Blue Bonds Debt Conversion Finalized
The Government of Belize and The Nature Conservancy today announced the finalization of its debt conversion agreement. The agreement will see hundreds of millions of dollars in savings and investments for marine conservancy in Belize. Announcements of the agreement being forged ahead of COP26 in Glasgow Scotland set the stage for Belize’s officials currently at the conference. As world leaders seek to accelerate their efforts towards the fight against climate change, Belize is standing out, a large part due to its conservation agreement with TNC. News Five’s Paul Lopez reports.
Paul Lopez, Reporting
It is getting Belize a lot of attention at COP26, in Glasgow, Scotland.
Kennedy Carrillo, CEO, Ministry of Blue Economy,
“I will tell you that really Belize is the blue golden child at COP 26, the blue golden child at COP 26. I think we need to realize that everybody wants to hear about what’s happening in Belize.”
Belize’s renewed commitment to protect its coasts and marine ecosystem is backed by the Blue Bond initiative, a financial debt relief program for marine conservation developed by The Nature Conservancy.
Jennifer Morris, CEO, The Nature Conservancy
“We as conservationist have thought for so long, look ecotourism is the best, it’s amazing, you’re preserving nature, you get people to come and be educated about nature. It is great until you have a global pandemic, then it’s not a great choice for your economic model, if that is all you have. So what we are seeing and trying to help in Belize is a model where we can take some of that debt burden and transition it into a conservation win.”
The Government of Belize and TNC today announced they have finalized the agreement. The transaction announced today restructures five hundred and fifty million dollars of Belize’s debt, leading to two hundred and fifty million US dollars in debt reduction, two hundred million US dollars in savings, and one hundred and eighty million US dollars in funding for conservation.
Prime Minister John Briceño
“We are paying them off at a substantial discount. By doing that we are having one of the first where a country is negotiating debt forgiveness but also getting funding for conservation.”
The agreement is backed up by six hundred million dollar political risk insurance from the DFC to that covers both the loan principal and interest. Both government and nongovernmental organizations in marine protection will be eligible to apply for funds through an established Conservation Fund for Belize.
Andre Perez, Minister of Blue Economy
“By recuperating and consolidating our natural spaces and ecosystems we can secure productive and sustainable fisheries, grow our nature based tourism sector, and strengthen our natural resilience to climate change.”
COP 26’s blue golden child lay the foundation ahead of the event through its Blue Bond efforts to attract further funding towards its national marine conservation efforts.
Prime Minister John Briceño
Little did I know, a year ago when we got elected that we would be working on something like this.”
– In collaboration with The Nature Conservancy (TNC), the Government of Belize, and Credit Suisse, U.S. International Development Finance Corporation (DFC) today announced the financial close of a $364 million Blue Bond for Ocean Conservation in Belize. The innovative debt conversion, which DFC made possible through $610 million in political risk insurance (covering loan principal and interest), will provide sovereign debt relief and simultaneously fund projects in support of Belize’s commitment to protect 30 percent of its ocean. These projects advance ocean protection, fisheries management, and climate adaptation and mitigation. DFC and The Nature Conservancy announced the financial close of the project on the margins of COP26 in Glasgow.
“DFC’s collaboration with TNC, the Government of Belize, and Credit Suisse represents one of the most innovative examples of climate finance and a model for the future,” said
David Marchick, DFC’s Chief Operating Officer.
“This transaction is a win-win-win: it reduces Belize's indebtedness, generates an estimated $180 million to invest in marine and biodiversity protection and promotes climate resilience in Belize's blue economy. Belize's marine ecosystem is one of the most unique in the world, and this transaction will help protect and preserve it for the future."
"The twin crises of the climate emergency and biodiversity loss require rethinking and redesigning the ways we invest in our economies and natural assets," said
Jennifer Morris, Chief Executive Officer at The Nature Conservancy
. "The Belize Blue Bond is a world-leading example of how a country can reduce its debt and create more fiscal space to dedicate substantial funds to its conservation ambitions. Belize is showing that when we work together, combining science, global finance and partnerships from the national to the community level, we can achieve enormous wins for people and nature.”
"Blue Bonds for Conservation is a singular opportunity for Belize to protect our unique marine resources and expand conservation programs while simultaneously reducing the public debt,” said
Prime Minister of Belize John Briceño
. “I thank our partners, in particular The Nature Conservancy and the U.S. International Development Finance Corporation, and share in their hope that this transaction will serve as a model to tackle the global emergencies of climate change and sovereign indebtedness."
DFC’s insurance enables Belize to repurchase $553 million sovereign debt at a discount. Through a combination of debt cancellation and debt repayment by the Government of Belize over time, the project will generate approximately $180 million for marine protection and management, coral reef and mangrove restoration, economic diversification, sustainable tourism and fisheries, and will promote the growth of the country’s blue economy. As part of the agreement, Belize agreed to double the percentage of its ocean attributed to Biodiversity Protection Zones, up from 15.9 percent to 30 percent.
This innovative DFC transaction both mobilizes capital and partners with the government of Belize to protect one of the world’s most unique and treasured marine areas. In the context of the climate crisis, this transaction is even more powerful – marine conservation efforts go hand in hand with climate change mitigation, adaptation, and resilience. The project will fund activities such as mangrove rehabilitation, which will build carbon removal capacity, helping to reduce the concentration of dangerous climate pollution in the atmosphere. TNC will also provide technical assistance by facilitating a science based participatory marine spatial planning process that includes local stakeholders such as fishing associations and tourism boards in the design of new marine protected areas.
The United States Government is committed to continuing its global leadership on forging innovative solutions that help countries balance economic growth with conservation and climate-friendly approaches.