outcomes of Stage Two possible, equally we can’t allow the debt to burden NGT’s finances or operations going forward – which is why we’re hoping to clear the debt this financial year. The flow-on effect of this financial reality, is that NGT is also unable to formally include Stage 2 within the Wirey Swamp Restoration Reserve, until the loan is repaid.

Overall, we hope you’ll agree that it is fantastic to see what can be achieved for environmental benefit, when the banking system becomes a force for good, while still working carefully within its operating rules.

How can you get involved?

If you are in a position to help us reduce the size of the temporary loan, as we work towards paying it off ASAP, saving NGT interest and allowing us to fully focus on upcoming restoration activities at the site, we’d be very grateful for your support.

Full details about the project are outlined in this separate update, which also includes this fantastic video created by one of NGT’s very own ecologists, Lauren Creasey, which you can also view below.

There will also be future opportunities for community involvement in the restoration, monitoring and management of the site, as well as educational activities. If you wish to register your interest, please email Lisa at:

To make a donation towards the expansion of the Wirey Swamp Restoration Reserve, please click this link or the button below. All donations over $2 are fully tax-deductible.

The creation and expansion of the Wirey Swamp Restoration Reserve is an initiative of Nature Glenelg Trust.

Stage Two is being made possible by NGT’s community of supporters,
and a temporary conservation finance loan arranged with the Impact Lending Team at Bank Australia.