Debt-for-Nature Initiatives and the Tropical Forest Conservation Act (TFCA): Status and Implementation

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Debt-for-Nature Initiatives and the Tropical

Forest Conservation Act (TFCA):

Status and Implementation

(name redacted)

Specialist in Natural Resources Policy

Updated July 24, 2018

Congressional Research Service

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www.crs.gov

RL31286

Debt-for-Nature Initiatives and the Tropical Forest Conservation Act

Summary

In the late 1980s, extensive foreign debt and degraded natural resources in developing nations led

to the creation of debt-for-nature initiatives that reduced debt obligations, allowed for debt

repayments in local currency as opposed to hard currency, and generated funds for the

environment. These initiatives, called debt-for-nature swaps typically involved restructuring,

reducing, or buying a portion of a developing country’s outstanding debt, with a percentage of

proceeds (in local currency) being used to support conservation programs within the debtor

country. Most early transactions involved debt owed to commercial banks and were administered

by nongovernmental conservation organizations and referred to as three-party transactions. Other

debt-for-nature initiatives involved official (public) debt and were administered by creditor

governments directly with debtor governments (termed bilateral transactions).

In the early 1990s, the United States initiated a program called the Enterprise for the Americas

Initiative (EAI), which involved debt-for-nature transactions. The United States restructured, and

in one case sold, debt equivalent to a face value of over $1 billion owed by Latin American

countries; these transactions were authorized by Congress as part of the EAI, which broadened

the scope of debt transactions to include a number of social goals. Nearly $177 million in local

currency for environmental, natural resource, health protection, and child development projects

within debtor countries was generated from these transactions.

The model for debt-for-nature transactions, outlined in the EAI, was used in the Tropical Forest

Conservation Act (TFCA; P.L. 105-214; 22 U.S.C. 2431) to include countries around the world

with tropical forests. Under this program, debt can be restructured in eligible countries and funds

generated from the transactions are used to support programs to conserve tropical forests within

the debtor country. TFCA authorizes the use of debt swaps, debt restructuring, and debt buybacks

to generate conservation funds. Under these agreements, the existing debt agreement is canceled

and a new one is created; a Tropical Forest Agreement is created and interest payments for the

principal of the loan are deposited in local currency equivalents in a Tropical Forest Fund; and the

money in the fund is given in the form of grants to local conservation groups or the debtor

government to conduct conservation activities for tropical forests.

Eligible conservation projects include (1) the establishment, maintenance, and restoration of

parks, protected reserves, and natural areas, and the plant and animal life within them; (2) training

programs to increase the capacity of personnel to manage parks; (3) development and support for

communities residing near or within tropical forests; (4) development of sustainable ecosystem

and land management systems; and (5) research to identify the medicinal uses of tropical forest

plants and their products. Since 1998, $233.4 million has been used under TFCA to restructure

loan agreements in 14 countries (20 transactions), and over $339.4 million will be generated for

tropical forest conservation at the conclusion of these agreements. TFCA was authorized to

receive appropriations through FY2007, but no funds have been appropriated for the program

since FY2014. TFCA is being considered for reauthorization in the 115th Congress in S. 1023.

This bill would expand the purpose of TFCA to include coral reefs and authorize $20 million in

appropriations annually from FY2018 to FY2021, among other things.

Debt-for-nature transactions generally are viewed as a success by conservation organizations and

debtor governments because of the funds generated for conservation efforts. Debt-for-nature

transactions under TFCA have stopped in recent years. Some observers suggest that this is due to

lack of appropriations to support TFCA and competing debt-relief programs, such as the Highly

Indebted Poor Countries Initiative.

Congressional Research Service

Debt-for-Nature Initiatives and the Tropical Forest Conservation Act

Contents

Background Information ................................................................................................................. 1

Authority for Debt-for-Nature Initiatives .................................................................................. 1

Debt-for-Nature Initiatives and Their Mechanisms ......................................................................... 2

Three-Party Transactions .......................................................................................................... 2

Bilateral and Multilateral Debt-for-Nature Initiatives............................................................... 6

U.S. Bilateral Debt-for-Nature Initiatives ........................................................................... 8

Tropical Forest Conservation Act ...................................................................................... 11

Issues for Congress ........................................................................................................................ 13

Rationale for and Criticism of Debt-for-Nature Initiatives ..................................................... 13

Decline of Debt-for-Nature Transactions ................................................................................ 15

Effectiveness of Debt-for-Nature Transactions ....................................................................... 16

