Barbados has struck a deal that will leverage $50 million in funding to help protect the nation’s marine ecosystems, support communities and sustainably develop its blue economy.
Facilitated by The Nature Conservancy (TNC), Blue Bonds for Ocean Conservation are essentially the refinancing of sovereign debt at a lower interest rate. The Barbados deal—crafted by the Government of Barbados, TNC and the InterAmerican Development Bank, with Credit Suisse and CIBC First Caribbean Bank as joint arrangers of the new financing—is efficient and scalable to other countries with emerging market economies and extensive marine assets.
Prime Minister the Honourable Mia Amor Mottley said:
“I have made it abundantly clear that while we pray, prayer and hope are not strategies to combat this climate crisis... This Blue Bonds project is a bold step towards protecting and securing our marine environment that is critical to our continued survival as a people.”
So how does it work?
TNC works with a country to refinance a portion of their national debt in a way that reduces their debt burden, secures funding for conservation activities, and enables valuable returns in planning and protection to improve resilience of economies and communities. The debt restructuring creates new financial flows that support governments to reach their protection targets for their ocean areas, including for coral reefs, mangroves and other important habitats, and engage in ongoing conservation work such as improving fisheries management and addressing climate change adaptation. To do this, TNC uses credit enhancement and commercial capital often leading to a reduction in debt outstanding, lower interest rates and/or longer repayment periods.
Read more in this informative article from The Nature Conservancy: