On May 9th 2023, Ecuador’s government successfully completed the Galapagos Debt for Nature swap, repurchasing USD 1.6 billion worth of Ecuador’s outstanding bonds at approximately 40 cents on the dollar. The operation will save Ecuador USD 1.1 billion in debt service repayments over the next 17 years, with USD 450 million invested in conservation and sustainable activities. Conservation investment will benefit the Galapagos National Park, the Galapagos Marine Reserve, and the new Hermandad Marine Reserve, which together total 198,000 square marine kilometres.
The Global Green Growth Institute (GGGI), with funding from the Latin American Development Bank (CAF), acted as a trusted advisory to the Ministry of Economy and Finance throughout the transaction by providing technical and financial advisory. “This is a significant milestone for Ecuador’s efforts to promote sustainable development and environmental conservation,” said Dr. Frank Rijsberman, Director-General of GGGI. “GGGI is proud to have contributed to this important initiative, and we remain committed to providing innovative and effective solutions to global sustainability challenges. We look forward to continuing our work with the Government of Ecuador on this and other important initiatives.”
GGGI’s financial and technical advice included advice on the structure the debt swap transaction in compliance with Ecuador’s regulations and policies; design Ecuador’s Sovereign Green Bond Framework and secure its positive Second Party Opinion; coordination on the negotiation and formalization of conservation commitments and the establishment of the Galapagos Life Fund; securing third-party credit enhancement by developing policies, regulations and frameworks required by third-party guarantors; and build the technical capacity of government officials from the Ministry of Environment and the Ministry of Finance and Economy on debt for nature swaps and other sustainable financial instruments key to the transaction under the framework of Ecuador.
The Galapagos debt for nature swap highlights the importance of environmental conservation and sustainable economic growth. GGGI is committed to providing innovative solutions to global sustainability challenges.