Appropriations......................................................................................................................... 17

Future Directions ........................................................................................................................... 17

Figures

Figure 1. An Illustrative Example of a Three-Party Debt-for-Nature Swap Agreement ................. 3

Figure 2. An Example of a Bilateral Debt-for-Nature Transaction

Modeled After the TFCA ............................................................................................................. 9

Figure 3. Total Debt-for-Nature Transactions 1987-2015 ............................................................. 16

Tables

Table 1. Selected Countries Participating in Three-Party Debt-for-Nature Transactions,

1987-Present (excluding TFCA transactions) .............................................................................. 4

Table 2. Countries Other than the United States Participating in

Bilateral and Multilateral Debt-for-Nature Initiatives .................................................................. 6

Table 3. U.S. Bilateral Debt-for-Nature Transactions Under EAI .................................................. 11

Table 4. U.S. Bilateral Debt-for-Nature Transactions Under TFCA ............................................. 12

Table 5. Appropriations for Debt-for-Nature Transactions Under TFCA...................................... 17

Appendixes

Appendix. List of Related Laws and Appropriations That Support Debt-for-Nature

Initiatives .................................................................................................................................... 19

Contacts

Author Contact Information .......................................................................................................... 20

Congressional Research Service

Debt-for-Nature Initiatives and the Tropical Forest Conservation Act

Background Information

Debt-for-nature initiatives were conceived to address the rapid loss of resources and biodiversity

in developing countries that were heavily indebted to foreign creditors. Conservationists had

noted that the pressure to pay off foreign debts in hard currency was leading to increased levels of

natural resource exports (i.e., timber, cattle, minerals, and agricultural products) at the expense of

the environment. In many cases, indebted developing countries had difficulty meeting their hard

currency debt obligations and defaulted. Reducing foreign debt and allowing for portions of it to

be paid with local currency while increasing funds for the environment was thought to improve

environmental conditions in developing countries and had the advantage of relieving the debtor

country’s difficulties in procuring sufficient hard currency to pay off its debts.1 Money generated

from debt-for-nature transactions has been used to fund a variety of projects, ranging from

national park protection in Costa Rica to supporting ecotourism in Ghana and conserving tropical

forests in Bangladesh.

Since 1993, there has been a declining trend in the number of debt-for-nature transactions

involving official (public) and private funds. Accounting changes requiring new appropriations to

support official (public) debt transactions in creditor countries such as the United States, and a

higher price of commercial debt on secondary markets, are two reasons suggested for the decline

of debt-for-nature transactions. While Congress has periodically authorized U.S. participation in

three-party debt-for-nature transactions and has supported two bilateral debt-for-nature initiatives,

appropriations to support these types of efforts have generally diminished over the years.

Authority for Debt-for-Nature Initiatives

Early debt-for-nature legislation concentrated on understanding and promoting third-party debtfor-nature transactions (see Appendix for legislation summaries and United States Code

citations). Congress in 1989 directed the Secretary of the Treasury to ask the U.S. Executive

Director of the World Bank to develop a pilot debt-for-nature program and other ways of reducing

debt owed by foreign countries while generating funds for the environment. A subsequent law, the

International Development and Finance Act of 1989, authorized the U.S. Agency for International

Development (USAID) to make grants to nongovernmental organizations (NGOs) to purchase

debt in three-party transactions. Official (public) P.L. 480 debt owed to the United States by

eligible Latin American countries was authorized to be reduced by the 1990 farm bill (P.L. 101624; 7 U.S.C. 1738b). The 102nd Congress authorized debt reduction for foreign assistance loans

made by USAID (P.L. 102-549; 22 U.S.C. 2430 and 2421), the Export-Import Bank (Ex-Im

Bank; P.L. 102-429; 12 U.S.C. 635i-6), and the Commodity Credit Corporation (CCC; P.L. 102549; 22 U.S.C. 2430 and 2421). Together, the P.L. 480, USAID, Ex-Im, and CCC debt-reduction

authorizations were undertaken as part of President George H. W. Bush’s Enterprise for the

Americas Initiative. In 1996, USAID was further authorized by Congress to conduct swaps,

buybacks, and cancellations of debt owed to the United States by eligible Latin American and

Caribbean countries (P.L. 104-107). In 1998, the Tropical Forest Conservation Act (TFCA; P.L.

