LatinNews Daily - 10 May 2023

In brief: Ecuador secures world’s largest debt-for-nature swap

* Ecuador’s government has secured the world’s largest debt-for-nature swap, which has enabled Ecuador to convert US$1.62bn of international bonds into a US$656m bond linked to marine conservation in the Galápagos Islands. The new Galápagos Marine Bond will generate an estimated US$323m for marine conservation in the Galápagos over the next 18.5 years, according to the Swiss investment bank Credit Suisse, which arranged and structured the bond. These funds will also provide an endowment for a Galápagos Life Fund (GLF), which is intended to be a permanent source of funding for marine conservation projects beyond the term of the transaction. Credit Suisse predicted that the GLF would grow to more than US$227m by 2041, which combined with the debt conversion would generate over US$450m for marine conservation in the Galápagos Islands. Ecuador’s economy and finance minister, Pablo Arosemena, hailed the “immediate drop in Ecuador’s debt of approximately US$1bn… strengthening fiscal sustainability and environmental sustainability, and freeing resources for greater social investment”. Ramzi Isssa, Credit Suisse’s global head of credit investor products structuring, said that “Ecuador, alongside its partners, is innovating for conservation, capturing the power and potential of private capital to solve pressing issues facing the environment and society more broadly.”

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