- Ecuador has launched a debt-for-nature deal that will wipe out some $1 billion in interest payments in exchange for boosting its protection of the waters around the Galápagos Islands.
- Much of the funding will focus on managing the newly established Hermandad Marine Reserve, the existing Galápagos Marine Reserve, and sustainable fishing and climate resilience efforts.
- The deal would also finance an endowment to generate ongoing funding for marine conservation in the Galápagos Islands.
- This is the world’s largest debt-for-nature deal to date.
On May 9, Ecuador launched a plan that would effectively wipe out the interest on part of its debt in exchange for its protection of the Galápagos Islands, one of the most biodiverse marine regions in the world.
The strategy will allow Ecuador to convert $1.6 billion of its existing commercial debt into a $656 million loan issued as a bond by the global investment bank Credit Suisse. Over the course of 18 years, Ecuador would repay this new loan, and also provide about $18 million each year for the conservation of the waters surrounding the Galápagos Islands.
Much of the funding would be focused on managing the newly established Hermandad Reserve and the existing Galápagos Marine Reserve (GMR), as well as sustainable fishing and climate resilience efforts. The plan would also finance an endowment aimed to generate ongoing funding for marine conservation.
Such transactions, known as debt-for-nature deals, have been completed in at least 16 other countries, but Ecuador’s deal is the largest to date.
In addition to substantially supporting marine conservation efforts, the deal should save Ecuador about $1 billion in borrowing costs.
“The world’s biggest ocean-friendly debt swap is coming together in Ecuador to protect its unique natural resources,” Pablo Arosemena Marriott, Ecuador’s minister of economy and finance, said in a statement. “This strategy decreases public debt, boosts fiscal stability, and creates opportunities to address basic needs like healthcare and education.”
Jose Antonio Dávalos, Ecuador’s minister of the environment, water and ecological transition, said this debt-for-nature deal marks a turning point in the country’s environmental and economic development.
“Thanks to the commitment of the Government of Ecuador, conservation is not a topic related to one ministry only; it becomes a global, coordinated, and cooperative action of all of us who live on the blue planet,” Dávalos said in a statement.
The cold, nutrient-rich waters of the Galápagos Marine Reserve are known to host about 3,000 species, including whales, dolphins, sea turtles and tropical fish. The region also has one of the highest levels of endemism in the world.
In 1998, Ecuador established the Galápagos Marine Reserve to protect more than 133,000 square kilometers (51,400 square miles) of the waters around the islands, although activists and scientists campaigned for many years to expand this protection. Then, in 2022, President Guillermo Lasso announced the establishment of the Hermandad Marine Reserve, a 30,000-km2 (11,600-mi2) protected area. The new reserve expanded the Galápagos Marine Reserve and also protected a migratory corridor used by sharks, whales, manta rays and other species traveling between the Galápagos Islands and Cocos Island of Costa Rica
“The Ecuadorian people have a close bond with the ocean,” Gustavo Manrique Miranda, Ecuador’s minister of foreign affairs, said in a statement. “We understand its value and we treasure nature because of what it gives to our people and our economy.”
Banner image caption: A shark and schooling fish in the waters of the Galapagos Islands. Image by Greg Asner / Divephoto.org.
This story first appeared on Mongabay
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