Paris Club of creditors — an informal grouping of 20 industrialized nations — has struck a deal with the government of Seychelles to cancel $30 million of debt if the country launched a massive ocean conservation project. As per the agreement, more than 400,000 square kilometers of the Seychelles’ ocean will be designated as a no-fishing area, leaving fish, coral and rare turtles undisturbed and boosting populations.
The tiny island nation, which received an IMF bailout at the height of the world financial crisis in late 2008, topped the list of most indebted nations in 2013 with net debts of more than 150 percent of GDP. The Seychelles government has pledged to bring the country‘s public debt to 50 percent of GDP by 2018.
Seychelles ambassador to the UN, Ronnie Jumeau, told Climate Home:
The oceans are a carbon sink, and our forests are our coral reefs. No SID [small island developing state] has ever approached it this way before. It brings conservation and development together.
The Nature Conservancy, a U.S.-based environmental NGO which brokered the deal is calling it the first-ever debt restructuring for climate adaptation. Mark R. Tercek, President and CEO of The Nature Conservancy said:
This debt swap will have a big impact on climate adaptation and marine conservation in Seychelles.This innovative financing strategy, which could be replicated in island nations across the globe, provides an opportunity to protect island economies and help these nations become more resilient to the impacts of climate change.
The remote islands of the Seychelles, many of which are low-lying, are at risk from changing weather patterns, rising sea levels due to global warming, warmer oceans reducing fish stocks and increasing ocean acidity threatening vital coral reefs.
