Implementing the debt-for-nature swaps for marine protected areas: case studies from Seychelles and Belize

Abstract As a financing method providing financial support for environmental protection, debt-for-nature swaps (DFNS) have been implemented for nearly forty years. DFNS have covered marine protected areas (MPAs) in four countries since 2015. Although extensive literature discusses the various issues surrounding DFNS, only some researchers have connected the topics of DFNS and MPAs to evaluate the performance of implementing DFNS for financing MPAs. This paper contributes to filling this gap by analyzing the performance of the DFNS for financing MPAs from economic, legal, and environmental aspects by case studies from Seychelles and Belize. It aims to find an answer to the research question of whether the implementation of DFNS is a viable option for financing MPAs by exploring the current performance and discussing the future development of implementing the DFNS for MPAs. The DFNS has played a positive role in establishing MPAs in Seychelles and Belize by providing stable financial support for MPAs and improving the debt sustainability of debtor countries to some extent. However, there are various barriers from a legal perspective in reaching a swap agreement, ensuring the effective implementation of the agreement, and improving the transparency construction. With the trend of increasing scale and amount of debt relief and funding, the DFNS is expected to play an important role in promoting the establishment of MPAs, realizing the economic benefits, and having a satisfactory performance by legal measures. It concludes that with the transparency construction of information disclosure, special legislation on DFNS, an appropriate scale of debt for conversion determined by considering the debt sustainability, an adaptation to the innovation of the contractual approach of sovereign debt restructuring, and complementary assistance from different levels, the implementation of DFNS can be a viable option for financing MPAs.