(Ecofin Agency) - Following Gabon's example, the "debt-for-nature" approach is becoming more popular in Africa, particularly among nations with heavy debt burdens and rich biodiversity. If the IUCN's initiative succeeds, it would mark the first time African countries work together to negotiate a collective debt swap aimed at protecting their shared ecosystem.

Five African nations are preparing to launch what could be the world's first joint "debt-for-nature" exchange. This initiative aims to raise at least $2 billion to protect the marine ecosystems of the Indian Ocean, a region rich in biodiversity but threatened by environmental degradation. The project is backed by a global group of nature conservation organizations, including the International Union for Conservation of Nature (IUCN).

Reports indicate that the IUCN hopes to finalize the operation by June 2025. Along with its allies, the organization is working on creating a dedicated fund estimated to reach at least $2 billion. This fund would consist of $500 million from concessional financing and $1.5 billion generated through bond exchanges. To achieve this, negotiations are underway with several major multilateral development banks in the region to establish credit guarantees and insurance, which are essential for completing the operation.

In recent years, "debt-for-nature" exchanges have gained popularity among nations facing debt challenges. The principle is simple: creditors agree to reduce these countries' financial obligations in exchange for their commitment to use the savings to fund conservation projects. This mechanism, already utilized by countries like Ecuador, Belize, Gabon (with the support of the U.S.-based NGO The Nature Conservancy), and Seychelles, is becoming an increasingly attractive solution for developing nations. If successful, this African initiative would be the first to involve multiple states sharing the same ecosystem.

"If we want to really deliver a substantial impact in the next five years we cannot just continue issuing them one by one," says Thomas Sberna, IUCN’s regional head for coastal resilience.

While the five participating countries have not yet been revealed, it is known that Kenya, Madagascar, Mauritius, and Tanzania are involved in the “Great Blue Wall” project. This expansive plan, supported by the U.S. and U.K. governments, aims to restore 2 million hectares of ocean ecosystems by 2030. These countries, all located in the western Indian Ocean, share fragile marine ecosystems that are crucial for the survival of more than 70 million people dependent on fishing and tourism.

Historically, regional cooperation on marine resource management issues, such as fishing rights, has been complex. Mr. Sberna told Reuters negotiations are still ongoing, but we hope to reach an agreement for the United Nations Ocean Conference next June.

One of the major challenges of these agreements is fund distribution. How much money will each country receive? Who will decide which projects to fund? These questions require in-depth discussions in the coming months.