Ecuador has reached the “Deal of the Year on Financing Natural Resources” to promote a debt-for-nature swap that protects the Brotherhood Reserve in the Galapagos Islands, the Ministry of Economy and Finance reported this Tuesday, October 24. This international recognition was awarded by GFC Media Group, the premier investment banking and corporate finance events company for emerging and frontier markets.

The Ministry pointed out that this award highlights the most innovative and important financial agreements that the countries of Latin America and the Caribbean have promoted in the last year. The Minister of Economy and Finance, Pablo Arosemena, pointed out that “we managed to reduce the external debt by 1,000 million dollars, and 450 million dollars were allocated permanently for the protection of the Brotherhood reserve.”

Galapagos Life Fund defines its work to preserve the resources obtained from the debt exchange

On May 9, the government announced this exchange of approximately $1,630 million for new debt of $656 million. This operation implies the saving of more than 1,100 million dollars of the national debt that Ecuador maintains and the allocation in the next 18 and a half years of about 450 million dollars for conservation in the Galapagos Islands.

The Galapagos Life Fund will manage the resources allocated to meet the environmental and sustainability obligations set out in the nature conservation debt exchange achieved by the country.

Meanwhile, Arosemena added that this decision – the debt swap -, together with the renegotiation of the debt with China, was fundamental to achieve the reduction of Ecuador’s public debt from 61.5% of GDP (May 2021) to 54% of GDP- And. GDP (December 2023).

The receipt of this award will be officially announced at the Bonds, Loans & ESG Capital Markets Latin America & Caribbean Awards 2023 event on November 28 at the Ritz-Carlton Hotel in the city of Miami, United States. The event will be attended by representatives of international financial markets and the most prominent people from the industry.

Other Ecuador debt swaps

This is not the first time that Ecuador has swapped debt for nature. In 1987, Fundación Natura achieved the first debt swap for nature, in the amount of 10 million dollars. The money went to protect Ecuador’s natural areas.

The government assured that it has not relinquished control over sovereignty over the Galapagos Islands and explained the operation of the Galapagos Life Fund

Between 2005 and 2020, a debt swap with Spain was completed for $52 million (due to financial returns) of public investment for Ecuador for human talent, scientific strengthening, primary education in the first phase, reconstruction and equipping of hospitals that were affected. in the earthquake of 2016 and in the schools of the millennium. The debt exchange program began in March 2005. From 2007 to 2011, 22 projects were implemented, and from 2012 to 2016, investments were made, among others, in Millennium educational units.