105-214; 22 U.S.C. 2431) was passed, allowing debt swaps, buybacks, and restructuring to

generate funds for tropical forest conservation worldwide. Funding for the TFCA was

reauthorized by Congress in 2004 (P.L. 108-323). In the 115th Congress, S. 1023 would authorize

appropriations for the TFCA of $20.0 million annually from FY2018 to FY2021. The bill also

1 Thomas E. Lovejoy III, “Aid Debtor Nations’ Ecology,” New York Times, October 4, 1984, Sec. A, p. 31.

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would expand the TFCA to include coral reefs and coral reef ecosystems.2 Further, the bill would

allow concessional debt incurred before the date of enactment of the bill to be eligible for debtfor-nature transactions. Under current law, eligible concessional debt must be incurred before

1998.

Debt-for-Nature Initiatives and Their Mechanisms

Three-Party Transactions

Three-party debt-for-nature transactions, involving nongovernmental organizations such as The

Nature Conservancy and Conservation International, were the first debt-for-nature agreements to

be formed. In a three-party swap, a conservation group purchases a hard currency debt owed to

commercial banks on the secondary market or in some cases a public (official) debt owed to a

creditor government at a discounted rate compared to the face value of the debt, and then

renegotiates the debt obligation with the debtor country.3 The debt is generally sold back to the

debtor country for more than it was purchased for by the NGO, yet less than what it was on the

secondary market. The proceeds generated from the renegotiated debt, to be repaid in local

currency, are typically put into a fund that often allocates grants to local environmental

organizations for conservation projects (see Figure 1). In these cases, the fund is administered by

the conservation organization, representatives from local environmental groups, and the debtor

government. Money to buy the debt initially may come from the nongovernmental organization,

governments, banks, or other private organizations.

2 S. 1023 defines a coral reef ecosystem as “any coral reef and coastal marine ecosystem surrounding, or directly

related to, a coral reef and important to maintaining the ecological integrity of that coral reef, such as seagrasses,

mangroves, sandy seabed communities, and immediately adjacent coastal areas.”

3 Sometimes debt is donated to the nongovernmental organization (NGO) in the three-party swap.

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Figure 1. An Illustrative Example of a Three-Party Debt-for-Nature Swap Agreement

Source: Congressional Research Service.

In 1989, Congress authorized the United States Agency for International Development (USAID)

to provide assistance to nongovernmental organizations to purchase the commercial debt of

foreign countries as part of debt-for-nature agreements (P.L. 101-240; 22 U.S.C. 2282-2286).

Several nongovernmental organizations participated in debt-for-nature transactions with financial

assistance from USAID; however, specific information on funds given by USAID to support

three-party debt-for-nature transactions was not available.

While debt initiatives conducted with three-party transactions are numerous, they have resulted in

less reduction in total debt than the debts swapped under bilateral agreements (government-togovernment), and slightly less in conservation funds generated. In total, approximately $200

million in debt (face value) has been reduced, restructured, or swapped using this mechanism,

generating approximately $167 million in local currency for conservation purposes (see Table 1).

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Table 1. Selected Countries Participating in Three-Party Debt-for-Nature

Transactions, 1987-Present (excluding TFCA transactions)

(in thousands of dollars)

