A new £10 million fund will provide grants of up to £100,000 to farmers and landowners undertaking projects to tackle climate change and restore habitats.
The Natural Environment Investment Readiness Fund aims to spur on nature projects in England to a point where they can attract private investment.
The Environment Agency said this would create a pipeline of projects for the private sector to invest in, and develop new funding models that could be replicated elsewhere.
Examples of projects that could be eligible for the fund include the creation of new woodlands and the restoration of peatlands.
The creation of new coastal wetlands could also be undertaken, as could the restoration of river catchments, the agency explained.
Defra Environment Minister Rebecca Pow said: "It is critical that this is alongside more private sector investment to protect and enhance our natural environment.
"Investors are rightly recognising environmental factors as key drivers of value. As we look to build back greener from the pandemic, I would encourage any interested businesses to bid for a portion of this fund."
The fund, which is being delivered by the Environment Agency on behalf of Defra, will help organisations get specialist advice and engage investors to develop their project to the stage when it is ready to receive and repay investment.
Projects need to be replicable and scalable, according to the EA, with key learnings made public to encourage similar approaches to access private sector finance for nature projects in future.
The fund will be open for applications until 26 March 2021.
