Victoria, Seychelles, October 19, 2021 – Seychelles’ innovative debt-for-nature swap was leading the keynote presentations at the Forum of the Standing Committee on Finance (SCF) of the United Nations Framework Convention on Climate Change. Patrick Payet, the Secretary of State in the Ministry of Finance, Economic Planning and Trade, made the virtual presentation introducing the new financing modality and sharing the challenges and opportunities associated with its pilot in Seychelles. The Forum is the latest platform where Seychelles showcased the debt-for-nature swap for ocean conservation – the first of its kind in the world.
The Forum provides a platform for a wide range of climate finance stakeholders, including governments, climate funds, financial institutions, civil society, think tanks, and the private sector, to exchange information, and promote linkages and coherence in the mobilization and delivery of climate finance.
Mr. Payet’s Keynote presentation on emerging trends and issues on nature-based solutions provided insight into Seychelles’ experience implementing the debt-for-nature swap in 2018. Mr. Payet shared the challenges stemming from the country’s classification as high income per capita small island state and how it hindered Seychelles’ efforts to secure favorable lending conditions. Innovative climate finance in the form of the debt-for-nature swap offered a solution. The debt swap takes a different approach to debt forgiveness, where a portion of the developing country’s foreign debt is exchanged for investments in domestic environmental conservation and sustainability projects.
Mr. Payet reminded the audience that the Seychelles archipelago is 3000 times more water than land, making the ocean a crucial asset for the country’s people and economy. Protecting Seychelles’ ocean is essential for the nation’s Blue Economy development focusing on economic diversification, jobs, food security, and sustaining the ecological integrity of the country’s marine environment.
In his speech, Mr. Payet offered the breakdown of the debt buy-back, which was accomplished through the partnership between The Nature Conservancy, the Government of Seychelles’ Government, and an array of private foundations. The central condition of repurposing US$21.6M of foreign debt was the designation of 30% of Seychelles’ ocean territory as an Exclusive Economic Zone and the disbursement of at least US$ 200,000 annually for 20 years towards domestic ocean conservation and climate adaptation programs.
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