Country

Bolivia

Year

Purchaser

Cost

Face Value

of Debt

Conservation Funds

Generated

1993

TNC/WWF

$11,500

$2,860

1987

100

650

250

100

12,150

3,110

Total Bolivia

Brazil

1992

TNC

748

2,200

Costa Rica

1991

RA/MCL/

TNC

360

600

540

1990

SW/WWF/

TNC

1,953

10,574

9,603

1989

TNC

784

5,600

1,680

1989

Sweden

3,500

24,500

17,100

1988

Holland

5,000

33,000

9,900

1988

NPF

918

5,400

4,050

12,515

79,674

42,873

Total Costa

Rica

Dominican

Republic

1990

PRCT/TNC

116

582

Ecuador

1992

Japan

1,000

1989

WWF/FN

640

5,400

1987

WWF

354

1,000

994

6,400

7,400

Total Ecuador

Ghana

2000

100

1991

CI/SI

250

1,000

330

1,100

1,090

Total Ghana

Guatemala

1992

CI/USAID

1,200

1,334

1991

TNC

100

1,275

1,434

1,424

Total

Guatemala

Jamaica

1991

TNC/USAID/

PRCT

300

437

Madagascar

2008

WWF/France

n/a

20,000

1996

WWF/Netherlands

Development Corporation

n/a

2,000

1,500

1994

WWF/JPM

1,341

1,072

1994

200

160

1993

WWF

909

1,868

1993

1,500

3,200

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Country

Year

Purchaser

Face Value

of Debt

Conservation Funds

Generated

1991

CI/UNDP

118

119

1990

WWF

446

919

1989

WWF/USAID

950

2,111

3,914

11,757

30,949

Total

Madagascar

Mexico

Cost

1998

256

550

318

1996

192

391

254

1996

327

496

443

1996

440

671

561

1995

CI/USAID

246

488

337

1994

399

480

1994

236

280

1994

248

290

1993

208

252

1992

CI/USAID

355

441

1991

250

1991

183

250

3,092

4,838

4,155

Total Mexico

Nigeria

1991

NCF

150

Peru

1993

WWF

n/a

2,860

1,573

2002

WWF, CI, TNC, U.S.

5,500

14,000

10,600

5,500

16,860

12,173

Total Peru

Philippines

1993

WWF

13,000

19,000

17,100

1992

WWF/USAID

5,000

10,000

9,000

1990

WWF/USAID

439

900

1989

WWF

200

390

18,639

30,290

29,090

Total

Philippines

Poland

1990

WWF

Seychelles

2015

TNC/PC

n/a

30,000

28,500

Zambia

1989

WWF

454

2,270

2,500

Sources: Several sources, including M. Moye, Commercial Debt-for-Nature Swaps: Summary Table (Washington,

DC: World Wildlife Fund, 2003); M. Guerin-McManaus, Ten Years of Debt for Nature Swaps 1987-1997

(Washington, DC: Conservation International, 2000); World Bank, World Debt Tables, 1996 (Washington, DC:

The World Bank, 1996); and press releases describing various debt-for-nature transactions.

Notes: A cost of $0 indicates that funds were written off by the bank to restructure the debt.

Funds generated may be cash or bonds. Figures given do not include interest earned over the life of the bonds.

Full titles of abbreviations are given below. Grand total given is an estimate since some figures were not available.

n/a = not available.

CABEI = Central American Bank for Economic Integration

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CI = Conservation International

FN = Fundacion Natura

JPM = J. P. Morgan Chase and Co.

MBG = Missouri Botanical Garden

MCL = Monteverde Conservation League

NCF = Nigerian Conservation Foundation

NPF = National Parks Fdn. of Costa Rica

PC = Paris Club

PRCT = Puerto Rican Conservation Trust

RA = Rainforest Alliance

SI = Smithsonian Institution

TNC = The Nature Conservancy

UNDP = United Nations Development Prog.

U.S. = U.S. federal government

USAID = U.S. Agency for International Development

WWF = World Wildlife Fund

Bilateral and Multilateral Debt-for-Nature Initiatives

Bilateral debt transactions are conducted with official (public) funds directly between the creditor

and debtor governments. The creditor government determines the criteria for eligibility, which

usually involve the existence of certain financial and political conditions in the debtor country.

Debt agreements are usually cancelled and then restructured to extend payback periods, or in

some cases, debt is bought back by the debtor country for a discounted price. Money for the

environment can be generated through interest payments from the debtor country if the debt is

restructured, or from a percentage of the buyback price. Multilateral debt-for-nature agreements

have also been conducted between more than one creditor country and a debtor country (see

Table 2).

Table 2. Countries Other than the United States Participating in

Bilateral and Multilateral Debt-for-Nature Initiatives

(in thousands of dollars, except where noted)

Creditor

Debtor

Country

Year

Face Value of

Debt Treated

Conservation Funds

Generated

Canada

Columbia

1993

$12,000

El Salvador

1993

7,500

6,000

Honduras

1993

24,900

12,450

Nicaragua

1993

13,600

2,700

Peru

1994

11,250

3,800

Belgium

Bolivia

1992

13,000

n/a

Finland

Poland

1990

17,000

Peru

1995

18,900

8,100

Egypt

1992

n/a

11,600

Philippines

1992

n/a

4,000

Poland

1993

66,000

Cameroon

2006

n/a

25,000

Mozambique

2015

17,500 (in

euros)

2,000 (in euros)

