Marine conservation to protect the Galápagos

In partnership with the Government of Ecuador, the U.S. International Development Finance Corporation (DFC), Inter-American Development Bank (IDB), Credit Suisse, Oceans Finance Company (OFC), and the Pew Bertarelli Ocean Legacy announced the financial close of a $656 million Galápagos marine conservation-linked bond (Galápagos Marine Bond), arranged and structured by Credit Suisse. The Galápagos Marine Bond was used to finance a debt conversion for Ecuador exchanging $1.628 billion of Ecuador’s international bonds for an $656 million loan (the Loan). Credit Suisse acted as offeror for the international bonds.

DFC is providing $656 million in political risk insurance for the Loan, while IDB is providing an $85 million guarantee. A group of 11 private insurers including Swiss Re provide more than fifty percent reinsurance to facilitate the project. Through this debt conversion, Ecuador will realize more than $1.126 billion lifetime savings through reduced debt service costs.

The debt conversion will generate an estimated $323 million for marine conservation in the Galápagos Islands over the next 18.5 years, including approximately $12.05 million of new funding annually and around $5.41 million annually, on average, to capitalize an endowment for the Galapagos Life Fund (GLF). The endowment, which will be a source of permanent funding for the GLF to continue supporting marine conservation projects beyond the term of the transaction, is estimated to grow to more than $227 million by 2041. Combined, the debt conversion and endowment will generate more than $450 million for marine conservation in the Galápagos Islands.

The GLF is a non-profit organization that was established to direct the marine conservation funding to the Galápagos National Park Service and to efforts to manage, monitor, and enforce marine protections for the waters surrounding the Galápagos Islands. The funds will also support Ecuador-based organizations to conduct research, advance sustainable fisheries, strengthen climate resilience, and develop a sustainable blue economy for the local community.

Link to full US DFC press release on swissre.com.