Community Finance | March 31, 2020

Seychelle’s successful ‘debt-for-conservation’ deal paves the way for more blue bonds

Amy Cortese
ImpactAlpha Editor

Amy Cortese

Four years ago, the Seychelles government signed a groundbreaking deal with The Nature Conservancy to refinance sovereign debt at a discount in return for protecting 30% of its oceans, up from virtually none.

TNC raised grants and loans from foundations to pull off the $21.6 million deal. Last week, the Indian Ocean archipelago made good on its promise, announcing final details for Marine Protection Areas that will conserve  158,000 square miles of water and habitat while allowing low-impact economic activities, like tourism, to continue. 

Rising Tides: Debt-for-Nature Swaps Let Impact Investors Finance Climate Resilience  

TNC’s impact capital arm, Naturevest, is working with 20 island nations on similar deals to refinance their debt and use the savings for marine protection. It sees an opportunity to work with 85 nations on similar deals.

Naturevest’s Rob Weary told Responsible Investor that the firm could now get credit enhancement from the U.S. Development Finance Corporation, allowing it to raise money on the capital markets and scale up its blue bonds.