Appleby acts on landmark Seychelles
environmental deal

26 April2016

 

Seychelles Government makes a commitment to enhance marine conservation and climate adaptation in the first of its kind debt-swap deal agreed between the Government of Seychelles and its Paris Club creditors.

The debt, to be bought back by Seychelles from the Paris Club at a discount-to-face-value under the terms of an unprecedented agreement, will be converted into new Government of Seychelles debt to be issued to the newly created Seychelles Conservation and Climate Adaptation Trust (SeyCCAT). Over a 20 year period, the proceeds of this debt will be used to: (i) finance marine conservation and climate adaptation in the Seychelles; (ii) capitalise an endowment to finance work in the future; and (iii) repay impact investors.

NatureVest* is acting to mobilise a US$78 million sovereign debt swap for the government of the Seychelles in exchange for a commitment to invest in climate adaptation and marine conservation projects in Seychelles, including expanding and improving management of marine protected areas; improved coastal zone management, fisheries, and marine policy and regulatory protection regimes; coral and mangrove restoration projects; and others. Once complete, this project will result in the Indian Ocean’s second largest marine reserve, with approximately 400,000 square kilometres of the Seychelles territorial waters classified as marine protected areas and 200,000 square kilometres classified as fish ‘replenishment grounds’.

The landmark agreement triggers a US$31 million funding package that will benefit critical marine conversation work in Seychelles. It marks not only the first time the Paris Club has supported a debt operation designed to benefit the environment, but also creditor participation in the agreement is the highest ever achieved in a buyback deal reached through the Paris Club’s market-based window, including also the first time a southern creditor (South Africa) has participated in a buyback operation involving the debts of another southern country.

The Appleby team was led by Malcolm Moller and assisted by Karishma Beegoo. Ropes & Gray LLP advised TNC and Clifford Chance acted for the Government of Seychelles.

*About TNC’s NatureVest: NatureVest is a new initiative of the Nature Conservancy, which, in collaboration with founding sponsor J.P. Morgan Chase & Co., aims to transform the way we manage, invest in and sustain our natural capital.

For further information please contact Alexandra Yvon.

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