The savings of more than $1,100 million in national debt that Ecuador maintains and the allocation over the next 18 and a half years of approximately $450 million for conservation in the Galapagos Islands are the results of the conservation debt swap process that has been completed. government of President Guillermo Lasso.

The Minister of the Economy, Pablo Arosemena, assured that with the process that is being completed, the country has achieved the largest replacement of conservation debt in the history of Ecuador and humanity.

“Current debt of approximately $1.63 billion was exchanged for new debt of $656 million. Simply put, it would be like buying $1 for $0.40. The savings from the debt point of view is close to 1000 million dollars. If we want to look at it from a debt service standpoint in paying amortization and interest over time, that savings exceeds $1.121 million. In addition, this is crucial, it is possible to set aside about 450 million dollars for conservation in the Galapagos.”explained Arosemena at a meeting held on Tuesday, May 9, at Carondelet Palace.

After 17 years, the debt swap program between Ecuador and Spain for 50 million dollars is ending

According to the Minister of Economy, with this action, Ecuador gains ecological sustainability, because more funds are allocated for conservation, and also fiscal sustainability, because it manages to reduce its debt. He affirmed that this means less debt and more conservation, and that it would free up resources over the next nearly 20 years, as a result of this fiscal strategy, to allocate to social assistance.

It was emphasized that to achieve this “historic transaction” there was inter-ministerial work in Ecuador, the vision and decision of President Lasso and the support of major allies, including the United States Government, the US agency DFC and the Inter-American Development Bank (IDB).

As it was an exchange, there was no flow of funds for the purchase of bonds: international bonds were received for 1630 million dollars (the buyer delivered them to the country) and they were written off, and in exchange for new debt for 656 million dollars was provided, it was explained from Ministry of Economy.

Regarding the conservation debt swap, the United States ambassador to Ecuador, Michael Fitzpatrick, said his country was pleased to be part of this “critical association” of Ecuador, the IDB and the private sector to invest in the conservation of the Galapagos Islands and promote significant reductions national debt of Ecuador.

“The benefits of this agreement are historic and long-lasting, both financially and environmentally. (…) This project is not only important for the islands, but also for the people of Ecuador. Thanks to this transaction, the country will immediately reduce its debt burden by more than 970 million dollars, and over time will realize more than 1 billion dollars in savings thanks to reduced debt servicing costs by 2035.. And the endowment created by this exchange will be a permanent source of funding, beyond the transaction period,” Ambassador Fitzpatrick stated.

A proposal to exchange Ecuador’s foreign debt to expand the Galapagos Marine Reserve would be made with a public-private alliance and trust

Gustavo Manrique, Minister of Foreign Affairs and Human Mobility, pointed out that with the transaction reached, Ecuador will be able to “forever protect” 198,000 square kilometers of ocean and natural wealth and heritage of humanity located in the Galapagos Islands.

For Minister Manrique, five factors influenced the realization of this exchange: the support of academic knowledge, collaborative work, consensus among different local sectors, the existence of financial resources for conservation and the leadership of President Lasso.

The Government defines that this is more than a financial solution, an opportunity that the international community has joined in order to protect the marine reserve of the Galapagos Islands.