Posted: Wednesday, November 30, 2016. 3:04 p.m. CST.
By BBN Staff:The government of Belize, currently in a frenzy to restructure the 2038 Bond, may end up turning to a debt-for-nature swap after passing up one such historic proposal just a few years ago.
Recently, documents were made available to the media which detailed a proposal made to GOB by The Nature Conservancy (TNC), an international nature charity, shortly after the United Democratic Party (UDP) swept the elections in 2008. TNC proposed buying US $100 Million worth of the “Superbond” in exchange for Belize routing bond payments on the portion to an offshore fund which would be used to finance marine conservation efforts.
Sources close to the negotiations say Prime Minister Dean Barrow was first approached shortly after his 2008 Independence Day speech. The negotiations lasted years until it eventually broke down in early 2015. Had GOB accepted the proposal, it would have been the first of its kind at US $100 Million. TNC later offered a far less robust proposal to the Seychelles, an archipelago in the Indian Ocean, worth US $30 Million. Seychelles also agreed to more “deliverables” than were imposed on Belize.
Sources say the government was reluctant to pass legislation that would ban offshore oil exploration so TNC removed it as one of the conditions. GOB later complained about the fund being held offshore out of its reach. When TNC decided to give GOB a seat on the Board it detested because it could not chair or control a majority on the board. Sources also say many of the deliverables outlined by TNC are initiatives already being implemented in Belize.
The nine commitments included the adoption of the Integrated Coastal Zone Management Plan; strengthening Environmental Impact Assessment regulations; adoption of a National Economic Alternatives and Fisheries Diversification Plan; an Action Plan for shark conservation; implementation of mangrove regulations; declaring all remaining cayes as national land as marine protected areas, promotion of sustainable fishing practices; funding and implementing a national monitoring protocol and revision and enforcement of the national Enforcement Strategy.
TNC had also reportedly gotten around US $60 Million in commitments in the event GOB accepted, which it never did. Experts say the deal could have potentially prevented the current restructuring nightmare Belize is currently facing. That is debatable, but surely it could have helped. The TNC debt-for-nature swap would have provided nearly 20 percent relief of Superbond payments. It would have also ensured between US $10-15 Million for marine conservation annually.
Sources have also indicated to BBN that TNC would be open to revisiting the idea but certainly not at the magnitude it had originally proposed. The only condition is GOB would have to approach TNC to open the discussion, not the other way around. Considering the economic windstorm coming, GOB would be wise to consider such a generous offer.
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