In 2021, the government of Belize was at risk of defaulting on hundreds of millions of dollars in national debt. But in November of that year, the small Central American country known for its Caribbean beaches and tropical rainforests executed the first of a new generation of debt-for-nature swaps characterized by a complex, blended-finance structure. The U.S. Development Finance Corporation provided $610 million in political risk insurance that enabled Belize to issue a $364 million Blue Bond, attracting new private investment to restructure much of its sovereign debt on more favorable terms. The financial close was announced on the sidelines of the COP26 climate summit in Glasgow, with David Marchick, the Development Finance Corporationโs chief operating officer at the time, calling the collaboration with The Nature Conservancy, the Government of Belize, and Credit Suisse โone of the most innovative examples of climate finance and a model for the future.โ With the resulting savings, Belize committed to redirect tens of millions of dollars in local currency toward long-term conservation goals, fishery and marine park management, and a range of NGO- and community-led projects.
