Costa Rica Debt-for-Nature Trade Due to Protect Land
Conservationists have made their largest single debt-for-nature swap, buying $5.6 million in discounted debt for $784,000 to help protect over 355,000 acres in Costa Rica, an environmental group said Wednesday.
The Nature Conservancy, an international land conservation group, said it purchased the debt from American Express Bank in the fifth debt-for-nature transaction and the one with the largest face value so far.
“The over $3 million generated by the debt swap transaction will fund park protection, conservation training, educational programs, biological inventories and land acquisitions variously at nine conservation projects throughout the country,” the group said.
The debt will be converted to Costa Rican currency bonds valued at $1.7 million. The bonds, paying an average yearly interest of 25% over five years, are expected to generate more than $3 million, the Nature Conservancy said.
The World Wildlife Fund made the previous biggest swap, valued at $5.4 million in March, 1988, also in Costa Rica.
Costa Rica is experiencing the highest deforestation rate, outside of its parks, of any country in the Western Hemisphere.
The project was initiated by the Costa Rican National Parks Foundation, a private organization, and authorized by the Costa Rican Natural Resources Ministry and the Central Bank.