Seychelles and the debt-for-nature swap |12 July 2021

Minister Joubert (bottom left) among other speakers during the webinar

Following a recent webinar, the Minister for Agriculture, Climate Change and Environment Flavien Joubert explained the benefit of the Seychelles Conservation and Climate Adaptation Trust’s (SeyCCAT) abilities in funding sustainable projects.

The webinar, which took place on July 7, was co-hosted by the International Institute for Environment and Development (IIED), an independent research organisation and E3G, a European climate change not-for-profit company, which goal is to translate climate politics into action.

The webinar saw the participation of Minister Joubert and other representatives from both organisations.

The main topic of discussion was the burden of debt on low-and middle-income countries which has worsened due to the Covid-19 pandemic which, as a result, has compelled many governments to divert their investment in getting the pandemic under control.

The debate team explored what is needed to finance a safer, more resilient and cleaner environment (green recovery) as well as the primary role of the debt relief and special drawing rights (SDRs), which is an international reserve asset for climate and nature action.

Minister Joubert shared Seychelles’ experience on the debt-for-climate swap so far and the fact that the obligations of the deals are being met with the repayment of the impact loan, the disbursement of funds through a grants facility of the Seychelles’ Conservation and Climate Adaptation Trust’s (SeyCCAT), Blue Grants Fund and a long-term investment through an Endowment Fund. The ground results are more clearly seen through the disbursement of grants to support non-governmental organisations that would otherwise have been dependent on external funding, supporting research and the uptake of sustainable aquaculture and supporting micro-small-medium enterprises to diversify their businesses with the Blue Economy.

“The whole scheme has worked for Seychelles and its delivery on some of the results. Crucially it is providing a lot of space for people and groups who would like to get involved in conservation and climate adaptation activities to actually get on with the different activities, which moves faster than it would have if we were just depending on external finance,” said Minister Joubert.

In view of Seychelles’ experience, the minister urged donor countries in the Great 20 (G20) to explore the opportunities offered by SDRs as this would offer small island developing states a lifeline, especially as countries suffer the fate of Covid-19 impacts.

“However, this is not a solution for all the debt; this is only part of the debt and now with the Covid pandemic there is a sharp downturn in the tourism sector. The debt to GDP ratio has gone up sharply, we are faced once again with dealing with the future when it comes to climate and biodiversity loss, and coming out of Covid at the same time. We are a 70% debt in GDP ratio, we have to go back and have a look at what is possible. I believe a proposal that is being debated in using special drawing rights (SDR) is in the right direction and could be an additional lifeline for small islands and countries that are facing this deadly stress. I will urge our partners on the outside especially the Great 20 (G20), to take a look at these options. Seychelles as a high-income developing country has limited access to finance. This will be a good opportunity to have other options on the table, which is a step in the right direction. I think it’s something which we will continue to explore and develop over time and hopefully in the near future I would be able to offer that to some of the countries in the same situation as Seychelles.”

The webinar lasted for an hour and the speakers discussed alternative ways of financing mechanisms such as dept cancellations, special drawing rights (SDRs) which will benefit countries like Seychelles in their green recovery. The speakers also answered some interesting questions from viewers.

Press release from the Ministry of Agriculture, Climate Change and Environment