The Seychelles Debt-for-nature Swap, A Case Study

Access to reliable and sustainable concessionary financing for biodiversity conservation and adaptation to climate change has always been a major challenge for developing countries. Small Island Developing States (SIDS) are among the most vulnerable countries and also the most in need of financial support to meet their national needs and international commitments. Constrained by a small economic base and limited national resources to invest in their core economic and social sectors, they are unable to find the necessary fiscal space to allocate substantial financial resources to nature conservation. As a group, SIDS are also highly vulnerable to global economic shocks and disasters, which have a direct impact on their ability to meet their financial commitments, including the repayment of debt. Considering these challenges, they have had to borrow heavily to finance their national development programs and, therefore, are highly indebted.