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Ecuador’s Commercial Debt-For-Nature Swap to benefit La Hermandad Marine Reserve

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Institution
Ecuador – Ministry of Economy and Finance
Published
Topic Area
Financing the green and resilient transition
Question
How can Ministries of Finance help finance investment in the green transition?
Citation

Ecuador—Ministry of Economy and Finance (2025) Ecuador’s Commercial Debt-For-Nature Swap to benefit La Hermandad Marine Reserve, Contribution to ‘Compendium of Practice from a Global Community of Ministries of Finance and Leading Organizations’, Coalition of Finance Ministers for Climate Action.

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In 2023, Ecuador carried out a debt-for-nature swap that safeguards La Hermandad (Brotherhood) Reserve of the Galapagos Islands and exchanges approximately US$1,630 million of existing debt for a new impact loan of US$656 million linked to conservation commitments.

Nearly US$450 million previously destined to service debt will be donated to the newly created Galápagos Life Fund by the issuer of the impact loan, GPS Blue, to finance projects in the Galapagos Islands that contribute to conservation.

Key Messages

  • The loan is backed by a political risk insurance policy from the Development Finance Corporation of the U.S. and a partial liquidity guarantee from the Inter-American Development Bank. Credit Suisse structured the transaction and global conservation experts helped develop the general structure of the transaction and supervise compliance with environmental and social commitments.
  • The Galápagos Life Fund (GLF) will oversee the approval of projects that will be financed with these resources through its board of directors. GLF is a private entity whose investments come from foundations and do not imply the use of public funds. The board is comprised of representatives of government, academia, and business associations, as well as international members from Oceans Finance Company (OFC), Ledunfly Philanthropy, and the NGO Pew Bertarelli Ocean Legacy.
  • GLF will be able to use the funds for projects designed to support and promote the maintenance, growth, and security of natural capital in the Galapagos Islands and their marine ecosystems. This could include reserve management and sustainable fishing, environmental education, sustainable tourism, and blue economy projects.
Keywords
climate financeconservationdebt-for-nature swapfinancial instruments