Gabon Blue Bond — Sovereign Debt Conversion for Ocean Conservation

On August 14, 2023, Gabon, Bank of America and The Nature Conservancy closed a $500 million debt-for-nature swap — the first such transaction in mainland Africa, following earlier island-nation deals in Belize, Barbados and the Seychelles. Gabon repurchased $500 million of its dollar-denominated international bonds at roughly 40 cents on the dollar, refinancing the debt through a new loan backed by blue bonds arranged by Bank of America.

The lower interest rate and longer repayment period unlock $163 million in new funding for ocean conservation, including $5 million a year for 15 years plus a conservation endowment projected to grow to approximately $88 million by 2038.

The financing supports implementation of Gabon's National Marine Spatial Plan, with a binding commitment to expand marine protection from 26% to 30% of the country's waters, and targets improved enforcement against the illegal, unreported and unregulated (IUU) fishing that is estimated to cost Gabon around $610 million a year.

The deal is part of The Nature Conservancy's broader 'Blue Bonds for Ocean Conservation' programme, which has by 2023 refinanced more than $1.2 billion of sovereign debt globally and generated over $400 million for conservation across more than 176 million hectares of ocean.

Independent commentary from the African Sovereign Debt Justice Network (Afronomicslaw) has raised governance questions: shortly after the swap closed, Gabon's government changed following a 2023 coup, and critics have asked whether conservation funds will be transparently managed and whether coastal fishing communities will see direct benefits. The successor government has stated it will honour the agreement, but independent, community-level impact evidence is not yet available given the deal's recency.

Read the full analysis: https://newsroom.bankofamerica.com/content/newsroom/press-releases/2023/08/bank-of-america-refinances-gabon-sovereign-debt-for-nature-and-o.html