- $460M for conservation: Ecuador unlocks $460 million to protect 6.4M hectares of Amazonian forests, wetlands, and 18,000 km of rivers.
- Debt reduction: The deal reduces Ecuador’s debt stock by $527M and generates $800M in fiscal savings by 2035.
- Innovative financing: Supported by TNC, DFC, IDB, and Bank of America, the swap leverages political risk insurance and new bonds for conservation funding.
The News:
Ecuador has completed a $1.5 billion debt-for-nature swap to fund the Amazon Biocorridor Program, unlocking $460 million for conservation efforts over the next 17 years. This is Ecuador’s largest debt conversion to date and a global milestone for terrestrial and freshwater ecosystem protection.
How It Works:
- Ecuador refinanced $1.53 billion of sovereign bonds, reducing its debt burden and freeing up $800 million in savings by 2035.
- Annual funding of $23.5 million will flow into conservation:
- $19M/year for Amazon Biocorridor Program initiatives.
- $4.5M/year to a conservation endowment, projected to reach $137M by 2041.
The Amazon Biocorridor Program:
The program aims to:
- Improve management of 4.6M hectares of protected areas.
- Protect an additional 1.8M hectares of forests, wetlands, and 18,000 km of rivers.
- Boost climate resilience and support local communities’ well-being.
Related Article: Bahamas Unlocks $124 Million for Ocean Protection via Debt Swap
“Through innovative financing, this program places the Amazon at the center of a transformative vision to protect one of the most biodiverse ecosystems on the planet,” said Inés Manzano, Ecuador’s Minister of Environment.
Financial Innovation:
- Bank of America arranged a new $1B bond with political risk insurance from DFC and a $155M liquidity guarantee from IDB.
- The deal prioritizes retiring discounted bonds to maximize savings.
“This is refinancing done right,” noted research firm Tellimer.
Global Collaboration:
The Nature Conservancy’s Nature Bonds Program, alongside partners like DFC and IDB, facilitated the transaction. TNC’s Galo Medina called the deal a “significant milestone for conservation”, showcasing the power of financing and government leadership to drive environmental and economic outcomes.
What’s Next:
The funds will be managed by the independent Amazon Biocorridor Fund, which will focus on transparent, community-driven conservation initiatives. Indigenous groups and local communities will play a key role in implementing the program.
This groundbreaking debt-for-nature swap exemplifies how countries can tackle debt, conserve biodiversity, and bolster climate resilience simultaneously.
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