Political Risk Insurance to Support a marine conservation-linked bond in Galapagos

This is a US$ 656 million Galápagos marine conservation-linked bond (Galápagos Marine Bond), arranged and structured by Credit Suisse in partnership with the Government of Ecuador, the U.S. International Development Finance Corporation (DFC), Inter-American Development Bank (IDB), Oceans Finance Company (OFC), and Pew Bertarelli Ocean Legacy. The bond financed a debt conversion for Ecuador, exchanging US$ 1.628 billion of the country’s international bonds for a US$ 656 million loan, with DFC providing US$ 656 million in political risk insurance and IDB supplying an US$ 85 million guarantee. A consortium of 11 private insurers, including Swiss Re, provides over fifty percent reinsurance to support the transaction. Ecuador stands to realize more than US$ 1.126 billion in lifetime savings through reduced debt service costs.

The conversion is estimated to channel US$ 323 million toward marine conservation in the Galápagos Islands over 18.5 years, comprising roughly US$ 12.05 million in new annual funding and approximately US$ 5.41 million per year on average to capitalize an endowment for the Galapagos Life Fund (GLF). This endowment is projected to exceed US$ 227 million by 2041, serving as a permanent funding source for marine conservation beyond the transaction’s term — bringing the total endowment to US$ 450 million for marine conservation.