Chubb announced the Galapagos Marine Bond, its support for the world’s largest marine conservation debt swap, which includes a partnership with the Government of Ecuador and the US International Development Finance Corporation (DFC). , Inter-American Development Bank (IDB), Credit Suisse, Oceans Finance Company and Pew Bertarelli Ocean Legacy.
The government announces a debt swap for the preservation of the Galapagos Islands, which would save Ecuador more than 1,100 million dollars
Through its subsidiary Sovereign Risk Insurance Limited and Chubb Global Markets, the company’s wholesale and specialty markets division in London, along with other private insurers, delivered more than $390 million of reinsurance to DFC in an innovative insurance transaction risk policy designed to help Ecuador reduce external government debt, finance marine conservation and make annual payments to the Galapagos Life Fund (GLF).
DFC is covering $656 million in political risk insurance for the loan, while the IDB is providing an $85 million guarantee. Chubb, along with other private insurers, is providing 60% of the reinsurance to facilitate the project. This debt swap will save Ecuador more than $1.12 billion thanks to the reduction in debt servicing costs.
With this loan, Ecuador was able to buy back and cancel a significant part of its foreign trade debt, create a significant annual cash flow for marine conservation, and establish a fund for donations to the Galapagos Life Fund, to finance marine conservation for future generations. .
This transaction represents the largest marine conservation-focused nature debt restructuring to date and is the second marine conservation debt swap completed by DFC.
The Galapagos Life Fund will be a corporation that manages debt-for-nature resources that will serve to protect the archipelago
“Private Political Risk Insurance Market is pleased to support DFC in this very important Galapagos Marine Bond transaction,” said Julian M. Edwards, Global Head, Political Risk and Credit, Chubb Global Markets.
Natalie Chiaramonte, Chair of Government Risk Insurance, added: “This is an excellent example of a public-private partnership that continues to deliver debt reduction and significant marine conservation commitments. Not only are we helping make a major conservation project possible, but we’re also supporting sustainable economic development and community resilience through debt relief.”
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