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Belize had USD 553 million in a single Eurobond known as the “Superbond”, as it represented all of Belize’s external commercial debt and a quarter of its total debt.

At Belize’s request, TNC arranged an innovative financial structure, the USDFC-insured Blue Loan between the Belize Blue Investment Company (BBIC) and Belize, that provided “political risk insurance” that substantially lowers the credit risk and consequently the cost of the blue bond (55 cents on the dollar).

The DFC credit enhancement allowed BBIC to raise funding from Credit Suisse via the issuance of highly rated Blue Bonds and pass through below-market rates to Belize. The Superbond refinancing enabled Belize to repurchase USD 553 million, a quarter of the country’s total public debt, from bondholders at a 45% discount. 


The savings achieved in the refinancing allowed Belize to create an estimated USD 180 million in conservation funding over 20 years, composed of annual cashflows from the government and an endowment capitalized through the Blue Loan.

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The Nature Conservancy Belize Blue Bonds for Ocean Conservation Case Study 

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As part of the transaction Belize committed to implement pre-defined ocean conservation milestones. The milestones are time-bound and delays in achieving the commitments will result in increased payments under the Conservation Funding Agreement.


The key conservation commitments are:

  • Creation of an independent Conservation Fund (USD 180 million created over 20 years)

  • Increase in Biodiversity Protection Zones from 15.9% to 30% of ocean area by 2026

  • Completion of a Marine Spatial Plan by 2026 (where to expand ocean protection and best deliver benefits to people, livelihoods, and biodiversity)

  • Protection of the public lands within the Belize Barrier Reef Reserve System, a UNESCO World Heritage Site



1. Refinancing of Sovereign Commercial Debt at Scale: Previous Debt for Nature Swaps were mostly small and refinanced bilateral (government-to-government) lending. The Belize debt conversion refinanced external commercial debt—often the most expensive and burdensome debt for a country due to higher interest rates. This product allows countries to take advantage of discounts available in the capital market and therefore does not require negotiating write-offs from official bilateral creditors. 

2. Use of Political Risk Insurance: The transaction was the first structure to utilize the combination of Arbitral Award Default and Denial of Justice policies from DFC for environmental protection and conservation financing. As DFC is the development finance institution of the United States government, the policy is supported by the full faith and credit of the United States.

3. Investor Class Substitution: The DFC credit enhancement facilitated the Aa2 Moody’s credit rating on the Blue Bonds which allowed Credit Suisse to place the bonds from the emerging market bond market to institutional investors seeking low risk assets. Moving from distressed high-yield investors to the Aa2 segment allows for the identification of investors with the highest ESG appetite to unlock more funding for conservation.

4. Commercial Parametric Insurance: The Blue Loan structure incorporates the world’s first commercial sovereign debt catastrophe insurance cover. The parametric insurance policy provides coverage for a Blue Loan debt payment (coupon and principal) following an eligible hurricane event in Belize. The policy was designed by Willis Towers & Watson and underwritten by a subsidiary of Munich Re.



In September 2022, the Government of Barbados (GoB), The Nature Conservancy (TNC), and the InterAmerican Development Bank (IDB) announced the completion of a USD 150 million debt conversion that created long-term sustainable financing for marine conservation to protect up to 30% of its Territorial Sea.

Compared to the Belize debt conversion where the Government repurchased debt at 55 cents on the dollar, the Barbados Eurobond was tendered at 92.25 cents. In a pioneering MDB/NGO4 co-guarantee structure, IDB guaranteed USD 100 million on a first loss position, while TNC guaranteed USD 50 million on a second loss position, of the Blue Loan. This co-guarantee provided by two entities with ratings of Aaa (IDB) and Aa2 (TNC) enabled the Blue Loan to achieve a very low 3.8% interest rate and savings for conservation funds.

On May 9th 2023, Ecuador’s government successfully completed the Galapagos Debt for Nature swap, repurchasing USD 1.6 billion worth of Ecuador’s outstanding bonds at approximately 40 cents on the dollar. The operation will save Ecuador USD 1.1 billion in debt service repayments over the next 17 years, with USD 450 million invested in conservation and sustainable activities. Conservation investment will benefit the Galapagos National Park.

Ecuador sovereign bonds yield from 17% to 26%, but the new bond has an $85 million 'credit guarantee' from the Inter-American Development Bank and $656 million of political risk insurance from the U.S. International Development Finance Corp (DFC), effectively making it less risky and therefore less costly (5.645% interest rate)

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