U.S.-Peru Debt-for-Nature Swap

Ten of the most biologically diverse yet critically endangered rainforests in Peru will escape deforestation thanks to a landmark debt-for-nature swap The Nature Conservancy helped facilitate in June 2002.

With partial contributions from the Conservancy, Conservation International and the World Wildlife Fund, the U.S. government forgave $6.6 million of Peru's debt. In exchange, Peru agreed to commit approximately $10.6 million of their debt savings to conservation initiatives over the next 12 years. The funds enable preservation of more than 27.5 million acres of rain forest that provide a habitat for rare species like scarlet macaws, jaguars, and pink river dolphins.

Curculionido © Heinz Plenge

Ecological Significance: Peru is one of the most biologically diverse areas on Earth. Thousands of plant and animal species unique to South America reside in Peru's vast tropical rain forest acreage. But escalating deforestation for timber, grazing land and development threaten Peru's rain forests and its endangered species. The Peru debt-for-conservation swap will protect a rain forest area the size of Virginia from habitat loss and poaching.

Tropical rain forests do more than shelter plants and animals—they improve air quality by reducing atmospheric carbon dioxide, and affect climate by regulating rainfall and water evaporation. The rain forests protected by the Peru swap will cultivate healthier air, water runoff, and land habitats, and will protect a diversity of life found nowhere else.

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Trees along Rio Heath © Gary Braasch

Strategic Importance: Developing countries often accelerate their export of natural resources like timber and minerals to pay off foreign debts, which causes an increase in unsustainable logging, mining and poaching. Because a portion of its debt is forgiven, Peru will not need to exploit its natural resources to pay off its debt to the United States. For every $1 in U.S. funds, almost $2 will be spent on conservation programs in Peru, according to the White House.

Partners: U.S. government, Peruvian government, Conservation International, World Wildlife Fund. The Nature Conservancy donated $370,000 toward Peru's debt, and has previously participated in debt-for-nature swaps in Bolivia, Brazil, Costa Rica, Dominican Republic, Ecuador, Guatemala, Jamaica.

Plans: Funding for conservation and sustainable development projects will go to Peruvian conservation organizations with successful track records for managing donated funds wisely. With funds gained from the swap, these groups will set aside parks and reserves, design better ecosystem management practices, train conservationists, develop sustainable use programs, research medicinal properties of tropical forest plant life, and create conservation jobs for locals.

Facts:

• Size: more than 27.5 million acres (about the size of Virginia)
• Animal Species: 1,800 bird species, rare pink river dolphins, jaguars, scarlet macaws
• Plant Species: 20,000 species of vascular plants including walking palms and giant water lilies