This week it’s out with the theoretical and in with the practical examples of how governments, development finance institutions, and bankers are spurring finance for climate and conservation.
A debt-for-conservation deal in Ecuador finalized last week is the biggest transaction of its kind — by many orders of magnitude. The deal converted about $1.6 billion in existing commercial debt into a new $656 million loan.
Debt-for-nature swaps are transactions where a portion of debt is forgiven or refinanced in exchange for the local government investing in conservation or climate priorities. While there have been some 140 debt-for-nature swaps over the years, most are at a much smaller scale, with the average size in the $26 million range, says Giuseppe Di Carlo, director of Pew Bertarelli Ocean Legacy, which helped put together the transaction.