World’s First Nature Bonds Project Reaches Final Step in Seychelles

Changes in annual weather and temperature patterns pose a significant threat to the island nation—from increased flooding, landslides and coastal erosion, which threaten human lives and infrastructure, to rising ocean temperatures that endanger coral reefs.

And like any nation dependent on the ocean, Seychelles needs to protect the long-term survival of its valuable marine ecosystems while still allowing for important economic uses—such as fishing and tourism.

The $21.6 million debt conversion provided three important enabling elements to help the nation address the long-term health of its ocean and blue economy in a changing climate: the refinancing of sovereign debt to unlock funds for conservation, the creation of the independent Seychelles Conservation and Climate Adaptation Trust (SeyCCAT), and the launch of a government-led, TNC-supported process to plan for expanding biodiversity conservation and increasing the effective management and use of Seychelles’ ocean. 

Local Decision-Making and Innovation

In Nature Bonds projects, like the one in Seychelles, a participatory, multi-stakeholder approach ensures outcomes that reflect local values and priorities. Ecosystems are mapped and the priorities of each sector—from fisheries to tourism, energy and recreation—as well as civil society, are considered when designating areas for different protection and use categories.

“The solutions that are developed in this decision-making process have a greater hope of working,” says Sims, “because people are engaged and feel ownership of the process itself.”

The Seychelles Marine Spatial Plan Initiative was not an easy undertaking. There were many challenges to work through along the way, difficult decisions, differences of opinions and hundreds of meetings. But the result was more comprehensive, adaptable and durable.

“We have found out that there is a lot more alignment from the players who operate in this space compared to disagreements,” says Minister of Agriculture, Climate Change and Environment Flavien Joubert. There is an understanding among local and international parties that live and operate in Seychelles that resources are finite, and they are shared, he says.

The independent trust fund, SeyCCAT, managed the funds from the debt conversion, supported the government-led planning process, and advanced local understanding and innovation. It also provided a structure that made it possible for the country to attract additional funding to support the high costs of long-term marine conservation and management.

Through its Blue Grants Fund, SeyCCAT has distributed $5.3 million in funding—from the debt conversion and other sources—in the form of small grants to 96 local projects. Projects have included research in marine protected areas, a voluntary fishery closure, the development of an aquaculture businesses, and an exploration of methods to help communities deal with climate change.

“As a small island, it’s very easy for us to trial things that are scaleable,” says Jeremie. “Locally driven actions—from local solutions. Local ideas. But, more importantly, from Seychellois… It doesn’t get better than that.”

Building the Boat as It Sailed

Marine spatial planning was a young field when Seychelles and TNC started working together in 2014. “There were few other countries doing marine spatial planning at this scale—for multiple uses across a country’s entire exclusive economic zone,” says Joanna Smith, director of ocean planning and mapping at TNC.

Initially, people were doubtful that it could be done, says Sims. The Seychelles ocean is massive, and the idea of creating a marine spatial plan (MSP) was innovative and new at the time. But as facilitator of the government-led process, TNC brought six years of experience in marine spatial planning and decades of experience in marine conservation in areas ranging from the expansion of marine protected area networks to fisheries, ecosystem services analysis and more. In addition, Seychelles had more than 40 years of experience with marine protected areas, fisheries and maritime security.

“For the MSP, we used global best practices,” says Smith. And learnings from the process helped advance the practice for others in the growing field. “Seychelles has been incredibly generous with sharing lessons learned and information in real time with other MSP practitioners around the world,” says Smith.

Not only was Seychelles able to carry out a highly consultative process—across multiple changes in government and a Covid outbreak, with competing pressures on land and at sea and limited resources—it developed a rigorous, broadly supported plan and signed it into law. 

A Legacy for Generations of Seychellois

“We have learned that we can do a lot more than we think we can do,” says Minister Joubert. “We have surprised ourselves by going this far with so little in terms of human resources, human capacity and even financial resources. We have learned that we have the capacity to go out to get the attention of partners and to do meaningful things with our partners.”

A significant outcome of the debt conversion and the Seychelles Marine Spatial Plan was the creation of new marine protection areas, bringing the total portion of Seychelles exclusive economic zone that is protected up to 32.8% from 0.04%. Although countries have since committed to 30% goals for nature, when Seychelles started its planning process in 2014, countries had only agreed on a 10% global goal for oceans. Even then, Seychelles was leading the way.

Different protection zones—including those that are fully protected and those where sustainable uses are conditionally allowed—will benefit species such as humpback whales, manta rays, sharks, endangered sea turtles, and commercially important fish like tuna. Protections also boost Seychelles’ natural defenses against ocean warming, acidification and biodiversity loss, and support the health of the larger Western Indian Ocean.

The rest of Seychelles ocean—more than 907,000 km²—will be managed as multiple use zones, with measures to improve sustainability, reduce bycatch and overfishing, use vessel monitoring systems, and avoid spawning aggregation sites.

These regulations will have significant benefits for fishing and tourism, which are highly dependent on healthy reefs and fish populations and support 45% of Seychelles’ workforce.

There are additional benefits to the economy and the country as a whole that come from the capacity-building part of marine spatial planning, points out Minister Joubert. “When you develop people who can really manage complex systems, you actually create a lot more skilled people who are able to take up huge responsibilities in your country or even outside and who can work with partners who operate at a very high level,” he says.

An Example for the World to Follow

Signing the Seychelles Marine Spatial Plan into law marks the final milestone in the first-ever debt conversion for ocean conservation that led to the formation of TNC’s successful Nature Bonds Program. The program now has projects in implementation in six countries and has unlocked roughly $1 billion for conservation. Through this achievement, Seychelles has shown what is possible with courage, ambition and commitment.

“What we've learned is that a small country—with the right resources and thinking strategically and picking the right partners, working the right way and also setting yourself ambitious targets—you should be able to do large-scale ocean management,” says Minister Joubert.