Ecuador is showing the world a creative solution for protecting delicate ecosystems, in what is being called the biggest debt-for-nature swap in the history of the world. Take a look at the details of this unique financial arrangement that accounts for the immense value of Galápagos Islands ecosystem.

Ecuador has arranged for an influx of $12 million per year earmarked to protect the Galápagos Islands ecosystem. 

Cash-strapped Ecuador secured a “blue bond” to finance a loan to fund its conservation efforts.

The World Bank defines a blue bond as: “a debt instrument issued by governments, development banks or others to raise capital from impact investors to finance marine and ocean-based projects that have positive environmental, economic and climate benefits.”

Credit Suisse bought three of Ecuador’s bonds, worth $1.6 billion, at a discount of nearly 60 percent.  This saved the country around $1 billion in repayments over 17 years.

Credit Suisse then converted the bonds into the $656 million Galápagos Marine Bond, which it used to finance the loan that will benefit conservation in Ecuador.

The new bond has an Inter-American Development Bank guarantee, and $656 million political risk insurance from the International Development Finance Corporation.

Ecuador’s ecologically rich Galápagos Islands are an archipelago in the eastern Pacific Ocean. The islands are home to many endemic species not found anywhere else in the world.

The largest debt-for-nature deal in history took around three years to complete.

Ecuador’s Foreign Minister Gustavo Manrique Miranda said Ecuador is as rich as any of the world’s wealthy nations, “but our currency is the biodiversity.”

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