Photos: Lee\Flickr\Semafor Africa\YouTube Screenshots
Five African countries are reportedly in talks to raise $2 billion from a novel financing arrangement that restructures debt to invest in ecological conservation programs.
A debt-for-nature swap, as the financing is known, raises money that is used to set up a long-term investment fund. The fund’s managers and board determine what it invests in, while proceeds are then used to carry out conservation efforts.
The five unnamed African countries are said to be considering a $2 billion raise to protect a part of the Indian Ocean rich in coral reefs, Reuters reports. African countries nearest to the ocean include South Africa, Mozambique, Kenya, Tanzania, Madagascar, Mauritius and Somalia. The joint plan is reportedly supported by the US and British governments.
Gabon closed the first debt-for-nature swap by an African country last year, selling a $500 million bond. The project is expected to generate $163 million in new funding for ocean conservation, according to The Nature Conservancy, a Virginia-based organization that partnered with the government to broker the raise.
