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Political Risk Insurance to Support a marine conservation-linked bond in Galapagos

This is a US$ 656 million Galápagos marine conservation-linked bond (Galápagos Marine Bond), arranged and structured by Credit Suisse in partnership with the Government of Ecuador, the U.S. International Development Finance Corporation (DFC), Inter-American Development Bank (IDB), Oceans Finance Company (OFC), and Pew Bertarelli Ocean Legacy. The bond financed a debt conversion for Ecuador, exchanging US$ 1.628 billion of the country’s international bonds for a US$ 656 million loan, with DFC providing US$ 656 million in political risk insurance and IDB supplying an US$ 85 million guarantee. A consortium of 11 private insurers, including Swiss Re, provides over fifty percent reinsurance to support the transaction. Ecuador stands to realize more than US$ 1.126 billion in lifetime savings through reduced debt service costs.

The conversion is estimated to channel US$ 323 million toward marine conservation in the Galápagos Islands over 18.5 years, comprising roughly US$ 12.05 million in new annual funding and approximately US$ 5.41 million per year on average to capitalize an endowment for the Galapagos Life Fund (GLF). This endowment is projected to exceed US$ 227 million by 2041, serving as a permanent funding source for marine conservation beyond the transaction’s term — bringing the total endowment to US$ 450 million for marine conservation.

Start - End Date
2023-ongoing
Country/Region
Latin America and Caribbean
Realm
Marine

Project details

Spatial Scale

National

Insurance Trigger Types

Indemnity

Insured Risks

Political and Sovereign Credit Risk


Insurance Scheme Targets

Private - Investors

Insurance Scheme Developer Types

Public-Private-Partnership

Insurance Product Types

Insurance to de-risk/enable investment in nature

Partners

Government of Ecuador, the U.S. International Development Finance Corporation (DFC), Inter-American Development Bank (IDB), Credit Suisse, Oceans Finance Company (OFC), Pew Bertarelli Ocean Legacy, AXA XL, Fidelis MGU, Chubb Global Markets, Sovereign Risk Insurance Ltd, Mosaic, Coface, Swiss Re, MSAmlin

Referred by

UNEP

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