France

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Creditor

Debtor

Country

Year

Face Value of

Debt Treated

Conservation Funds

Generated

Germany

Peru

1994

16,079

6,100

Jordan

1995

13,400

6,700

Jordan

1995

22,700

11,300

Philippines

1996

5,800

1,800

Vietnam

1996

18,200

5,400

Bolivia

1997

3,700

1,150

Honduras

1999

1.068

534

Peru

1999

5,140

2,060

Vietnam

1999

16,400

5,000

Jordan

2000

43,600

21,800

Bolivia

2000

15,800

3,200

Jordan

2001

11,300

5,700

Vietnam

2001

7,000

n/a

Syria

2001

31,700

15,900

Ecuador

2002

9,500

3,081

Ecuador

2002

10,200

3,235

Madagascar

2003

25,092

14,843

Indonesia

2003

n/a

Indonesia

2004

29,250

n/a

Indonesia

2006

13.7 (in

euros)

6.3 (in euros)

Indonesia

2006

13.7 (in

euros)

6.3 (in euros)

Indonesia

2007

n/a

Mozambique

2014

n/a

10,000 (in

euros)

Peru

1996

n/a

Costa Rica

1996

14,100

Costa Rica

1988

33,000

9,900

Poland

1998

32,000

Egypt

2001

n/a

Egypt

1993

17,300

n/a

Egypt

1993

6,200

n/a

Nigeria

1993

10,200

n/a

Poland

2000

27,000

Spain

Costa Rica

1999

5,222

2,180

Sweden

Costa Rica

1989

24,500

17,100

Tunisia

1992

1,100

Holland

Italy

Norway

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Creditor

Switzerland

U.K.

Debtor

Country

Year

Face Value of

Debt Treated

Conservation Funds

Generated

Tunisia

1993

520

Bolivia

1993

35,400

3,900

Poland

1997 &

1999

13,000

Peru

1992

130,800

32,600

Tanzania

1993

22,200

3,300

Bolivia

1993

35,400

1,365

Poland

1993

48,000

Honduras

1993

&1997

42,030

8,430

Ecuador

1994

46,300

4,524

Bulgaria

1995

16,700

16,200

Egypt

1995

23,000

18,000

Guinea

Bissau

1995

8,400

400

Philippines

1995

16,100

Nigeria

1993

7,300

n/a

Tanzania

1993

15,400

Sources: Various sources including R. Curtis, “Bilateral Debt Conversions for the Environment, Peru: An

Evolving Case Study,” IUCN World Conservation Congress, Montreal (1996), and press releases describing

various debt-for-nature transactions.

Note: n/a = information not available.

U.S. Bilateral Debt-for-Nature Initiatives

The model for bilateral debt-for-nature agreements conducted by the United States was first

defined in 1990 by the Enterprise for the Americas Initiative (EAI; Title 15, Section 1512 of the

Food, Agriculture Conservation and Trade Act of 1990, “1990 farm bill,” P.L. 101-624; 7 U.S.C.

1738) and has since been expanded numerous times (see Appendix). It was last amended by the

Tropical Forest Conservation Act (TFCA) in 1998 (P.L. 105-214; 22 U.S.C. 2431).

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Figure 2. An Example of a Bilateral Debt-for-Nature Transaction

Modeled After the TFCA

Source: Congressional Research Service.

The EAI legislation authorizes the sale, reduction, cancellation, and country buyback of eligible

debt of Latin American and Caribbean countries that meet certain criteria. The debt authorized to

be treated include the following types:



P.L. 480 debt4 (P.L. 101-624; 7 U.S.C. 1738m, p-r, etc.)

AID debt5 (P.L. 102-549; 22 U.S.C. 2430 and 2421)

CCC debt6 (P.L. 102-549; 22 U.S.C. 2430 and 2421)

Exim debt7 (P.L. 102-429; 12 U.S.C. 635i-6)8

Debtor countries must meet certain political and macroeconomic criteria in order to be eligible.

Eligible countries are required to (1) have a democratically elected government, (2) not support

terrorism, (3) not fail to cooperate with the United States on drug control, and (4) not engage in

gross violations of human rights. From an economic perspective, eligible countries are required to

have (1) an International Bank for Reconstruction and Development (IBRD) or International

P.L. 480 “Food for Peace” loans were low-interest loans given to developing countries to purchase U.S. agricultural

products.

5 U.S. Agency for International Development (USAID) foreign assistance loans.

6 Commodity Credit Corporation (CCC) loans are given to developing countries to enable them to import U.S.

agricultural products.

7 Export-Import (Ex-Im) Bank loans are made to foreign importers of U.S. goods and services.

8 Although debt under the P.L. 480 program was the first to be authorized for debt-for-nature transactions, authorization

quickly followed for reduction of debt owed to the United States under three other programs: (1) CCC programs, (2)

Export-Import Bank loans, and (3) foreign aid loans administered by USAID.

