AXA XL and Enosis Capital Forge Innovative ‘Debt-for-Nature’ Partnership

Enosis Capital, a credit fund, has recently finalized an agreement with AXA XL, enabling the insurance giant to provide essential coverage for a new wave of “debt-for-nature” deals valued at $3 billion. The first of these deals is anticipated to materialize within the next six to nine months.

Debt-for-nature swaps are innovative financial mechanisms designed to assist poorer nations in allocating more resources toward the preservation of threatened ecosystems, such as coral reefs and rainforests. This is achieved by replacing expensive government bonds with more affordable alternatives, thereby freeing up funds for environmental conservation.

Countries like Belize, Barbados, and Ecuador’s Galapagos Islands have successfully implemented such swaps, increasing their popularity. However, the past year has seen a slowdown in these initiatives, largely attributed to the return of climate-change skeptic Donald Trump as president in the U.S., which has influenced key institutions involved in these transactions.

Despite this setback, there remains a strong interest among countries to utilize debt swaps. In response, specialized finance and insurance firms are stepping in, a move that has long been deemed essential for the debt-for-nature swap market to gain traction.

“The view is that we need to have more private sector participation in these deals,” stated Ramzi Issa, co-founder of Enosis Capital, which was established in late 2024 after Issa’s extensive experience in structuring debt-for-nature swaps at Credit Suisse.

He emphasized that the collaboration with AXA XL to provide political risk and similar insurance is crucial for the success of these initiatives. This partnership is part of Enosis’s ambitious $3 billion pipeline of debt swaps and development projects planned over the next four years.

Issa anticipates that the first of these deals will be finalized within the next six to nine months, with a second deal expected before the year concludes. “There is quite a lot of interest in this space,” he remarked, although he refrained from disclosing the specific countries involved due to the sensitivities surrounding the debt market.

Interestingly, the first deal is not expected to follow a traditional debt swap structure. Instead, it will incorporate various “credit enhancements,” such as risk insurance, which are vital for minimizing borrowing costs for participating countries.

Speed Up the Process

This partnership is also part of a broader collaboration with the “Debt For Nature Coalition,” which includes notable organizations such as Conservation International, the World Wildlife Fund, and Leonardo DiCaprio’s Re:wild group.

According to AXA XL’s Jeff Abramson and Stuart Barrowcliff, debt swaps represent a growing area for the insurance firm. They have underwritten several swaps over the past decade and played a significant role in a recent initiative in the Bahamas, where they insured $30 million of a $300 million loan central to the project.

Abramson expressed optimism that this collaboration would help simplify some of the complexities associated with debt swaps, which often prolong the agreement and finalization process. “These deals do tend to have quite a long gestation period,” he noted. “The hope is that we can make this more systematic… to make the crank turn a little faster.”

(Reporting by Marc Jones; editing by Jan Harvey)

Enosis Capital, a credit fund, has recently finalized an agreement with AXA XL, enabling the insurance giant to provide essential coverage for a new wave of “debt-for-nature” deals valued at $3 billion. The first of these deals is anticipated to materialize within the next six to nine months.

Debt-for-nature swaps are innovative financial mechanisms designed to assist poorer nations in allocating more resources toward the preservation of threatened ecosystems, such as coral reefs and rainforests. This is achieved by replacing expensive government bonds with more affordable alternatives, thereby freeing up funds for environmental conservation.

Countries like Belize, Barbados, and Ecuador’s Galapagos Islands have successfully implemented such swaps, increasing their popularity. However, the past year has seen a slowdown in these initiatives, largely attributed to the return of climate-change skeptic Donald Trump as president in the U.S., which has influenced key institutions involved in these transactions.

Despite this setback, there remains a strong interest among countries to utilize debt swaps. In response, specialized finance and insurance firms are stepping in, a move that has long been deemed essential for the debt-for-nature swap market to gain traction.

“The view is that we need to have more private sector participation in these deals,” stated Ramzi Issa, co-founder of Enosis Capital, which was established in late 2024 after Issa’s extensive experience in structuring debt-for-nature swaps at Credit Suisse.

He emphasized that the collaboration with AXA XL to provide political risk and similar insurance is crucial for the success of these initiatives. This partnership is part of Enosis’s ambitious $3 billion pipeline of debt swaps and development projects planned over the next four years.

Issa anticipates that the first of these deals will be finalized within the next six to nine months, with a second deal expected before the year concludes. “There is quite a lot of interest in this space,” he remarked, although he refrained from disclosing the specific countries involved due to the sensitivities surrounding the debt market.

Interestingly, the first deal is not expected to follow a traditional debt swap structure. Instead, it will incorporate various “credit enhancements,” such as risk insurance, which are vital for minimizing borrowing costs for participating countries.

Speed Up the Process

This partnership is also part of a broader collaboration with the “Debt For Nature Coalition,” which includes notable organizations such as Conservation International, the World Wildlife Fund, and Leonardo DiCaprio’s Re:wild group.

According to AXA XL’s Jeff Abramson and Stuart Barrowcliff, debt swaps represent a growing area for the insurance firm. They have underwritten several swaps over the past decade and played a significant role in a recent initiative in the Bahamas, where they insured $30 million of a $300 million loan central to the project.

Abramson expressed optimism that this collaboration would help simplify some of the complexities associated with debt swaps, which often prolong the agreement and finalization process. “These deals do tend to have quite a long gestation period,” he noted. “The hope is that we can make this more systematic… to make the crank turn a little faster.”

(Reporting by Marc Jones; editing by Jan Harvey)