By Alexandra Valencia
QUITO (Reuters) – Conservation projects in the Galapagos Islands funded by so-called blue bonds will be approved from next year by an independent body, Ecuador’s Environment Minister Jose Davalos said.
The country last month sealed a record $1.1 billion through a debt-for-nature swap to protect the unique islands, sparking a clamor among other nature-rich but cash-poor countries eager to follow suit.
The independent non-profit Galapagos Life Fund (GLF) will manage the funds, Davalos told Reuters on Thursday.
“Next year the GLF could begin to receive projects, rate them and assign the first funds to finance them,” Davalos said. “This is a private fund that will administer money that is given or donated for the conservation of the Galapagos.”
The GLF has 11 members, five from the government and the remainder from the private sector, and will meet for the second time on Friday in the Galapagos, which inspired Charles Darwin’s Theory of Evolution.
The fund could finance projects in fishing, tourism, environmental education and the management of the Galapagos ocean reserve, which was expanded last year.
“There will be monitoring of the execution of the projects and the fund must be submitted to audits by independent third parties that can guarantee that we are complying with the objectives,” Davalos said.
Resources could also be used for a $200 million fund that will ensure the long-term conservation of the Galapagos after other resources are spent, the minister added.
“We want a perpetuity fund, that will be forever,” Davalos said, adding a change in government will not affect the plans.
At their simplest, debt-for-nature swaps involve a country’s government bonds or loans being bought by a bank or investor and replaced with cheaper ones, usually with the help of a multilateral development bank “credit guarantee”.
As those guarantees protect buyers of the new bonds if the country isn’t able to pay the money back, the interest rate is lower, allowing the government involved to spend the savings on conservation.
Ecuadoreans will go to the polls on August 20 to elect a successor to President Guillermo Lasso, who cut short his own mandate amid an effort by lawmakers to remove him from office.
(Reporting by Alexandra Valencia; Writing by Julia Symmes Cobb;Editing by Elaine Hardcastle)
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