Gabon’s Debt-for-Nature Swap Deal

Gabon has publicly announced its participation in a debt-for-nature swap deal, which aims to both refinance national debt and bolster marine conservation efforts.

Overview

The Deal

• Amount: $500 million.
• Primary Purpose: Refinance Gabon’s debt and conserve marine resources.

Significance

• Gabon’s deal stands as the 2nd largest under the blue bond initiative, overshadowed only by Ecuador’s previous endeavor:
  • Ecuador exchanged bonds worth $1.6 billion for a new loan of $656 million, earmarked for ocean conservation.

Mechanics

• Debt-for-Nature Swaps:
  • Allows developing nations grappling with heavy debt to collaborate with financial institutions and developed countries.
  • Under these agreements, the participating nations commit to natural resource conservation.
  • Developed country banks acquire these debts and provide alternative loans that mature later and often carry reduced interest rates.
• Gabon’s Involvement:
  • Gabon’s debt was restructured under a Blue Bond.
  • Specifics:
    • US International Development Finance Corporation (USDFC) offered political risk insurance up to $500 million, reducing Gabon’s debt costs.
    • Gabon’s side of the deal includes annual contributions to an independent conservation fund and an endowment fund post bond repayment, anticipated to reach $163 million.
    • Gabon has vowed to provide $5 million annually for 15 years to marine conservation.
    • Utilization of the funds will encompass promoting conservation goals, safeguarding endangered species, and buttressing the sustainable “blue economy”. copyright©iasexpress.net

Key Stakeholders

• Gabon’s Collaboration Partners:
  • Bank of America.
  • US International Development Finance Corporation (USDFC).
  • The Nature Conservancy (TNC):
    • The deal’s amount, a total of $500 million, is directed towards marine conservation.
    • For TNC, this marks their fourth project under the “Blue Bonds for Ocean Conservation” strategy. Their prior collaborations were with Seychelles, Belize, and Barbados.

Background & Facts

• Gabon Bleu Initiative:
  • Launched in 2013.
  • Notable achievements include the expansion of marine protected zones.
  • Gabon, in 2014, became the inaugural central African country to take significant measures for marine resource protection by setting up a marine protected area network.
• February 2022 Data:
  • Gabon currently boasts 20 marine protected areas.
  • Marine conservation zones have expanded from less than 1% to 26%, covering a vast 51,955 square kilometers (approx. 26% of their ocean territory) as found by research from the University of Exeter.
  • Gabon’s ambitions don’t end here. They plan to elevate their marine protected regions from 26% to a commendable 30%.
• March 2023 High-Seas Treaty:
  • A global pact aiming to shield 30% of the world’s oceans and lands by 2030.
  • Under this agreement, Gabon is on track to:
    • Draft a thorough marine spatial strategy.
    • Designate 30% of its oceanic expanse as biodiversity protection zones.
    • Enhance the sustainable practices within its fishing industry. copyright©iasexpress.net