The Bahamas has unlocked more than $120 million to fund the conservation and management of its oceans and mangroves with a debt swap financed by Standard Chartered and backed by the private sector, APA reports citing Reuters.
By spending $215.7 million to buy back Eurobonds and repurchasing an $81 million commercial bank loan using a lower-cost $300 million loan from Standard Chartered, the Bahamas is able to redeploy the interest and principle payment savings to fund wide-reaching ocean conversation projects.
So-called debt for nature swaps are emerging as an important tool to help countries achieve their conservation and climate goals and close the $942 billion nature finance gap BloombergNEF estimates is needed to restore and maintain biodiversity globally.
The swap comes after nations at a UN biodiversity summit in Colombia in October failed to devise a plan for how countries would reach the ambitious global goals for mobilizing billions of dollars for nature conservation. Rich nations signalled an unwillingness to pay more, instead looking for the private sector to fill the gap.
"The nature bonds programme is one of the few mechanisms that can drive financing at scale towards climate and nature in the global south," said Slav Gatchev, head of sustainable debt at The Nature Conservancy, which designed the deal and provides conservation support to the Bahamas.
The Bahamas' unique archipelago of low lying islands, coral islets and cays make it and the people who live there highly vulnerable to climate impacts. The country is still feeling the effects after Hurricane Dorian left widespread devastation in 2019.
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