In Belize, innovative debt-for-nature swap yields tangible progress in conservation
4 min readJul 28, 2023

To the more than 200,000 tourists who visit Belize each year, the small Central American country is a marvel of the natural world, with more than 240 miles of Caribbean coastline, lush mangrove forests, coral atolls, offshore islands, and the Mesoamerican Reef, a UNESCO World Heritage Site.

For the 139,000 Belizeans who live and work along the coast, this natural environment is a fragile ecosystem that has been degraded by coastal development, agriculture runoff, and the impacts of climate change. Preserving the country’s coastline requires significant investment, and until recently, the country’s high levels of sovereign debt made the necessary investment impossible.

Two years ago, DFC supported a groundbreaking transaction in partnership with The Nature Conservancy as part of a Blue Bonds for Ocean Conservation project that helped Belize raise $180 million for marine and coastal conservation by repurchasing sovereign debt in support of commitments that included protecting 30 percent of Belize’s ocean. This summer, in its first annual impact report to DFC, The Nature Conservancy detailed how that money is being used to advance long-term conservation. To date, the Government of Belize and the Belize Fund for a Sustainable Future, which was established to provide grants for conservation, have accomplished the following through the project:

  • Expanded biodiversity protection zones to encompass 20.3 percent of Belize’s ocean
  • Designated public lands within the Belize Barrier Reef Reserve System as mangrove reserves
  • Begun developing a marine spatial plan (MSP) for Belize’s ocean to identify additional areas in need of protection
  • Approved more than $7 million in grants for a variety of conservation projects

These initial steps are part of a long-term goal to ultimately designate 30 percent of Belize’s ocean as a Biodiversity Protection Zone. Mangrove forests, made up of tropical plants that grow in wet soil or salt water, are a key feature of Belize’s coastline and Barrier Reef system, which will also receive additional protections. Developing a marine spatial plan will provide a critical element in advancing these efforts by offering a data-driven system for determining where to expand ocean protection and improve ocean management.

The progress report also details the grants that have been provided to nonprofits and businesses, as well as the Government of Belize to advance conservation. The Belize Fund for a Sustainable Future was established to provide grants in four key areas, including protection for biodiversity, sustainable fisheries, climate resilience, and blue business innovation. To date, BFSF has committed approximately $7.7 million in grant funding to projects that are focused on protecting the manatee, safeguarding a wildlife sanctuary, improving management of a marine reserve, restoring endangered coral species, strengthening the governance of fisheries, and improving monitoring of mangroves.

Advancing sustainable development and climate adaptation
Funds supporting these extensive conservation efforts were generated through the Blue Bond for Ocean Conservation project in Belize, which included a novel transaction DFC supported in 2021 in partnership with The Nature Conservancy, the Government of Belize, and Credit Suisse to refinance the country’s external commercial debt. DFC political risk insurance proved critical to the success of the transaction, elevating the credit profile of the bonds so they earned a rating of Aa2, significantly higher than Belize’s rating of Caa2. This use of political risk insurance to strengthen sovereign debt offers an effective model for raising money for conservation. DFC has since supported a similar debt-for-nature transaction for marine conservation in the Galapagos Islands in Ecuador, which closed earlier this year.

Protecting these vulnerable marine areas aligns closely with DFC’s development mission in multiple ways. It will make coastal industries like fishing and tourism more resilient, supporting the livelihoods of people, many of them women and low-income individuals, who work in these industries. Sustainable development will also help coastal communities adapt to the impacts of climate change. Because Belize’s oceans are so critical to the lives and livelihoods of its people, the plans to expand protection zones were written with detailed goals, including an equity goal to ensure fair and equitable access to ocean resources for all Belizeans and to support the development of a “blue economy” for the sustainable use of ocean resources.



U.S. International Development Finance Corporation. Investing in development and advancing U.S. foreign policy. Twitter: @DFCgov