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Development Association (IDA) structural or sectoral adjustment loan or its equivalent, (2) a

macroeconomic agreement with the International Monetary Fund or equivalent, and (3) instituted

investment reforms, as evidenced by a bilateral investment treaty with the United States, an

investment sector loan, or progress towards implementing an open investment regime. Each

country that participates in the EAI must enter into an Americas Framework Agreement with the

United States to establish an Americas Trust Fund and create enforcement mechanisms to insure

payments into the fund and prompt disbursements out of the fund.9 Funds can be used to support

environmental, natural resource, health protection, and child development programs within the

debtor country.

Debt swaps, buybacks, and restructuring are three mechanisms authorized to conduct debt-fornature transactions under the EAI. Seven of the eight countries that have participated in debt-fornature transactions under the EAI used the debt-restructuring mechanism to generate

environmental funds (see Table 3); only Peru took advantage of the debt buyback option. In a

debt-restructuring agreement, the original debt agreement is cancelled (e.g., a percentage of the

face value of the debt could be reduced) and a new debt agreement is created with a provision for

an annual amount of money (in local currency) to be deposited into an environmental fund. In

1992, for example, the United States reduced a $310 million (face value) debt owed by Colombia

by 10% in return for a total deposit of $41.6 million in local currency into an environmental fund

managed by the Colombian government over 10 years.10 In a debt buyback, the debtor country

purchases its debt at a reduced price. The lesser of either 40% of the repurchase price or the

difference between the face value of the debt and the repurchase price is deposited in local

currency into an environmental trust to support environmental and child support programs in the

debtor country (P.L. 104-107, Title V, Sec. 574). For example, in 1998 Peru took advantage of this

program and bought back $177 million in debt for $57 million, generating nearly $23 million

(40% of the repurchase price) in local currency funds for conservation and child development

programs. For all eight debtor countries, more than $1 billion (face value) of debt was reduced

from a total debt of $1.9 billion, and almost $180 million of conservation funds were generated

under the guidelines of the EAI (see Table 3).

All deposits into EAI funds have stopped, and some countries continue to award grants from their

funds. Three transactions under the EAI continued to operate in 2015 (Chile, Uruguay, Bolivia,

Argentina, and Peru have been concluded). These programs support small projects with grants

and monitor existing projects that have been funded. Some examples of EAI projects include

coastal zone marine management and hurricane relief projects in Jamaica, environmentally based

development projects in the Peruvian Andes, and community conservation grants in Bolivia.11

9 The Americas Trust Fund can be either an endowed fund or a sinking fund depending on the agreement reached by

the United States and the debtor country. Interest payments made by debtor countries on their new restructured loans

are deposited into the fund. These payments form the principal of the fund, and interest earned on this principal and the

principal itself can be used to fund environmental, community development, and child survival and development

programs.

10 R. Curtis, “Bilateral Debt Conversions for the Environment, Peru: An Evolving Case Study,” IUCN World

Conservation Congress, Montreal (1996).

11 USAID, Enterprise for the Americas Initiative and the Tropical Forest Conservation Act: 2014 Financials Report,

March 2015.

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Table 3. U.S. Bilateral Debt-for-Nature Transactions Under EAI

(in thousands of dollars)

Year

Debt

Reduction

Original Value

of Debt

Conservation

Funds

Generated

Duration

(years)

Bolivia

1991

$30,700

$38,400

$21,800

El Salvador

1992

469,900

614,000

41,200

Uruguay

1992

3,700

34,400

6,190

Columbia

1992

31,000

310,000

41,600

Chile

1991 & 1992

30,600

186,000

18,700

Jamaica

1991 & 1993

310,800

405,400

21,500

Argentina

1993

3,800

38,100

3,100

Peru

1998

177,000

350,000

22,840

n/a

1,057,500

1,976,300

176,930

Country

TOTAL

Source: USAID, Enterprise for the Americas Initiative and the Tropical Forest Conservation Act: 2014 Financials Report,

March 2015.

Note: EAI = Enterprise for the Americas Initiative (Title 15, Section 1512 of the Food, Agriculture Conservation

and Trade Act of 1990, “1990 Farm Bill,” P.L. 101-624; 7 U.S.C. 1738.)

