Leo’s True Story OR The world’s first nature-for-debt swap

Earlier this month we wrote about the current state of marine reserves, an area which some very promising developments took place in 2015. The Nazca-Desventuradas Marine Park in Chile, Kermadec Ocean Sanctuary in New Zealand, and the marine protected area around the Pitcairn Islands in the South Pacific are examples of such.

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The Seychelles (Source: www.mahlatini.com)

Another lucky, but seemingly unrelated, event was when Leonardo DiCaprio finally won his long deserved Academy Award this year for his leading role in The Revenant. Having been an outspoken environmental activist for a number of years now, he took the time to talk about the worrying state of our environment – specifically our oceans – in his acceptance speech.

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DiCaprio at the UN Framework Convention on Climate Change

Building on that, he has now given 1 million US dollars to the Seychelles to support them in their endeavor to protect the ocean surrounding the nation. The small independent African island nation in the Indian Ocean consists of 115 small islands, most of which are uninhabited. Despite this they don’t have a lot of landmass, the Seychelles’ territory consists of 99% water. The nation is also massively indebted (the debt amounting to 21.4 million dollars) which has led to the first ever “debt for nature swap” agreement with foreign investor groups, which we’ll explain further down – but first things first.

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One of the many local fish markets in Seychelles

Leonardo’s donation – or more accurately the Leonardo DiCaprio Foundation’s (LDF) donation, active since 1998 – supports them in protecting 400,000 square kilometres of ocean. Besides this being simply necessary to preserve marine life and their environment for their own sake, the Seychelles are financially dependent on their ocean staying healthy. Their economy relies on tourists (who come for the spectacular beaches and beautiful ocean travel agencies frequently advertise) and on fishing. As DiCaprio himself explained: “This deal will enhance food security for the local people of Seychelles, help mitigate the effects of climate change on their low lying island home, and protect the surrounding rich ocean ecosystems for future generations.” In the past the LDF has pledged over 7 million US Dollars towards ocean conservation projects alone and has overall donated over 30 million US dollars since 2010 to various causes and nations.

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The Seychelles

The money also played an important role in supporting the earlier mentioned new debt swap deal. To break it down (keep in mind that we are very much simplifying the matter here): instead of directly paying back high interest loans to other nations (which is how a government would normally get rid of its debts), the The Nature Conservancy bought back much of their debt (through impact investments and grants) making the debt more manageable. So now the Seychelles government will pay into the Seychelles Conservation and Climate Adaptation Trust, which funds the implementation of the marine protected areas (MPAs) and pays back investors, while the Seychelles pays back its debtors at a discount. If this works out this will lead to the creation of the second-largest marine protected area in the West Indian Ocean. Most importantly, it could set a precedent for other islands in similar situations and lead to the development of more marine reserves.

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