Ecuador announced on Tuesday that it has finalized a debt conversion that will channel $460 million toward conserving its Amazon rainforest over the next 17 years.
According to a statement, the US International Development Finance Corp., or DFC, will refinance $1.53 billion of Ecuador’s international bonds through a $1 billion political risk insurance.
The statement said this refinancing will pay off the South American nation’s old debt and generate $800 million in net fiscal savings by 2035.
It further added that the savings would support the newly established Amazon Biocorridor Program, an ambitious conservation effort to protect 6.4 million hectares of forests, wetlands, and rivers.
“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,” said Scott Nathan, DFC’s chief executive, in a press statement.
“DFC and the United States are proud to have enabled this debt conversion transaction to benefit the Amazon Biocorridor Program.”
A Dual Solution to Debt and Conservation
The debt conversion allows Ecuador to ease its debt burden while securing a sustainable revenue stream for conservation.
Of the $23.5 million in annual funding, $19 million will support conservation projects directly, while the remaining $4.5 million will contribute to an endowment projected to grow to $137 million by 2041.
Overall, these funds are expected to total approximately $460 million for conservation, making it the largest amount raised through any debt conversion to date.
“The Government of Ecuador reaffirms its commitment to conserving the Amazon region by implementing innovative financing mechanisms,” said Juan Carlos Vega, Ecuador’s minister of economy and finance. “This sustainable financing model exemplifies our leadership in addressing environmental and climate challenges for the benefit of current and future generations.”
Protecting People and Nature
The Amazon Biocorridor Program, co-designed with Indigenous communities and local stakeholders, aims to protect 4.6 million hectares of existing protected areas and create an additional 1.8 million hectares of newly conserved forests and wetlands.
The initiative will also protect 18,000 kilometers of rivers and strengthen the resilience of local communities that depend on the Amazon’s resources for food, water, and livelihoods.
“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,” said Inés Manzano, Ecuador’s Minister of Environment, Water, and Ecological Transition.
“This program places the Amazon at the center of a transformative vision that protects one of the most biodiverse ecosystems on the planet while ensuring long-term resilience for Ecuador and the world.”
Indigenous communities, whose territories span much of the Amazon, will play an essential role in the program’s design and implementation.
By incorporating Indigenous knowledge with scientific expertise, the initiative aims to promote ecological connectivity and strengthen social safeguards to protect cultural diversity and human well-being.
A Global Blueprint
This marks the fifth debt conversion backed by DFC’s political risk insurance, following transactions in Belize, Ecuador’s Galápagos Islands, Gabon and El Salvador.
It is also the first such transaction in the Amazon region, which environmentalists consider one of the world’s most critical ecosystems for combating climate change.
“This joint effort between the Ecuadorian government and The Nature Conservancy is a significant milestone for conservation in the Ecuadorian Amazon,” said Galo Medina, director of The Nature Conservancy’s Ecuador program.
“The Amazon Biocorridor Program will help protect one of the most biodiverse regions on the planet and ensure that conservation benefits reach the people who depend on these ecosystems.”
Bank of America played a key role in structuring the financial arrangement, highlighting the growing interest of private capital in biodiversity protection.
“This transaction demonstrates a model that can be replicated with other developing nations worldwide,” said Augusto Urmeneta, Bank of America’s president for Latin America.
A Sustainable Path Forward
Environmental groups and financial institutions have lauded the deal as a replicable model for other debt-strapped nations seeking to preserve natural resources.
With climate change and biodiversity loss posing global threats, Ecuador’s approach offers a rare example of fiscal relief aligning with environmental stewardship.
“The Amazon plays a key role in maintaining global environmental balance,” said Ilan Goldfajn, president of the Inter-American Development Bank, which supported the transaction. “This type of operation helps our countries advance biodiversity conservation and build resilience to climate change.”
Through the Amazon Biocorridor Program, the country’s forests, rivers, and communities may now have a more substantial chance to thrive — and perhaps set a precedent for other nations to follow.
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