Note: This statement has been updated to correct a date and figures on the debt payments and political risk insurance
WASHINGTON—The Pew Bertarelli Ocean Legacy Project applauded today’s announcement by Ecuador on completion of the largest debt conversion for ocean conservation to date—a move that provides one of the world’s poorest countries with significant and sustainable financial resources to protect the Galápagos Islands’ highly biodiverse and fragile marine ecosystem.
Ecuador, with technical support from the Pew Bertarelli Ocean Legacy Project and other partners, converted $1.6 billion in existing commercial debt into a new $656 million loan financed through a new $656 million bond issued by Credit Suisse.
The transaction will directly benefit Ecuadorians by cutting the government’s debt and reducing its borrowing costs by about $1 billion, resulting from forgiven debt, known as write-offs, and reduced interest. The debt conversion will also generate more than $450 million in total conservation resources over the next 20 years (and far more over time) to help preserve thriving waters that host some of the world’s highest levels of endemism—that is, species found nowhere else on Earth.
The conservation funding will help Ecuador address pressures from climate change and overfishing that threaten this unique and biodiverse ecosystem and the local economy and communities that depend on the continued abundance of wildlife.
In addition to repaying the $656 million loan, Ecuador committed to invest about $17 million annually until 2040 for conservation in the Galápagos—about $12 million for marine conservation activities and about $5.4 million to build a permanent conservation endowment. When the annual $5.4 million payments end in 2040, the endowment assets should total about $227 million from the accumulated payments and stable investments—an amount sufficient to cover in perpetuity continued conservation financing at the same level of slightly more than $12 million annually.
As part of the agreement, the conservation and endowment funding will be directed by the nonprofit Galápagos Life Fund (GLF), which was established in May 2023 for this purpose. The GLF will be governed by an 11-member board of directors that includes five Ecuadorian government ministers and six representatives from nongovernmental organizations. The funding will support the Galápagos National Park Service and the management, monitoring, and enforcement of the waters surrounding the Galápagos Islands, including the Galápagos Marine Reserve and the newly created Hermandad Marine Reserve. Ecuadorian-based organizations can also request funding to conduct research, advance sustainable fisheries, strengthen climate resilience, and develop a sustainable blue economy for the local communities.
Also as part of the agreement and in cooperation with the fishing industry, the government will require electronic monitoring devices on all industrial purse seine and longline fishing vessels, and onboard observers on at least 70% of purse seine vessels by the end of 2024 and on at least 20% of longline vessels by the end of 2025. Additionally, for the first time, Ecuador will limit the use of fish aggregating devices (FADs)—raft-like objects that fishers commonly use to attract tuna, making it easier for purse seine nets to scoop up fish. This practice can result in significant bycatch and marine debris because FADs are often abandoned at sea after use.
To develop the conservation commitments and funding priorities, government worked alongside the artisanal and industrial fishing sectors and local communities through an inclusive process that included numerous formal and informal consultations. The government also committed to ensuring continued community engagement and transparency, for example through ongoing environmental and social impact assessments of engagement efforts, stakeholder concerns, and economic and ecological changes.
Credit Suisse arranged and structured the bond; the U.S. International Development Finance Corp. provided $656 million in political risk insurance for the loan; and the Inter-American Development Bank provided an $85 million guarantee. The Oceans Finance Company and Aqua Blue Investments also collaborated with Ecuador on the deal. The Pew Bertarelli Ocean Legacy Project, with the support of partners, supported the development of the GLF and the conservation commitments.
Ecuadorian Minister of Foreign Affairs Gustavo Manrique said, “Our rich waters provide an irreplaceable foundation of Ecuadorian strength and vitality. Growing global threats to our seas pose fundamental dangers to our health, wealth, and well-being, particularly for our poorest and most vulnerable people. Meeting this challenge and delivering for both our people and nature required consensus and bold action at a global scale. Today we preserve the future for our country and all of humanity. We deeply appreciate the invaluable support of the Pew Bertarelli Ocean Legacy Project in helping to deliver this achievement.“
Tom Dillon, senior vice president for environment and crosscutting initiatives at The Pew Charitable Trusts, said: “Galápagos is already renowned globally for its natural wonders and now, benefiting from the world’s largest debt-for-nature swap, it can also be known for an innovative finance solution that provides a thriving, inclusive, and sustainable future. And while nations around the world recently agreed to protect and conserve at least 30% of the planet by 2030, many countries struggle to secure the funding needed to invest in safeguarding nature. There’s no single solution to meet this challenge, but Ecuador chose a path which provides a significant and sustainable investment in a future with a healthier and more resilient marine environment for both people and nature.”
Dona Bertarelli, a philanthropist, ocean advocate, and patron of nature for the International Union for Conservation of Nature, said: “By delivering the world’s largest debt-for-nature swap, Ecuador has shown that it’s possible to create inclusive economic growth while protecting biodiversity. The ocean urgently needs our protection. That requires large-scale conservation projects, which in turn need large amounts of sustainable financing. This deal will restore ocean health, protect marine life in the Galápagos, support coastal communities, and provide jobs and economic benefits for generations to come. This is good news for nature and good news for people, and I hope many more countries will follow Ecuador’s lead.”
Giuseppe Di Carlo, director of the Pew Bertarelli Ocean Legacy Project, said: “Science shows that the effectiveness of marine protections often depends on securing the funding needed for implementation and ongoing monitoring, management, and enforcement. Driven by science, inclusion, and consensus, Ecuador’s sustainable funding mechanism provides an extraordinary win for nature and people.”
Alberto Andrade, an artisanal fisherman and director of Frente Insular, a Galápagonian community organization created to protect marine ecosystems, said, "We depend on a healthy and thriving ocean. We depend on the environmental benefits they generate for Galapagos and the world. When you love something, you care for it and help protect it. Our community has maintained a strong voice in support of both expanded marine protections and new financial resources that will help address the growing threats of pollution, climate change and harmful fishing practices."
The Pew Charitable Trusts and Dona Bertarelli created the Pew Bertarelli Ocean Legacy Project, with the shared goal of establishing the first generation of ecologically significant, large, and effective marine protected areas (MPAs) around the world. Today, the Pew Bertarelli Ocean Legacy Project also seeks to connect MPAs and help conserve key migratory species and entire marine ecosystems. These efforts build on more than a decade of work by Pew and the Bertarelli Foundation, led by Dona Bertarelli, to create large-scale highly or fully protected MPAs. Between them, they have helped to obtain designations or commitments to safeguard nearly 12.6 million square kilometers (4.8 million square miles) of ocean by working with communities, local leaders, philanthropic partners, Indigenous groups, government officials, and scientists. Dona Bertarelli is a philanthropist, investor, sportswoman, and strong advocate for ocean conservation. The Pew Charitable Trusts addresses the challenges of a changing world by illuminating issues, creating common ground, and advancing ambitious projects including the need for effective marine conservation.