By Sabrina Fernandes
News Americas, NEW YORK, NY, Mon. Oct. 20, 2025: The Galápagos Islands harbor some of the most unique ecosystems on the planet and yet it is now a place for greenwashing debt. Their isolated location in the middle of the Pacific Ocean has allowed species to evolve independently from their relatives on the mainland over millions of years. Creatures such as Darwin’s finches, giant tortoises, and marine iguanas are found only on the Galápagos Islands. It was here, 600 miles west of the South American mainland, that Charles Darwin gathered insights that shaped his theory of evolution.
Tourist group exploring the Galapagos Islands.
In 1959, the Ecuadorian government founded the Galápagos National Park, protecting around 97 percent of the archipelago’s landmass. It was the country’s first national park. In 2022, the government expanded the Galápagos Marine Reserve by 60,000 km² with the creation of the Hermandad Marine Reserve, bringing the total protected area to 198,000 km²—almost half the size of mainland Ecuador. But there was a problem: The Ecuadorian state lacked the funding required to protect this vast marine territory.
In May 2023, President Guillermo Lasso therefore announced the largest debt-for-nature swap in history. The Ecuadorian state bought back bonds worth $1.63 billion from international bondholders at a discount and exchanged them for a new loan of $656 million to be invested in marine conservation. The government hailed the deal as a “historic agreement” that would help to protect endangered species such as whales and turtles, as well as promote sustainable fisheries and strengthen climate resilience. Ecuador was as wealthy as any of the richest countries in the world, the Ecuadorean foreign minister said, “but our currency is the biodiversity.” The idea behind debt-for-nature swaps is simple: a heavily indebted country like Ecuador reduces its debt burden, while promising to allocate funds to environmental or marine conservation. In doing so, nature is increasingly treated as a tradable commodity. It seems like a win-win outcome: But who truly benefits from this arrangement?
“We had no idea there was a debt-for-nature swap—we found out about it through social media,” says Patricia Moreno, a human rights and environmental activist who lives on San Cristóbal, the easternmost island in the Galápagos Archipelago. Home to around 6,000 people, it has the second-largest human population in the islands. Moreno says that islanders are routinely excluded from the conversation when it comes to conservation. “We exist,” she says. “And we are more than just predators.”
Moreno remembers when former president Lasso visited the Galápagos Islands in 2023 to announce the agreement. At the time, residents were already protesting a supply crisis. A recent shipwreck had disrupted deliveries, leading to shortages of basic goods like eggs, rice, and potatoes. Located hundreds of miles off the Ecuadorian coast, the islands rely on shipments of food and fuel from the mainland by ship and plane. “People were already angry,” Moreno recalls. “And when we learned about the debt-for-nature swap, we got even angrier. We had no information about it. Some even thought that the islands had been traded away and now belonged to another country.”
Moreno says the public wasn’t consulted on the agreement, nor were Galápagos residents invited to the president’s announcement. Only political authorities and tourism industry representatives were present. “We felt like we meant nothing,” she adds. Moreno began organizing with other islanders to find out what the debt-for-nature swap was really about and reclaim their right to information, consultation, and participation.
Gambling with Government Debt is Lucrative
The Galápagos Islands debt-for-nature swap was the largest to date, but it was not the first. These types of deals have been around since the 1980s. Bilateral debt-for-nature swaps involve one country negotiating directly with one another to forgive or restructure debt in return for conservation commitments. Commercial swaps involve private third parties—such as NGOs, investment firms, or banks—purchasing discounted government bonds from the debtor country on the secondary market. Commercial swaps have taken place in the Seychelles, Belize, Barbados, and, most recently, in Ecuador.
In the case of Ecuador’s Galápagos deal, the investment bank Credit Suisse facilitated the buy-back of more than $1.6 billion in sovereign bonds for the Ecuadorian government. These bonds had fallen in value due to Ecuador’s high national debt and political instability, making them attractive for re-purchase. Although the exact bondholders are not publicly known, they likely include international investment funds, insurance companies, and pension funds.
To finance the buyback of the bonds, a special purpose vehicle (SPV) called GPS Blue Financing was established in Ireland, known for its favorable tax regime. This entity issued a new set of “Galápagos Marine Bonds.” In this transaction, Ecuador was the borrower, GPS Blue Financing was the lender, and the Bank of New York Mellon acted as the facility agent, a kind of intermediary. According to Bloomberg, one of the major investors in the new bonds was the Swedish pension fund Alecta, which has faced criticism for high-risk investments and allegations of corruption. Alecta was also involved in the 2021 Belize swap, which was similarly arranged by Credit Suisse. Credit Suisse was the leading bank to arrange debt-for-nature swaps for a long time, until it collapsed in 2023 following several bribery scandals, after which it was taken over by another bank.
