Ecuador Seeks New Debt-for-Nature Swaps to Protect Amazon and Ocean

Ecuador, bolstered by its record-breaking Galapagos debt-for-nature swap, is exploring ambitious new deals focused on protecting the Amazon rainforest and expanding its groundbreaking Pacific Ocean conservation zone. Sources familiar with the matter disclosed details of these plans to Reuters for the first time.

While the government grapples with drug-fueled crime and secures a new IMF agreement, officials have collaborated with multilateral development banks and conservation groups to structure at least two potential swaps. One would protect the Amazon, a vital global ecosystem, while the other would fund Ecuador’s expansive Marine Protected Area along its entire Pacific coast. Given the complexity of these swaps, Ecuador will likely prioritize one initiative for now.

Ecuador’s high debt and status as a “megadiverse” country with severe deforestation make it a prime candidate for debt-for-nature swaps. These swaps involve restructuring debt at lower interest rates in exchange for commitments to conservation spending. Development banks often guarantee these deals, increasing investor confidence.

Sources indicate the new swaps may resemble the Galapagos deal, potentially refinancing around $1 billion of Ecuadorian debt and providing tens of millions annually for conservation. The Inter-American Development Bank (IDB) and the U.S. International Development Finance Corporation (DFC) could again guarantee the deals. Ecuador’s finance minister has publicly confirmed interest in pursuing more of these swaps.

The Nature Conservancy, instrumental in past swaps, may lead scoping work on the Amazon-linked deal. Re:wild, the group co-founded by Leonardo DiCaprio, could play a similar role for the ocean conservation initiative. This swap aligns with Ecuador’s unique Marine Protected Area, safeguarding vital habitats for whales, turtles, and countless other species.