The government of Seychelles and creditors from the Paris Club and the South African government announced on Monday the closing of the first ever debt restructuring for climate adaptation.

This announcement was made at a side event which took place on Monday within the compound of UNFCCC COP 21. Seychelles is the first country to close on new, replicable financial model using private capital.

Speaking at the event from Seychelles were Minister Didier Dogley and Ambassador Ronny Jumeau.  Minister Dogley expressed Seychelles’ pride at being the first country to create a real tangible financing mechanism to fund adaptation to climate change, the conservation of natural coastal and marine resources and the Blue Economy.

The agreement brings together public and private financial support, including the use of innovative impact capital, to increase the resilience of island nations most susceptible to the impacts of climate change.

As erosion, storms and floods increase, the health of island communities, such as those in Seychelles are critically impacted and threatens their ability to sustain livelihoods. This new debt restructuring will fund nature-based solutions to climate change and is the latest in the array of innovations emerging from islands to build resilience.

The deal is supported by The Nature Conservancy and was negotiated in the Paris Club with support from the French government. All benefits supported by the debt restructuring will support adaptation to climate change through improved management of coasts, coral reefs, and mangroves. The financing will promote implementation of a Marine Spatial Plan for the entire Seychelles Exclusive Economic Zone, a territory approximately 3,000 times the size of their land mass.

“This landmark debt for adaptation deal with our Paris Club creditors is a major step forward for our nation, said President James Michel of Seychelles in a video shown at the event.

“This deal simultaneously contributes to our climate adaptation and marine conservation activities as well as improving the economic health of Seychelles.”

“This debt swap will have a big impact on climate adaptation and marine conservation in Seychelles," said Mark R. Tercek, president and chief executive of The Nature Conservancy.

"This innovative financing strategy, which could be replicated in island nations across the globe, provides an opportunity to protect island economies and help these nations become more resilient to the impacts of climate change."

This deal represents the first time where both a debtor (Seychelles) and creditor (South Africa) are developing countries. Paris Club creditors in this deal include France, Italy, Belgium, and the United Kingdom.

At its most basic, this debt restructuring converts a portion of Seychelles’ debt to other countries into more manageable debt held by a local entity; this is accomplished by refinancing it with a mix of impact investment and grants.

A number of other small island developing states are now competing to be the second country to replicate the Seychelles debt swap initiative. At the event Jamaica, Palau, Marshal Islands and Grenada announced that they are also in the process of developing their own debt swap initiative.

The event was attended by other members of the Seychelles delegation namely Ambassador Bernard Shamlaye, Dr Nirmal Shah, Catherina Bonnelame, Sharon Gerry and George Uzice.

Forrás: www.nation.sc