Political Risk and Parametric Catastrophe Insurance in relation to a Blue Bond for Ocean Conservation in Belize

Area characterisation:

Marine

Objective:

Enable debt swap for ocean conservation funding.

Start/end date:

1 January 2021

Financing:

Public-Private-Partnership

Potential impacts/benefits:

$90M for marine and biodiversity protection over 20 years
Parametric catastrophe insurance embedded in sovereign debt
Climate resilience for Belize's blue economy

Actions:

Provided US$610m political risk insurance to enable a US$364m Blue Bond debt swap and introduced parametric catastrophe insurance to Belize's debt stock, generating funding for marine and biodiversity protection.

Organisations:

Government of Belize, The Nature Conservancy (TNC), Credit Suisse, Allianz, Munich Re, U.S. International Development Finance Corporation (DFC), BBIC SPV, NatureVest.

Contacts:

Case study referred by UNEP FI. For more information, please contact: info@naturance.eu.

$610 million in political risk insurance enabled a $364 million Blue Bond for Ocean Conservation in Belize. This will generate an estimated $90 million over 20 years to invest in marine and biodiversity protection and promote climate resilience in Belize's blue economy. The debt swap also introduced parametric catastrophe insurance to Belize's external debt stock at a cost of about $800,000 per year on average for Belize.