NEW YORK (Reuters) – Ecuador has released at least $12 million a year to protect the Galapagos Islands’ unique ecosystem by signing the world’s largest “debt for nature” swap.
The first such agreement was signed in and around Bolivia in 1987. 140 It follows as low-income countries look to raise funds to tackle climate change and biodiversity loss.
Below are the previous deals and their structure.
Washington-based Conservation International and the private Frank Weeden Foundation are offering $650,000 of Bolivia’s foreign-held debt in exchange for government promises to set aside millions of acres of land in the Amazon Basin for conservation. purchased.
Citicorp Investment Bank, acting as agent for Conservation International, purchased debt from other secondary market New York Times lenders at discounted prices. report.
The bonds were purchased for $100,000, a discount of about 85 percent, and were funded by a Connecticut-based foundation, according to which Bolivia retains ownership of the area and a private firm with Conservation International as an advisor. It is said that it is managed together with the group.
After eight years of talks, the Seychelles were the first to join the negotiations. apply the principles To picturesque but fragile beaches and underwater coral reefs with the world’s first “blue” bonds.
In the deal, US-based charity The Nature Conservancy (TNC) has offered to buy nearly $22 million of the island nation’s $406 million debt.
The Seychelles has designated one-third of its sea area as ‘protected’. This means limiting fishing, oil exploration and large-scale development.
The United States and Belize originally agreed in 2001 to exchange tropical forest protection for debt relief.
In 2021, Belize will offer 55 cents on every dollar to holders of bonds worth $553 million. TNC We raised the money for the buyback and lent the money to Belize, which pledged to protect 30% of the world’s second-largest coral reef waters.
Credit Suisse underwrote a portion of the transaction, and the US Development Finance Corporation (DFC) guaranteed the loan. Belize said the deal had reduced its debt levels by an amount equivalent to more than 10% of his economic output.
TNC and the Inter-American Development Bank (IADB) provided $150 million. guarantee for a loan that would allow Barbados to buy back its debt. The savings were put to her $50 million conservation fund at an estimated value.
This has allowed Barbados to designate 30% of its marine environment for protection, an increase from near zero, according to TNC estimates, and improved management of all coastlines and water bodies.
Global asset manager Nuveen later said it had bought most of the debt sold in the form of blue bonds.
In its largest deal to date and one that took nearly three years to make, Ecuador has sold a blue bond that siphons at least $12 million annually to protect the ecologically rich Galapagos Islands.
Ahead of the new issuance, Credit Suisse purchased $1.6 billion worth of Ecuadorian bonds at a discount of nearly 60%, saving about $1 billion in repayments over 17 years.
The new bonds come with an IADB guarantee and $656 million of political risk insurance from the DFC.
The funds will help protect the islands, which are home to about 3,000 species, including species found nowhere else, from illegal fishing and climate change, said Pubertarelli Ocean Legacy Project, which backed the deal. .
More than $1 billion saved will be used for other purposes the government chooses.
Reported by Isla Binnie.Edited by Alexander Smith
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