The Tribune

By Leandra Rolle

Tribune Chief Reporter

lrolle@tribunemedia.net

THE Davis administration on Friday launched a transformative initiative to refinance $300m of external debt, aiming to enhance marine conservation amid the growing threat of climate change.

The project, called the Debt Conversion for Marine Conservation, was announced by Prime Minister Philip “Brave” Davis during a press conference at Baha Mar resort. 

Supported by the Inter-American Development Bank (IDB), The Nature Conservancy, Standard Chartered Bank, and other partners, the initiative is expected to save an estimated $124m over 15 years.

These savings will fund the strengthening of marine protected areas, critical conservation projects, and the protection of vital ecosystems. 

The initiative also leverages guarantees from the IDB, Builders Vision, and AXA XL to secure favourable financing terms. Additionally, a $20m endowment, projected to grow by 2039, will ensure the longevity of these climate protection efforts.

Highlighting the initiative’s benefits, Mr Davis said: “For the fishermen who rise before dawn, this project means sustainable waters teeming with life. For families living along our coasts, it means protection from storm surges and rising seas. For our children, it means a chance to inherit a Bahamas where natural beauty is preserved, and economic opportunities abound.”

Economic Affairs Minister Michael Halkitis outlined the debt conversion process, explaining that The Bahamas repurchased $300m of its external debt in US dollars to acquire outstanding euro bonds through a public tender, using funds from a Standard Chartered Bank loan.

He said the project is part of the government’s debt management strategy focused on structuring innovative financing transactions that leverage official support and lower the country’s financing costs.

“The transaction marks the second transaction as part of the building a social and inclusive blue economy in The Bahamas, in collaboration with the IDB, the first part of which leveraged a $200m guarantee to raise $500m in the international loan market that was completed earlier this year,” Mr Halkitis said.

“The operation was funded by a 15-year fully underwritten $300m loan from Standard Chartered Bank, and benefited from a comprehensive credit enhancement package, a $200m, credit guarantee from the IDB, a $70m collateralised guarantee from builders’ vision and $30m in credit insurance from AXA XL.”

Mr Halkitis further highlighted the project’s groundbreaking elements, including its status as the first debt-for-nature initiative to specifically link marine protected area commitments to conservation outcomes. 

He also noted the special involvement of key private sector players, such as Builders Vision, founded by Lucas Walton, and AXA XL, providing co-guarantees and credit insurance alongside multilateral development banks for the first time.

“And this new financing also features a natural disaster and Pandemic event clause, advancing the government's climate resilience efforts and providing liquidity headroom in the case of adverse climate events,” the minister added.

Through this innovative approach, Mr Davis said his government is “rewriting the rules of engagement for climate resilience and conservation.”

He also hailed the initiative as a significant step in addressing global challenges through partnership and innovation.

“The Bahamas is showing the world that we are not passive spectators to the forces of nature—we are active stewards of our destiny,” the prime minister added.  “Standing still is the luxury of those unscathed by climate’s wrath. But for us, every rising tide and every storm is a clarion call to act, to adapt, and to innovate. In forging these partnerships, we are not merely addressing the present crisis; we are building a foundation for resilience that will endure for generations.”

Shirley Gayle, Country Representative for The Bahamas at IDB, (IDB), expressed pride in the bank’s role in facilitating the partnership.

She emphasised that the transaction aimed to achieve dual goals: providing fiscal support for The Bahamas while delivering tangible environmental benefits.