Axa XL has provided $30 million in credit insurance in support of a pioneering sustainable issuance for nature and climate in the Bahamas.

The Government of Bahamas, the Nature Conservancy, the Inter-American Development Bank and several financial partners have launched a nature bonds project that will refinance $300 million of Bahamas’ external commercial debt to help the country improve ocean conservation and management of its marine protected areas.

It is known as the Bahamas Debt Conversion Project for Marine Conservation.

A spokesman said: “The Bahamas debt conversion project is a project of firsts. It is the first time that a private investor, Builders Vision — an impact platform founded by Lukas Walton — is providing a co-guarantee alongside a multilateral development bank.

“Also, it’s the first time a private insurer, Axa XL, is providing credit insurance alongside an MDB in support of a sustainable issuance for nature and climate.

“In addition, the project marks the first time that climate-smart MPA commitments are included explicitly in the conservation outcomes to support climate mitigation and adaptation goals.”

He added: “By buying back $300 million of its external commercial debt using proceeds from a new competitively priced $300 million loan funded by Standard Chartered, the Bahamas will unlock an expected $124 million of new cash funding [plus an additional estimated $8 million of endowment investment returns] for marine conservation over the next 15 years without adding to the country’s debt.

“The conservation fund endowment, expected to grow to $20 million by 2039, will continue funding marine conservation in the Bahamas beyond the project’s 15-year term.

“The new financing benefits from a comprehensive credit-enhancement package: a $200 million partial credit guarantee from the IDB, alongside a $70 million collateralised guarantee from Builders Vision and $30 million in credit insurance from Axa XL.”

Rochelle Newbold, director, Climate Change and Environmental Advisory Unit of the Bahamas Government, said: “Since 1958, the Bahamas has led in ocean conservation with the establishment of the Exuma Land and Sea Park.

“Now, our nation takes another ambitious step with an economic programme that promotes ocean conservation and benefits local communities.

“By strengthening the protection and management programmes of the marine-protected area system, we will safeguard livelihoods, boost the economy and contribute to global ocean protection goals.”