The Republic of Ecuador, with support from the U.S. International Development Finance Corporation (DFC), the Inter-American Development Bank (IDB), The Nature Conservancy (TNC), and Bank of America, has finalized a debt conversion backed by $1 billion in political risk insurance from DFC. This initiative refinances approximately $1.53 billion of Ecuador’s international bonds, resulting in $800 million in net fiscal savings for the country by 2035. Additionally, it is expected to generate around $460 million to fund the Amazon Biocorridor Program over the next 17 years.
“Ecuador is a key U.S. ally and one of DFC’s largest markets worldwide,” said DFC CEO Scott Nathan. “Today’s announcement underscores DFC’s commitment to leveraging innovative financial tools to reduce sovereign debt, strengthen resilience to economic coercion, and raise money for biodiversity.”
The Amazon Biocorridor Program aims to conserve terrestrial and freshwater ecosystems in the Ecuadorian Amazon. It addresses biodiversity loss and climate change impacts such as rising temperatures and extreme weather events that affect human health and livelihoods.
The program is co-designed with Indigenous people and local communities to enhance biodiversity conservation, climate resilience, and community well-being. It will manage 4.6 million hectares of existing protected areas and protect an additional 1.8 million hectares of forests and wetlands.
“The Government of Ecuador reaffirms its commitment to conserving the Amazon region by implementing innovative financing mechanisms,” stated Juan Carlos Vega, Ecuador’s Minister of Economy and Finance.
Inés Manzano, Minister of Environment for Ecuador, emphasized that “the Amazon Biocorridor Program is not simply a strip of territory; it is a comprehensive management model that strategically addresses the major environmental challenges of our time.”
IDB President Ilan Goldfajn expressed support for this initiative: “We are happy to support Ecuador’s first-of-its-kind operation in the Amazon to scale up sustainable financing for environmental protection.”
Galo Medina from TNC highlighted that “this joint effort between the Ecuadorian government and TNC is a significant milestone for conservation in the Ecuadorian Amazon.”
Augusto Urmeneta from Bank of America noted that “our role in this transaction highlights the expanding interest and opportunity for private capital to invest in a new asset class focused on nature and biodiversity.”
Most funding from this debt conversion will be managed through grants by Fondo del Biocorredor Amazónico (Amazon Biocorridor Fund). The fund will adhere to international standards for transparency and accountability.
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