Behind the scenes of the Seychelles debt-for-nature deal

Last year’s deal between the Seychelles government and The Nature Conservancy’s NatureVest unit was touted as a game changer for climate finance (see, “Debt-for-Nature Swaps Let Impact Investors Finance Climate Resilience”).

Behind the scenes, philanthropic grants helped convince the Seychelles to do the deal—and could be the key to engineering future deals for overburdened, climate-vulnerable countries.

A new case study from Convergence, the blended-finance matchmaker, found that $5 million in grants from the Leonardo DiCaprio Foundation, China Global Conservation Fund, and others enabled the Seychelles to raise their commitment to marine conservation.

NatureVest helped the Seychelles restructure $21.6 million in sovereign debt. In turn, the Seychelles agreed to a large marine protected area in the West Indian Ocean and created a permanent fund for climate adaptation efforts.

There are at least 15 other small island countries with high debt loads that are vulnerable to climate change.

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Photo credit: Visualitineraries.com

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