UK fund giant funds $1B for global nature projects

Britain’s largest asset manager, Legal & General (L&G), has pledged up to $1 billion over five years to become a key investor in a new wave of debt-for-nature swaps in developing countries. These swaps help governments reduce debt payments so more funds can go toward conservation.

The market has slowed in recent years after U.S. government support waned, but L&G aims to revive it with backing from Enosis Capital, environmental NGOs, and insurance giant AXA XL. Jake Harper, L&G’s senior investment manager, said the firm could serve as the cornerstone or sole funder of upcoming swaps, News.Az reports, citing Reuters.

The $1 billion commitment nearly doubles L&G’s total investment in emerging-market conservation to $2.4 billion, making the firm a major player in a niche market where just $6 billion in swaps occurred over the past five years. L&G has previously supported deals in Ecuador, Belize, and Gabon.

Debt-for-nature swaps typically buy back expensive government debt and replace it with cheaper bonds, backed by credit guarantees to shield investors from political risk. Global wildlife populations have fallen 73% since 1970, highlighting the urgency of conservation funding.

Ramzi Issa, co-founder of Enosis Capital, said combining L&G, AXA XL, and NGOs provides countries with an almost ready-made investor group. Around a dozen swaps are currently in development. Harper added some funds could also support emerging initiatives such as debt-for-education or debt-for-food deals, reflecting a growing trend among UK investors to channel capital into sustainable projects in emerging markets.

News.Az 

By Aysel Mammadzada