The Nature Conservancy
The Nature Conservancy (TNC) is pioneering a new model for ocean conservation, with its Blue Bonds program. It works with island and coastal nations to restructure sovereign debt in exchange for the country’s commitment to protect approximately 30 percent of its marine areas. If successful, Blue Bonds could increase the amount of marine protected area in the world by 15 percent, while materially contributing to the economic sustainability of nations home to 43 million people.
Photo caption: When marine areas are protected, ecosystems recover, reversing decades worth of damage. / The Nature Conservancy
In March, TNC’s first debt conversion for ocean conservation project with the island nation of the Seychelles reached its goal of protecting 30 percent of the country’s ocean. Now, 410,000 square kilometers — an area larger than Germany — will be safeguarded to encourage sustainable development and enable adaption to the effects of climate change.
TNC received government endorsement for two projects in the Caribbean and Latin America region that would protect 30 percent of each country’s territorial sea and exclusive economic zone, and place 15 percent in high protection status. These projects include establishing conservation trust funds, stakeholder-driven marine spatial planning and restructuring national debt to fund conservation activities.
There are currently six additional projects under negotiation in the Caribbean, Latin America, Africa and the Eastern Indian Ocean, worth a total of more than $1 billion in conservation funding. These projects would protect an estimated 2.7 million square kilometers of ocean, and improve marine management for more than 9.2 million square kilometers.
New Partnerships For Bigger Impact
United Nations Development Programme (UNDP) - UNDP approached TNC to partner on the Blue Bonds for Conservation strategy in several countries with which they work.
Why it matters: UNDP has deep relationships with government decision-makers and a strong track record of stakeholder engagement, while TNC brings transaction and conservation expertise. Through this partnership, TNC has already identified a new country for their pipeline. This project could achieve new marine protection of more than 276,000 square kilometers of ocean, improved management of over 927,000 square kilometers and generate an estimated $120 million in funding for ocean conservation over 20 years.
US International Development Finance Corporation (DFC) - TNC is working with the DFC to develop a Master Contract, which provides a general structure of Political Risk Insurance coverage for all future DFC supported transactions.
Why it matters: Developing a Master Contract for all DFC-supported transactions will reduce the time it takes to negotiate country-specific policies. Since DFC is limited to working in countries on the World Bank International Development Association (IDA) list, TNC is engaging with regional development banks to explore alternative credit enhancement products that can support transactions in non-DFC countries.
“[Due to the pandemic] crucial sources of income for conservation efforts are at risk, and the damage to nature and the natural resources that people need stands to be profound and long-lasting. We’re working with partners and governments to explore how the Blue Bonds for Conservation model can help decision-makers diversify essential conservation funding sources and ensure a climate-resilient future.”