September 11, 2002

Peru's rare pink river dolphins, the giant river otter, jaguars, scarlet macaws, walking palms, and giant water lilies may be better protected now due to a debt-for-nature swap agreement made between the U.S. Treasury Department and the Peruvian Finance Ministry on June 26, 2002.

For the first time, conservation groups joined with the U.S. government to fund a debt-for-nature swap. Under the agreement, The Nature Conservancy, Conservation International, and the World Wildlife Fund committed a total of $1.1 million and the U.S. government allocated $5.5 million to cancel a portion of Peru's debt to the United States.

In return for the cancellation of $14 million in debt payments over the next 16 years, the Peruvian government committed to spend $10.6 million of their local currency for conservation work. These funds will be distributed to local Peruvian conservation groups to use in the protection of 10 tropical rainforest areas covering more than 27.5 million acres within the Peruvian Amazon — about the size of the state of Virginia.

The Tropical Forest Conservation Act of 1998 set the stage to fund this debt-for-nature swap. According to Treasury Department Under Secretary for International Affairs John Taylor, today's agreement is the second U.S. debt-for-nature swap, and the fifth agreement arranged under the Tropical Forest Conservation Act.

"We are still looking to extend the benefits of the program," said Taylor. "We have already seen agreements with Bangladesh, Belize, El Salvador, and Thailand; we expect to conclude an agreement with the Philippines this year" (Environmental News Service).

For a more information, see Peru Swaps Debt.