A $500 million deal to restore Gabon's coast reignites climate finance debate
abcnews.go.comGabon is refinancing $500 million of its debt through a deal aimed at directing more funds to ocean management
DAKAR, Senegal — Gabon will use a controversial financial move to ease its debt burden and restore its oceans at the same time, a leading conservation group said Tuesday.
It’s the second-largest deal of its kind to date, and the first on mainland Africa, according to a press release by The Nature Conservancy, the global environmental nonprofit that helped broker the deal.
Gabon, an oil-rich Central African nation known for its biodiversity, hosts the world’s largest population of leatherback turtles and myriad other endangered species. By refinancing $500 million of its foreign debt, TNC estimates, Gabon will free up $163 million to expand its protected coastal areas and combat illegal overfishing.
“It’s a really interesting way of slightly reducing our debt repayments and also generating money for conservation,” said Lee White, Gabon’s minister of water, forests, sea, and environment. He collaborated with TNC, Bank of America and others to negotiate lower interest rates on Gabon’s outside debt, with the goal of freeing up funds for conservation.
Since 2016, TNC has pulled off similar so-called “blue bond” agreements in the Seychelles, Belize and Barbados. But while donors and host governments pitch climate refinancing as a win-win solution for indebted nations, local populations and the environment, critics say such deals barely skim the surface of what’s needed to address climate change.
“This seems like a great deal at first glance, but when you look at the details … the money that is being freed up for conservation is typically a tiny fraction of the deal,” said Frederic Hache, a sustainable finance
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