Tropical Forest Conservation Act

Acknowledging that tropical rainforests were valuable for preserving biodiversity, reducing

atmospheric carbon dioxide, and regulating hydrological cycles, Congress sought to expand the

EAI authorization to countries throughout the world with tropical forests. The result was the 1998

Tropical Forest Conservation Act (TFCA, P.L. 105-214; 22 U.S.C. 2431), which was established

to generate funds to conserve tropical forests by reducing external debt in countries with such

forests. TFCA is an extension of the Enterprise for the Americas Act, in that it allows debt swaps,

debt restructuring, and debt buybacks to generate conservation funds. These funds, however, are

specifically designated for the conservation of tropical forests and are not confined to Latin

America. To date, 14 countries have participated in this program, establishing 20 agreements

(several countries have two agreements) that will reduce a total of at least $90.0 million from the

face value of their debts to the United States and generate $339.4 million in local currency for

tropical forest conservation projects (see Table 4). To date, the Republic of the Philippines

completed the largest ever debt-for-nature transaction under the TFCA in 2013.

Subsidized Debt Swap

In 2001, a different form of a debt-for-nature transaction emerged under the TFCA. The Nature Conservancy and

the United States agreed to share costs to buy down a portion of debt that Belize owed to the United States. This

partnership in debt-for-nature transactions is referred to as a subsidized debt swap. In a subsidized debt swap, an

NGO generally matches a portion of the U.S. government contribution toward a debt-for-nature transaction. For

example, in a transaction with Panama in 2003, the U.S. government provided $5.6 million and the Nature

Conservancy provided $1.2 million to reduce Panama’s debt by $10 million and generate $10 million in

conservation funds. The transaction is completed when three agreements are signed: (1) the U.S. government and

the beneficiary country sign a debt-restructuring agreement; (2) the U.S. government and the NGO sign an

agreement to transfer NGO funds; and (3) the NGO and the beneficiary country sign a Forest Conservation

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Agreement.12 In a subsidized swap, the U.S. government is not a signatory to the Forest Conservation Agreement,

yet it generally has representatives on the oversight committee.13

Table 4. U.S. Bilateral Debt-for-Nature Transactions Under TFCA

(in thousands of dollars)

Private

Funds

Leveragedc

Face Value

Reduction of

Debt

Conservation

Funds

Generated

Duration

(years)

Countrya

Year

Budget

Costb

Bangladesh

2000

$6,000

$0.0

$600

$8,500

Belize

2001

5,500

1,300

1,400

9,000

El Salvador

2001

7,700

0.0

3,000

14,000

Peru I

2002

5,500

1,100

3,700

10,600

Philippines I

2002

5,500

0.0

100

8,300

Panama I

2003

5,600

1,200

10,000

Columbia

2004

7,000

1,400

n/a

10,000

Panama II

2004

6,500

1,300

n/a

10,900

Jamaica

2004

6,500

1,300

n/a

16,000

Paraguay

2006

4,800

0.0

n/a

7,400

Guatemala

2006

15,000

2,000

n/a

24,400

Botswana

2006

7,000

0.0

n/a

8,300

Costa Rica I

2007

12,600

2,500

n/a

26,000

Peru II

2008

19,600

0.0

n/a

25,000

Indonesia I

2009

20,000

2,000

n/a

30,000

Brazil

2010

19,500

0.0

20,800

21,000

Costa Rica II

2010

19,600

3,900

21,000

27,000

Indonesia II

2011

19,800

3,960

28,500

Philippines II

2013

28,200

n/a

31,800

Indonesia III

2014

11,200

560

n/a

12,700

233,400

22,520

n/a

339,400

n/a

TOTAL

Sources: Email communications with Office of the Tropical Forest Conservation Act Secretariat, USAID 20042009, and the USAID, Operation of the Enterprise of the Americas Facility and Tropical Forest Conservation Act, Annual

Report to Congress (Washington, DC, March 2004-2009). USAID, Enterprise for the Americas Initiative and the

Tropical Forest Conservation Act: 2014 Financials Report, March 2015.

Notes: In the transaction with Peru in 2002, a total of $1.1 million was given by the Nature Conservancy,

World Wildlife Fund, and Conservation International, and $5.5 million was given by the U.S. government.

n/a = not available.

a. The Kingdom of Thailand signed a debt-reduction agreement in September 2001. The signing of the second

required agreement, the Tropical Forest Agreement, never took place. The Thai government annulled the

12 In comparison, the U.S. government is a signatory on a Tropical Forest Agreement, which is used with debt-for-

nature transactions that are not subsidized by an NGO.

