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    Sustainability

    A debt conversion for nature for The Bahamas

    Standard Chartered acted as the sole lender and dealer manager in an inaugural transaction for the Bank.

Standard Chartered has partnered with the Government of The Bahamas, The Nature Conservancy, the Inter-American Development Bank (IDB), and other financial partners to launch an innovative debt conversion for nature and climate.  

This is a project of firsts, both for the Group and for the industry at large, and is expected to generate USD124 million for marine conservation.  

Standard Chartered acted as the sole lender in this transaction, underwriting a new USD300 million loan. This demonstrates the strength of our commitment to sovereign clients, sustainability and the development of this asset class.

Bill Winters

Why transactions like these matter 

Often referred to as ‘debt-for-sustainability swaps’, these transactions reduce debt service payments, freeing up capital to support sovereigns’ sustainability goals.

  • Creating fiscal headspace: Debt service payments are reduced.
  • Supporting sovereign priorities: Fiscal resources are freed up to deliver on the sovereign’s specific priorities.
  • Addressing sustainable development needs: Funding is directed towards a range of climate, nature, and social issues.
Hear from Group Chief Executive Bill Winters
Sovereign debt solutions like these create vital fiscal space and help shift financial flows towards sustainable outcomes, which is a priority for us as a Bank.
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Sunil Kaushal
Co-Head, Corporate & Investment Banking, Standard Chartered

In numbers

This is a best-in-class example of how we are able to maximise impact through collaboration with partners across the ecosystem.
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Dennis Eisele
Managing Director, Head Global Credit Markets LATAM, Standard Chartered

A transaction of firsts

This is an important development of the asset class because it is a transaction of firsts.

A group of Standard Chartered colleagues.

This is the first debt conversion for nature for the Bank, which acted as the sole lender, underwriting a new USD300 million loan. 

A family office meeting.

The first time a family office has provided a meaningful component of the credit enhancement package, with Builders Vision (an impact platform founded by Lukas Walton) providing a USD70 million co-guarantee alongside a USD200 million credit guarantee from the IDB. 

An office building in a financial district.

The first time a private insurer has provided credit insurance alongside a Multilateral Development Bank in support of a sustainable issuance for nature and climate, with AXA XL providing USD30 million in credit insurance.  

Marine landscape shot from a drone.

The first time that climate-smart Marine Protected Area (MPA) commitments – which include considerations for managing potential climate change impacts – are explicitly included in conservation outcomes to support climate mitigation and adaptation goals. 

We see a significant opportunity to scale these types of transactions across our markets. Our blended finance expertise and the diversity of our teams means we are poised to replicate.
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Faruq Muhammad
Global Head of Development & Agency Finance, Standard Chartered

Supporting The Bahamas’ conservation ambitions

By buying back USD300 million of its external commercial debt, through the new loan funded by Standard Chartered, The Bahamas is expected to generate an estimated USD124 million for marine conservation. An endowment, expected to grow to USD20 million by 2039, will continue funding marine conservation in The Bahamas beyond the project’s 15-year term.

This will support The Bahamas to effectively manage its unique system of almost 6.8 million hectares of MPAs, complete a national Mangrove Management Plan, and develop and implement a Marine Spatial Plan (MSP) aimed at addressing increased demands for the use of The Bahamas’ ocean using a transparent, participatory and science-based process. Enhancing conservation and management of these areas can help protect extensive coral reefs, seagrass meadows, and mangrove forests – all of which provide critical habitats for diverse species, protect coasts from storms and sustain local livelihoods.

The Nature Conservancy, the world’s largest conservation organisation, mobilised the guarantee package for the transaction and will be providing long-term conservation support to the government. 

We are proud to play an important role in supporting The Bahamas to reach its conservation goals and help its communities adapt to climate change.
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Marisa Drew
Chief Sustainability Officer, Standard Chartered