By: Staff Writer
November 26, 2024
The Bahamas is the newest country to enter into a “debt for nature swap,” as its Prime Minister, Philip Davis, hails the new “Bahamas Debt Conversion Project for Marine Conservation,” as choosing a pathway towards innovation and away from fear.
Davis, in remarks and the announcement of the Inter-American Development Bank backed initiative, said: “Friends, the challenges we face are vast, but so too is our capacity for ingenuity.
“In the face of mounting economic costs and the unyielding advance of climate change, The Bahamas has chosen not the path of despair, but the path of innovation.
“Today, we set forth on a bold new course—one that reimagines how nations like ours can finance resilience and conservation.
“The Bahamas Debt Conversion Project for Marine Conservation is more than a financial transaction; it is a declaration of intent, a testament to what can be achieved when creativity meets determination.
“With the support of the Inter-American Development Bank, The Nature Conservancy, Standard Chartered Bank, and a coalition of partners, we have crafted an initiative that transforms debt into opportunity, burden into benefit.”
The Bahamas government will buy back outstanding bonds with money financed from Standard Chartered Bank, which will be further backed by the IDB for money that will be used for marine conservation in the country over the next 15 years.
Davis also said: “This project allows us to refinance $300 million in external debt, generating an estimated $124 million in savings over 15 years. These savings are not abstract figures; they represent real investments in the future of our people and our planet.
“They will fund critical conservation efforts, strengthen the management of our marine protected areas, and safeguard the ecosystems that sustain us all.
“And we are thinking beyond the immediate. A $20 million endowment, set to grow by 2039, ensures that this work will continue long after the debt conversion project concludes.
“It is a commitment not just to today’s Bahamas, but to future generations who will inherit this nation and the responsibility to care for it.”
The IDB has backed similar transactions, most recently in Barbados where they, along with the Nature Conservancy, announced the completion of a $150 million debt conversion in 2022, that created long-term sustainable financing for marine conservation and secured a Barbados government commitment to protect up to 30 percent, or 55,000 square kilometers, of its exclusive economic zone (EEZ) and territorial sea.
The Barbados swap was intended to generate savings via cheaper debt for specific conservation or climate-related purposes, with a $150 million swap of their international bonds that generated $50 million for marine conservation.