Seychelles Debt Restructuring Brings Award for Achievement in Transformational Finance
The Financial Times and IFC, a member of the World Bank Group, have announced the winners of the 2016 FT/IFC Transformational Business Awards.
This year’s program marked 11 years of collaboration between FT and IFC on global awards initiatives that highlight ground-breaking, commercially viable solutions to today’s development challenges. For 2016, special attention was given to products and services that address challenges around climate change, especially in rapidly growing urban areas. The awards also highlighted the role of the private sector in achieving the United Nations Sustainable Development Goals (SDGs). A total of 155 entries were received from 219 organizations involving projects in 92 countries.
NatureVest’s restructuring of the Seychelles’ sovereign debt has converted a portion of this debt back into a local currency payment stream, to be used to support conservation in the local area. The restructuring provides $281,000 per year for marine conservation activities, and will also see the Seychelles increase its marine protected area in return. This collaboration is the first time that private investment capital has been used to finance a debt-for-nature swap, proving that this model is viable and replicable as a conservation method.
The Nature Conservancy and our impact investing unit, NatureVest, are honored to receive the 2016 FT/IFC Transformational Business Award for Achievement in Transformational Finance. I'm delighted NatureVest and its founding sponsor and strategic advisor, JPMorgan Chase & Co., have been recognized among distinguished peers who are all working hard to transform developing economies through innovative financing.
NatureVest’s recent transaction restructuring the Republic of Seychelles’ sovereign debt marks the first time a debt conversion deal has included private impact investment. The deal demonstrates that this financial mechanism is not only feasible but could be replicated by other developing island states. Another important aspect of this debt restructuring is the fact that a significant amount of the funding will go toward conservation. Seychelles' marine protected areas will increase by a factor of 30, and a trust will fund marine conservation and climate change adaptation solutions such as coral reefs and mangroves. These conservation measures will go a long way toward protecting the island's fishing and tourism economy, which is threatened by rising sea levels and more frequent storms.