Seychelles Blue Bond and Debt-for-Nature Marine PES — SeyCCAT Conservation Fund

The Seychelles, an Indian Ocean archipelago of 115 islands with one of the world's richest marine biodiversity hotspots, historically protected less than 0.04% of its roughly 1.35 million km² exclusive economic zone (EEZ). In 2016, The Nature Conservancy (TNC) negotiated a debt-for-nature swap with Paris Club creditors, restructuring about USD $21.6 million of Seychelles' sovereign debt at below-market rates, with the government committing to channel savings of up to $430,000 per year into SeyCCAT, an independent multi-stakeholder trust.

The programme aimed to expand marine protected area coverage and fund sustainable fisheries and community climate adaptation, while restructuring sovereign debt on more favourable terms.

In October 2018, Seychelles issued the world's first sovereign blue bond — USD $15 million, facilitated by the World Bank and subscribed by Calvert, Nuveen and Prudential — split between SeyCCAT grants ($3 million) and a Blue Investment Fund for sustainable fisheries ($12 million, channelled through the Seychelles Development Bank). SeyCCAT ran open grant calls, funding marine research, voluntary fishery closures, sustainable aquaculture and community climate adaptation, and around 15 fishing communities received direct support through improved gear, fish aggregating devices, catch monitoring and fisher training.

By March 2020, Seychelles had exceeded its commitment, expanding fully managed marine protected areas from 0.04% to 30% of its EEZ — approximately 22 million hectares. SeyCCAT distributed USD $5.3 million in grants to 96 local projects. The model has since catalysed at least six subsequent marine debt-for-nature swaps globally, including in Belize, Ecuador, Barbados and Grenada.

Independent reviews note a cautionary dimension: some artisanal fishers reported income losses as traditional fishing grounds came under MPA regulation without adequate transitional compensation. SeyCCAT's governance is broadly praised for transparency — open grant calls, published accounts — though its long-term financial sustainability beyond the debt-swap period remains an open question.