Indonesia and US seal $35 mln coral reef debt swap
By Marc Jones
LONDON, July 8 (Reuters) -The U.S. has agreedto forgive $35 million of Indonesian debt over the next nine years, the U.S. Treasury said on Monday, in return for the Southeast Asian country restoring and preserving coral reefs in what experts estimate is the world's most biodiverse patch of ocean.
Coral reefs are under increasing threat globally, due largely to climate change which is raising sea temperatures. Data in May showed nearly two-thirds have been subjected over the past year to heat stress bad enough to trigger "bleaching", which can wipe them out.
The agreement is the fourth "debt-for-nature" swap the two countries have struck since 2009 and is expected to fund at least 15 years of conservation work in two key areas of what is known as the 'Coral Triangle'.
The Bird's Head Seascape and Lesser Sunda-Banda Seascape it targets both span hundreds of thousands of hectares, a habitat for over three quarters of all coral species and more than 3,000 types of fish, turtles, sharks, whales and dolphins.
Indonesia has roughly 5.1 million hectares of coral reefs, 18% of the world's total according tothe country's tourism ministry, but this year's bleaching problems have already had a devastating impact.
"These two regions are both at the epicentre of biodiversity," said Alexandre Portnoi, a legal advisor with Conservation International who helped organise the deal.
Indonesia benefitted from earlier debt swaps with the U.S. in 2009, 2011 and 2014 that collectively over time generated nearly $70 million. This is the first to focus on coral reefs rather than Indonesia's rainforests, which are imperiled by expanding palm oil plantations.
Reefs are harder to conserve at a national level because they are primarily threatened by planet-warming global greenhouse gas emissions from fossil fuels combustion, something Indonesia alone cannot tackle.
The agreement, signed last week and announced Monday, still hopes to make a difference.
It will see $26 million of Jakarta's debt written off under the U.S. Tropical Forest and Coral Reef Conservation Act. Conservation International will contribute $3 million and another $1.5 million will come from The Nature Conservancy, another group heavily involved in debt swaps.
Indonesia will commit to reef restoration while local non-profit groups will use conservation fund money to support projects that directly benefit reef ecosystems as well as sustainable livelihoods for those that rely on them.
"It is pretty simple," Portnoi said, explaining that debt for nature swaps were specifically designed to "break the cycle" of debt strains contributing to environmental degradation.
Additional reporting by Gloria Dickie
Editing by Christina Fincher and David Gregorio
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
