By Duncan Miriri
NAIROBI, March 23 – The Nature Conservancy, a U.S.-headquartered global environment group, is in talks with three African nations to seal debt swaps worth a combined $500 million to secure cash for preservation of key ecosystems, its head of Africa told Reuters.
Debt-for-nature swaps help poorer countries reduce debt payments in return for conservation commitments. Both Seychelles and Gabon have used them over the last decade, but there have been none since Donald Trump’s return to the White House last year curtailed crucial U.S. support.
However, organisations that have helped pioneer the schemes, such as The Nature Conservancy, are working with multilateral development banks, private insurers and investment funds to kick-start them again.
“We have the projects on the table that we are working on with three different countries… we are looking at upwards of $500 million (in total),” Ademola Ajagbe, TNC’s regional managing director for Africa, told Reuters in an interview in the Kenyan capital, adding that one deal was likely to be closed this year and another two in 2027.
He did not name the countries, multilateral lenders and international banks involved, citing confidentiality agreements.
PRESSURE ON FINANCING
Ajagbe didn’t elaborate on how the U.S. pullback had impacted the group’s work in Africa, but stressed that demand for funding for environmental projects was still increasing.
“There are a multiplicity of factors limiting Africa putting money on the table to protect its natural assets,” he said. “Part of the problem is because the cost of capital is rising, meaning we are at a very disadvantaged position.”
The eruption of the war in Iran has sent global borrowing costs surging, potentially curbing market access for debt-strained African countries but also boosting the appeal of debt swaps as falling bond prices make it cheaper to buy back debt.
The continent, which has been buffeted by landslides, floods and droughts since last year, receives just 1% of the annual global climate financing, government officials say.
The likes of Kenya and Zambia, where TNC has long-standing programmes, have seen many key sectors such as tourism, food production and hydroelectric power generation hit by climate change.
In addition, wider geopolitical tensions were affecting the provision of climate finance for Africa by Western donor nations, Ajagbe said.
“There has also been reallocation of development assistance from conservation, developmental causes to issues around defence.”
He said Gabon, which saw a military coup just weeks after it secured its debt swap in 2023, was sticking to its commitments under the deal despite political upheaval. Discussions underway about additional financing go beyond ocean conservation, which was the focus of the 2023 deal, he said.
“The current government as we speak, are honouring the commitment made by the previous administration,” Ajagbe said. “We are looking at ocean, forests, and freshwater. So it’s a broader scope, it’s a bigger overarching vision.”
(Reporting by Duncan Miriri; Editing by Marc Jones and Aidan Lewis)
