VICTORIA, Seychelles — The debt-for-nature swap model pioneered by Seychelles in 2015 is being replicated by an increasing number of countries, according to a review published in Smart Water Magazine. The approach, in which heavily indebted nations restructure obligations in exchange for conservation commitments, has unlocked tens of millions of dollars for marine and climate projects worldwide.
Belize followed the Seychelles lead in 2021, securing $200 million in debt relief by retiring a $533 million bond and committing $23 million to marine conservation, protecting the second-largest coral reef in the world. Barbados joined the list in 2022 with a $150 million conversion that unlocked $50 million for ocean protection, while Ecuador concluded a $1.6 billion debt buy-back in 2023 tied to conservation of the Galapagos Islands. Gabon completed its first swap last year, focused on endangered species protection including the leatherback turtle.
Joan Prats, a principal financial specialist at the Inter-American Development Bank, has been instrumental in many of the deals. He noted that interest is growing, especially in Latin America and the Caribbean. Prats added that swaps require a clear development programme and conditions in which the guarantee can generate sufficient savings. Seychelles itself raised $21.6 million in 2015 through the mechanism, then added a further $15 million through a 2018 blue bond.
The trend holds particular relevance for small island developing states with limited fiscal space and high climate vulnerability. Officials in Victoria have positioned the country as the original laboratory for the instrument, and the growing list of imitators suggests the model is now firmly established in the toolkit of sovereign debt restructuring.
