Puerto Rico’s San Juan (AP) In order to free up over $120 million for climate change mitigation and marine conservation programs, the Bahamas announced on Friday that it would refinance $300 million of its external debt.
The Bahamian government signed the agreement with The Nature Conservancy, the Inter-American Development Bank, and other financial partners, making it the fifth debt-for-nature swap in history.
“We envision this project not only bolstering the nation’s biodiversity and climate goals, but ultimately the economy and livelihoods of countless people,” Shenique Albury-Smith, deputy director of The Nature Conservancy’s Bahamas office, told The Associated Press.
As part of the agreement, the current debt will be repaid through a new loan with lower interest rates, which should free up about $124 million in funding. For the following 15 years, such funds will be allocated to marine conservation initiatives. In order to obtain funding for the projects after the 15 years are up, an endowment fund will also be established. The Bahamas’ total amount of external debt is approximately $5.7 billion.
According to Melissa Garvey, worldwide director for The Nature Conservancy’s bond program, similar agreements have already been inked by the Seychelles, Belize, Gabon, and Barbados.
According to her, the agreements together safeguard conservation regions that surpass the size of the Gulf of Mexico.
For the first time, a private insurer offers credit insurance and a private investor offers a co-guarantee under the arrangement with the Bahamian government. The Nature Conservancy claims that this is the first time that the initiative included pledges to mitigate climate change.
According to Smith, some of the funds will probably be used by officials to manage, repair, and preserve the mangrove environment, which is better than tropical forests in storing the greenhouse pollutant carbon dioxide. Seagrass is one of the other habitats that officials are trying to save because it absorbs carbon dioxide and helps combat global warming.
The security of the Bahamas’ commercially significant fisheries, like the spiny lobster industry, which brings in about $100 million annually, would also be guaranteed by protecting maritime areas, according to Albury-Smith.
Over 17% of the Bahamas’ coastal waters, or more than 6 million hectares (16 million acres) of the world’s ocean, are already protected, demonstrating the country’s long history of conservation.
At Exuma Cays, the Bahamas created the first protected land and sea park in history in 1958.
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