At least five African nations are collaborating on what could become the world’s first joint “debt-for-nature” swap, aiming to raise over $2 billion to protect a coral-rich region of the Indian Ocean, according to a global conservation organization.
Debt-for-nature swaps, a type of financial transaction in which a portion of a developing nation’s foreign debt is forgiven in exchange for local investments in environmental conservation measures, are gaining popularity among lower-income countries as a means to finance conservation efforts.
In 2023, Gabon became the first African nation to launch a debt-for-nature swap, securing up to $450 million. Similar deals have been executed by countries like Seychelles, Belize, Ecuador, and Barbados, where debt was refinanced in exchange for commitments to protect their marine environments.
However, the latest African initiative would be the first to involve multiple countries sharing a distinct ecosystem.
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, Reuters reported.
However, 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 initiative is supported by the U.S. and British governments and aims to protect and restore 2 million hectares of ocean ecosystems by 2030, which will benefit approximately 70 million people living in coastal communities. Sberna emphasized that such ambitious agreements are crucial for accelerating conservation efforts.
“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 needing up to 20% of their GDP to build resilience, Sberna emphasized that radical measures are essential.
“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.”
Sberna expressed hope that a blueprint for the deal could be established ahead of a U.N. Oceans Conference.
Key details, such as the amount of each country’s debt involved and who will decide and monitor the allocation of conservation funds, will require extensive negotiation.
To facilitate this process, the IUCN and other organizations are considering a specialist fund worth at least $2 billion, which would consist of $500 million in concessional funding and $1.5 billion from bond swaps.
Additionally, discussions are ongoing with major multilateral development banks in the region about providing credit guarantees and insurance policies to support the swap.
