As Government seeks to enter into a debt-for-nature swap to help fund marine conservation efforts, lawmakers are giving the assurance that it will not cost taxpayers a cent.
Minister in the Ministry of Finance Ryan Straughn explained that the debt swap arrangement, which is being entered into with CIBC FirstCaribbean and Credit Suisse International at BDS$150 million each, was to allow government to buy back a portion of its existing debt at a lower interest rate – both Eurobonds and Series E bonds.
He said that it is the interest payment saved that would be diverted to the Barbados Environmental and Sustainability Fund over the next 15 years for the marine conservation plans.
This is being made possible with a guarantee by the Inter-American Development Bank for up to $200 million and The Nature Conservancy for up to $100 million.
“This will not impact the budget of the Ministry of Environment,” Straughn assured Tuesday’s sitting of the House of Assembly.
“Since we were already committed to paying a portion in interest, in exchange for buying back the debt at a lower interest rate, the commitment is that we will divert a portion of the existing interest payment to do some marine conservation work that is critical to be able to help sustain and build out the blue economy in Barbados,” he said.
Straughn told lawmakers that the savings from the existing debt payments were estimated to be between US$30 million and US$40 million, depending on the rate on the close of day on September 20, 2022.
“Therefore, over the next 15 years, once we close this transaction, the Barbados Environmental and Sustainability Fund will receive those debt service payments as they come due,” he said, stressing that it was not a government fund.
Minister of Environment and National Beautification Adrian Forde said the country was closer to developing a comprehensive marine spatial plan. He also assured Barbadians that the debt-for-nature swap would not cost them a cent.
“I want to say to Barbadians today that this new deal, this Bajan deal, will not cost them a cent. It will not cost their children a cent, it will not cost their children’s children a cent,” assured Forde.
“The commonsense about this is that we are, by allowing us to use the interest being saved on a deal for Barbadians, we are going to build out not only a marine spatial plan but an ecosystem management plan across this country that will seek to ensure that the existential threats we are facing as a nation are minimised and at best, that we are able to neuter them,” he said.
Noting that a lot of research has gone into the development of a marine spatial plan over the past three-and-a-half years, Forde said a wide cross section of stakeholders and specialists had an input.
He explained that it would consist of several components over the next three to five years, with the first focusing on biodiversity preservation.
The marine spatial plan will divide Barbados’ exclusive economic zone into areas based on their “true potential”, he said. There will be areas for research, wind energy, oil and gas exploration and drilling, fishing, shipping and docking, protection of species and reefs and corals, jet ski operations, diving and recreation, among others.
Forde, who linked illegal dumping, the use of certain chemicals and the invasion of the menacing sargassum seaweed to dwindling marine species, expressed concern about rising sea levels and its impact on the ocean space.
“We have lost about 50 something species of fish thus far in the marine environment and serious loss of our biodiversity, not only the fauna but flora as well. There are certain phytoplankton and plants at the bottom of the ocean that we are seeing no more,” he said.
Meanwhile, former Minister of Maritime Affairs and Blue Economy Kirk Humphrey, who is now Minister of Elder Affairs, said the establishment of the Barbados Environmental and Sustainability Fund was critical as the country seeks to protect and capitalise on its marine space.
“I am convinced that beyond the money that we get from the debt swap, Barbados will be able to finance the operations of the marine space from investment from other people – private and otherwise – because we have set up this fund,” said Humphrey.
“We now present to the people of Barbados a deal that will cost them nothing more, that has the guarantee of both the IDB and TNC [The Nature Conservancy] . . . that allows us to work through CIBC and Credit Suisse to be able to do it, and everybody feeling fairly protected, and all that is left for us to do is to deliver,” he said.
The ministers were speaking in Parliament during debate on the resolutions to supplement the Debt Conversion (Counter-Guarantee) Act and the Special Loans Act Cap 105 (Marine Conservation), which were recently passed.