Key points
- Western Indian Ocean countries looking at pioneering debt swap
- Hope is that plan can be readied by next June
- Focus is thousands of sq miles of threatened marine ecosystems
At least five African nations are exploring a pioneering joint “debt-for-nature” swap worth at least $2 billion, aimed at protecting a coral-rich area in the Indian Ocean, according to the International Union for the Conservation of Nature (IUCN). Debt-for-nature swaps allow poorer countries to trade high-interest debt for cheaper loans or bonds, with the savings redirected towards environmental conservation efforts.
Thomas Sberna, regional head for coastal and ocean resilience at the International Union for the Conservation of Nature (IUCN), did not name the five African nations considering the joint swap deal. But he said those backing the broader “Great Blue Wall” conservation plan include Kenya, Madagascar, Mauritius, Mozambique, Seychelles, Somalia, South Africa, Tanzania and the Comoros.
First announced in 2021, the plan is backed by the U.S. and British governments and aims to protect and restore 2 million hectares of ocean ecosystems by 2030, benefiting some 70 million people in coastal communities.
Sberna said such ambitious deals were important for speeding up conservation.
“If we want to really deliver a substantial impact in the next five years we cannot just continue issuing them one by one,” said Sberna, who is involved in the talks.
With many countries on the front lines of the climate crisis heavily indebted and requiring up to 20% of their GDP to build resilience, Sberna said radical measures were needed.
“We need to leapfrog from 1%- 2% of marine-protected or marine-conserved areas to 30% in less than 10 years,” Sberna said. “There is no way we could really achieve [that] using the same business as usual model.”
While similar deals have been implemented in countries like Ecuador and Barbados, this initiative would be the first to involve multiple nations sharing an ecosystem. Countries backing the broader “Great Blue Wall” initiative, which aims to restore 2 million hectares of ocean ecosystems by 2030, include Kenya, Madagascar, Mauritius, Mozambique, and Seychelles. The plan, supported by the U.S. and U.K., aims to benefit 70 million coastal residents and address biodiversity loss, climate resilience, and economic challenges.
Sberna said he hoped a blueprint for the deal could be agreed in time for a U.N. Oceans Conference next June.
Kenya, Tanzania and Mozambique have all lost significant portions of mangrove shoreline, coral reefs and fish stock since the 1980s, threatening loss of livelihoods, food security and income from tourism.
Key details such as how much of each country’s debt is brought up and who decides and monitors how and where the conservation money is spent, all require lengthy negotiation.
Sberna said that to aid this process, the IUCN and others were looking at the idea of a specialist fund worth at least $2 billion, made up of $500 million of concessional funding and $1.5 billion of bond swap money.
Sberna said discussions were also being held with some of the main multilateral development banks in the region about offering credit guarantees and insurance policies for the swap.
These are vital as they cut the interest rates countries have to pay on the new “blue” or “nature” bonds which replace their more costly existing debt.
Negotiations are underway, with critical details—such as debt restructuring and conservation fund management—still being discussed. The IUCN and partners are considering a $2 billion fund to back the swap, including $500 million in concessional funding. If successful, the deal would help these countries leap towards protecting 30% of their marine ecosystems, a central goal of global biodiversity agreements.
Source: Reuters
