Ecuador Seals Record Debt-For-Nature Swap With Galapagos Bond

The debt-for-nature swap by Ecuador to conserve the Galapagos Islands is the largest of its kind, with the issuance of a $656 million "Galapagos Bond" until 2041. Investors who bought the bond received a 5.645% interest rate, with an $85 million credit guarantee from the Inter-American Development Bank and $656 million of political risk insurance from the U.S. International Development Finance Corp (DFC), making it less risky. This deal cut Ecuador's debt by over $1 billion, with at least $12 million a year going to the conservation of the Galapagos Islands, a valuable and unique ecosystem that inspired Charles Darwin's Theory of Evolution.

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Photo Credit: Jakob Owens