Despite their modest land size, small island developing States (SIDS) are at the forefront of the global climate battle. Rising sea levels are biting off bits of precious land and encroach on coastal communities. Changes in water salinity and temperature damage marine ecosystems, destroying corals and reducing the population of fish. Yet, being dependent on expensive energy imports and servicing large external debts, many SIDS are struggling to make ends meet. Until recently, Seychelles was no exception: a country with high external debt, challenges of changing climate, and an expanse of 1.35 million km2 of the ocean that need to be sustainably managed. But in 2015, the Government of Seychelles saw an opportunity in a debt-for-nature swap for ocean conservation, a brand new, never tested financial instrument that promised to reduce the external debt and reinvest the payments back into the country’s ocean conservation and climate adaptation work. To many, it sounded too good to be true. Yet, five years on, we can take stock of the first outcomes.
A debt-for-nature swap is quite a clever thing. Under this financial mechanism, the Government, with the support of the Nature Conservancy (TNC), bought back US$ 21.6 million of its external debt from sovereign creditors at the Paris Club. In exchange for this opportunity to reduce the national debt, the Government of Seychelles promised to designate 30% of Seychelles’ waters as marine protected areas (MPAs). In 2015, when the deal was set, Seychelles had less than 1% of its aquatic territory as an MPA – the work ahead was monumental.
To start things moving, the Seychelles’ Government developed an ambitious plan that set the country’s long-term course on sustainable blue development. In 2015, Seychelles saw the formation of the Blue Economy Department, a policy body of the Ministry of Finance, and the establishment of the Blue Economy Research Institute within the University of Seychelles. Same year, the Seychelles’ Conservation and Climate Adaptation Trust (SeyCCAT), an independent, non-governmental, not-for-profit organization was established. But SeyCCAT was like no other institution in the country; Its value proposition was completely unique.
Originally created as a condition of the debt-for-nature swap, SeyCCAT was mandated to manage and disburse US$8.6 million to conservation and climate adaptation projects in Seychelles, while maintaining full independence and transparency. Over time, SeyCCAT’s reputation as an effective manager of grants grew. Seeing that SeyCCAT is a reliable partner, the government entrusted additional US$3 million to the organization as a Blue Grants Fund (BGF). This money was a part of US$15 million raised through the first-of-its kind Sovereign Blue Bond, issued by Seychelles in 2018. Combined, the proceeds of the debt-for-nature swap and the Blue Bond formed a total pot of US$ 11.6 million that is managed by SeyCCAT.
Ambassador Ronny Jumeau, the permanent representative of the Seychelles’ United Nations Mission, who was a crucial figure in the debt-for-nature swap, reflected back: “We knew we were charting new waters in international financing for marine conservation. Still, no one fully saw how trailblazing SeyCCAT would be.” This opinion is shared by many in the international community, especially those working on financial solutions for the global challenges of climate change.
What stands out
The Blue Grants Fund offers grants to businesses, non-profit organizations, and governmental agencies that come up with innovative projects that advance the national blue agenda. The sectors eligible for financing under the BGF include fisheries, marine research, marine conservation, aquaculture, and similar. Starting off as a modest pot of US$ 200,000 in 2016, the Blue Grants Fund grew more than 3.5 times in five years, reaching its funding goal of US$ 700,000 by 2018. Initially, the fund was accessed by established NGOs with significant experience in preparing strong project proposals. Today, however, the pool of successful applicants includes many young people and small-scale fishers without any prior experience in preparing applications. This shows that capacity building and hands-on training are an important factor for funds to reach the community. Overall, between 2017 and 2020, SeyCCAT disbursed more than SCR 15 million to 34 projects, where: 58% projects were led by women, SCR 8 million disbursed to youth-led projects or projects where youth are the main beneficiaries, and 23 projects supported small-scale fishers.
Another contributing factor to reaching the grassroots level is SeyCCAT’s take on inclusion and accessibility. For example, the BGF accepts applications not only in English but also in Kreole language. We also offer facilitation services, where a dedicated specialist will have a one-on-one session with a potential applicant to fill in the forms. This allows giving an opportunity to secure funds event to people without access to computers and the internet. With this approach, every year, SeyCCAT keeps beating its own record in the number of people applying for the funds. In 2020 alone, the Trust received 75 applications to the Blue Grants Fund with total requested funds of SCR 53 million, a number that grew from 15 applications in 2017.
Seeing the inclusive growth and the ability to reach deep within the community, the High-Level Panel on Sustainable Blue Economy presented SeyCCAT as a case study on how an organization can play a critical role in equitable and sustainable blue recovery from COVID-19.
What now
The Seychelles’ debt-for-nature swap was the first debt-for-nature swap for ocean conservation. Today, Seychelles is among few countries with a comprehensive marine spatial plan. In 2020, mere 6 years after the initial agreement, the country has also fulfilled its ambitious promise to designate 30% of its waters as marine protected areas. SeyCCAT’s priority is to ensure these MPAs have sustainable financing to ensure effective management of these areas.
The most recent large-scale undertaking supported by SeyCCAT is mapping of the blue carbon habitats, particularly seagrass, across the entire Exclusive Economic Zone of Seychelles. The maps produced by the project will help quantify the value of blue carbon, and later, these data will be used to update the Nationally Determined Contribution of Seychelles. Following that, SeyCCAT is keen to explore new innovative financing options for climate action.
Reflecting back on these five years, SeyCCAT is still a small organization with only three full-time employees. But the dedication to its values and having a clear strategic vision, SeyCCAT has punched well above its weight and has no plans to slow down any time soon.
For more about SeyCCAT@5:
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SeyCCAT kicks off activities for its 5th anniversary