To reduce the risk for investors and lower the cost of borrowing for the Ecuadorian state, the U.S. Development Finance Corporation provided a $656 million guarantee in the event of default—equal to the total value of the bonds. Additionally, the Inter-American Development Bank (IDB) provided $85 million to cover the first six interest payments if Ecuador defaulted. These guarantees mean that investors bear very little financial risk, while banks can market the deal as a commitment to marine conservation.
After Credit Suisse collapsed in 2023, its former head of debt-for-nature swaps, Ramzi Issa—who handled the Galápagos deal—founded his own company in 2025: Enosis Capital, a so-called impact credit fund specializing in sustainable financial transactions. Business is booming because gambling with government debt is lucrative. Investors are keen to sell government bonds issued by highly indebted countries in the Global South—known in financial jargon as “junk-rated issuers”—at a good price. Wealthy investors and banks buy debt cheaply, secure public guarantees, and profit from restructuring it into conservation-based loans.
Meanwhile, it was these same Western financial institutions, backed by U.S. monetary policy, that caused the debt crisis in the Global South in the first place, by offering high-interest loans on predatory terms.
Despite this backdrop, the United Nations, the World Bank, the European Union, and U.S. conservation organizations are presenting debt-for-nature swaps as a promising solution to the biodiversity conservation funding gap. At the UN Biodiversity Conference in Colombia in October 2024, groups like The Nature Conservancy, World Wildlife Fund (WWF), The Pew Charitable Trusts, Conservation International, and Re:wild formed a coalition to advocate for these instruments. In a joint statement, they described debt-for-nature swaps as “a win-win for governments, local communities, and nature,” and as “one of the largest potential sources of funding to help achieve the global climate and nature goals.”
The Myth of the “Win-Win”
The new wave of debt-for-nature and debt-for-climate swaps is being framed by Global North institutions as a solution to both sovereign debt crises and conservation funding shortfalls. These instruments, they argue, can channel new financing into developing countries with high biodiversity by turning ecological stewardship into a service that wealthier nations pay for—while incentivizing creditors to offer debt relief. This is an important debate in the context of climate and development policy because the lack of adequate funding for biodiversity conservation remains an urgent and unresolved issue. But behind the technocratic language of innovation and efficiency lies a deeper political question: who benefits, and who bears the burden?
The Kunming-Montreal Global Biodiversity Framework, adopted in 2022, calls for protecting 30 percent of land and marine areas by 2030—a goal commonly referred to as “30 by 30.” The framework also stipulates that those countries most responsible for ecosystem destruction—wealthy, industrialized nations—should provide financial support for conservation efforts in poorer countries. But according to a report on debt-for-climate swaps by the Latin American Network for Economic, Social and Climate Justice (LATINDADD), 80 percent of climate finance is delivered in the form of loans. This allows rich countries to shift the burden to the private sector while avoiding the use of public funds. “Many countries in the Global South spend less than one percent of their budget on environmental protection, but more than 20 percent on debt servicing,” says Carola Mejía, an economist with LATINDADD. “Debt-for-nature swaps distract from the fact that the countries responsible for the climate and environmental crises are not fulfilling their international commitments.”
Mejía argues that instead of promoting new debt instruments, the international community should prioritize financing mechanisms for climate mitigation and biodiversity conservation that do not generate new debt. As the main perpetrators of the climate crisis, industrialized countries in the Global North should meet their obligations and provide funds directly in the form of grants or reparations. Together with LATINDADD, Mejía supports the global movement “Debt for Climate,” which campaigns for debt relief for countries in the Global South. “Debt is a neo-colonial mechanism that controls our countries,” she says. Debt-for-nature swaps reinforce the narrative that debt is the fault of countries in the Global South, rather than the result of exploitative practices by powerful nations and international financial institutions. In this sense, swaps often serve as a tool for greenwashing and perpetuating debt.
EDITOR’S NOTE: Sophia Boddenberg is a journalist from Germany based in Latin America since 2014. With degrees in journalism and Latin American social and political sciences, she reports from Santiago de Chile and Buenos Aires for outlets like ZEIT, Deutschlandfunk an Deutsche Welle, focusing on economic injustice, ecological conflicts and feminist struggles in Latin America.
The article is syndicated in partnership with the North American Congress on Latin America (NACLA). This piece appeared in the Fall 2025 issue of NACLA’s quarterly print magazine, the NACLA Report.
