There’s news today that the U.S. has forgiven $25 Million of Peru’s foreign debt in exchange for tropical forest conservation. This debt forgiveness is part of the U.S. Tropical Forest Conservation Act (TFCA) of 1998. The act aims to protect ecosystems in tropical forests and to date a total of $188 Million of debt has been forgiven for countries in tropical regions.
Countries that currently qualify for TFCA funds include Bangladesh, Belize, El Salvador, Panama, Peru, and the Philippines. Among the qualifications that countries must meet in order to participate are a democratically elected government, no support of terrorism, and no human rights violations.
The funds are structured as debt reduction, debt buyback or debt-for-nature swap. The act encourages public-private partnerships and the activity of conservation NGOs.
Three of the agreements to date have included funds raised by U.S.-based NGOs in addition to appropriated debt reduction funds. The Nature Conservancy (TNC) contributed about $1 million to the Belize agreement, which set aside 23,000 acres of new forest preserves and provides support for local NGOs managing 270,000 acres of national reserves. TNC, the World Wildlife Fund, and Conservation International together contributed about $1.1 million to the Peru agreement, which has already generated $200,000 in grants for training and capacity building to manage two protected areas. TNC contributed about $1.2 million to the June 2003 TFCA agreement with Panama, to help preserve the Chagres River Basin, a high biodiversity tropical forest that is also the major source of water for the Panama Canal.
