on 11 May 2023
The new deal, organised by Credit Suisse and Pew Bertarelli Ocean Legacy Project, will secure funding for Galapagos conservation in perpetuity
On May 9, the Ecuadorian government announced a new debt conversion deal that will provide a sustainable source of funding for conservation of the famous Galapagos Islands.
The deal works by taking some of Ecuador’s bonds, which the country has struggled to repay, and sees them sold to a bank, in this case Credit Suisse, at reportedly 40 cents on the dollar. Credit Suisse then converted the funds into a $656 million Galápagos Marine Bond, according to the New York Times, in what is sometimes referred to as a “debt for nature” swap.
The Seychelles used a similar mechanism to help fund its marine conservation with so-called Blue Bonds.
The restructuring will reportedly save the Ecuadorian government about US$1 billion in bond repayments.
Ecuador received technical and financial support from the Pew Bertarelli Ocean Legacy Project, according to the Pew Research Report. The deal provides ensures enough money for conservation in the Galapagos in perpetuity through a long-term funding commitment by Ecuador, which includes creating an endowment to pay for future conservation.
Pew noted that it would take about 18 years for Ecuador to repay the new loan. In 2040, Ecuador’s repayments would end, with an endowment of $227 million to continue financing conservation activities “at the same level” in perpetuity.
Part of the deal is to encourage Ecuador’s fishing industry to achieve sustainability by reducing or eliminating harmful practices.
Earlier this year, the Ecuadorian government expanded the marine protected area around the Galapagos, while new coral reefs have been discovered. The Galapagos Islands are famed for their biodiversity since the arrival of Charles Darwin, who based his landmark work, The Origin of Species, on his travels to the islands in the 1830s.
The confluence of three major ocean currents brings an upwelling of cold, nutrient-rich water to the tropical Galápagos Islands, which are home to some 3,000 species including whales, dolphins, sharks, sea lions, rays, sea turtles, tuna, and tropical fish, as well as some of the world’s highest levels of distinct species found nowhere else on Earth.
The islands have been under threat from overfishing, including fishing fleets that sit just outside Ecuador’s maritime jurisdiction. The growing tourism trade has also become a threat, as the local town, Porto Ayora, has grown to accommodate rising visitor numbers. Superyacht tourism is also growing, as the Galapagos forms part of a tour that extends from Panama to the islands and on to the South Pacific.
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