Galápagos Debt-for-Nature Swap — Ecuador's $1.6bn Sovereign Bond Conversion for Marine Conservation

On 9 May 2023, Ecuador completed what was then the world's largest debt-for-nature conversion: the government repurchased USD 1.6 billion of its sovereign bonds at roughly 40 cents on the dollar, financed through a USD 656 million loan structured with support from the Inter-American Development Bank (IDB) and the US International Development Finance Corporation (DFC), with insurance from the DFC and Credit Suisse as arranger.
The transaction is projected to save Ecuador about USD 1.1 billion in debt service over 17 years and to channel roughly USD 450 million into marine conservation over 18 years, funding management of the Galápagos National Park, the Galápagos Marine Reserve and the newly created Hermandad Marine Reserve — together spanning about 198,000 km² of ocean — plus an endowment projected to reach over USD 227 million by 2041, yielding roughly USD 12 million a year in perpetuity.
Independent scrutiny has tempered the headline framing: a 2025 Debt Justice analysis of four comparable swaps (Barbados, Belize, Gabon and Ecuador) found they reduced sovereign debt levels by an average of only about 3%, and advocacy groups including the Coalition for Fair Fisheries Arrangements have raised concerns that similar deals can shift management of strategic marine areas with limited consultation of local fishing communities — a governance caveat worth weighing against the conservation funding secured.

Read the full analysis: https://www.debtfornature.org/case-studies-blog/galapagos