Maldives Announces Debt-for-Nature Swap Initiative

The Bahamas has initiated a $300 million debt-for-nature swap, allocating $120 million towards marine conservation projects in partnership with organizations like The Nature Conservancy and the Inter-American Development Bank. This effort, part of a growing trend, aims to enhance biodiversity and climate goals while supporting the local economy and ecosystem recovery post-Hurricane Dorian. In parallel, the Maldives is embarking on a similar initiative, seeking to preserve coral reefs, mangroves, and seagrass by exchanging existing debt for cheaper loans as part of efforts to avoid a potential default on its Islamic sovereign debt. Environment Minister Thoriq Ibrahim emphasized the need to evaluate the value of natural assets, with agreements already signed with The Nature Conservancy to facilitate the process. Both countries are leveraging these swaps as innovative financial solutions to address environmental challenges, reflecting a broader movement among debt-laden nations towards sustainable financing.