13 This agreement generally addresses the structure of the conservation fund, its administrative council, and the use of

monies from the fund, among other things.

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agreement on January 30, 2003, amidst false media reports that warned that the U.S. government would

retain control over forests involved in the agreement.

The budget cost of the debt is the funding provided by the U.S. government to reduce the face value of the

original debt.

In some debt-for-nature transactions, a third party is involved (generally a nongovernmental organization) in

the process and subsidizes a portion of the debt-reduction done by the United States. For example, NGOs

such as the World Wildlife Fund, the Nature Conservancy, and Conservation International have subsidized

these transactions.

To be eligible for this program, a developing country must contain at least one tropical forest with

unique biodiversity, or a tropical forest tract that is representative of a larger tropical forest on a

global, continental, or regional scale.14 Political and macroeconomic criteria for eligibility are

almost identical to those used for participation under the EAI.15 Conservation funds (in local

currency) from these transactions are deposited in a tropical forest fund for each country. The

fund is overseen by an administrating body composed of one or more appointees chosen by the

U.S. government and the government of the beneficiary country, and individuals who represent a

broad range of environmental, academic, and scientific organizations in the beneficiary country

(the majority of the board is represented by these individuals). This fund operates in the same

manner as the Americas Fund: Local currency payments of interest accrued on restructured loans

are deposited into a tropical forest fund and serve as the principal. Interest earned from this

principal balance and the principal itself is usually given in the form of grants to fund tropical

forest conservation projects. Eligible conservation projects include (1) the establishment,

maintenance, and restoration of parks, protected reserves, and natural areas, and the plant and

animal life within them; (2) training programs to increase the capacity of personnel to manage

parks; (3) development and support for communities residing near or within tropical forests; (4)

development of sustainable ecosystem and land management systems; and (5) research to identify

the medicinal uses of tropical forest plants and their products.

The TFCA was reauthorized for appropriations in 2004, including $20 million for FY2005, $25

million for FY2006, and $30 million for FY2007. This law also authorizes funds to conduct

audits and evaluations of debt-for-nature programs. A “TFCA Evaluation Sheet” has been created

to evaluate the performance of TFCA country programs. The evaluation sheet establishes criteria

for TFCA program categories and functions and is completed each year by the U.S. government

representative on the local TFCA board or oversight committee. This law also authorizes the use

of the principal of restructured loans for debt-for-nature transactions.

Issues for Congress

Rationale for and Criticism of Debt-for-Nature Initiatives

Advocates of debt-for-nature initiatives argue that reducing debt in developing countries will help

create free-market systems (as part of the reforms required for eligibility), stimulate economic

growth and trade liberalization, provide incentives for foreign investment, and help protect the

14 Developing country is defined as a “low-” or “middle-” income country as determined by the International Bank for

Reconstruction and Development in its World Development Report. According to 2013 data from the World Bank, the

cutoff for low-income countries was a per capita annual income of $1,045 or less. For middle-income countries, the

range for per capita annual income is more than $1,045 but less than $12,746.

15 Instead of having in place major investment reforms in conjunction with an Inter-American Development Bank

(IADB) loan or making progress toward implementing an open investment regime, the country must have in place a

bilateral investment treaty with the United States, investment sector loans with the IADB, World Bank-supported

reforms, or other measures as appropriate (22 U.S.C. 2431c).

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environment. Converting hard currency debts to local currency debts, advocates argue, will lower

debt burdens on developing countries and in the long run may reduce resource extraction at the

expense of the environment. Critics of debt-for-nature initiatives argue that only a small

percentage of debt is reduced, thereby minimizing the positive benefits of debt reduction in

developing countries. For example, in some transactions under the TFCA, the interest paid for the

debt is used for conservation projects, while the principle of the debt remains. Supporters point

out that although the percentage of debt reduced by debt-for-nature transactions is small, the

establishment of laws, programs, and funds dedicated to conservation that follows debt-for-nature

initiatives in debtor countries is generally significant relative to what the country originally would

have spent on conservation.16 The relationship between debt reduction and lower resource

extraction rates is controversial. Some analysts suggest that debt reduction has no direct

relationship to lower extraction rates of minerals or timber in developing countries with foreign

debt.17

Advocates of debt-for-nature initiatives note that the United States has a history of supporting

debt reduction initiatives in developing countries and appropriating funds for environmental

causes. For example, the Heavily Indebted Poor Countries (HIPC) initiative (22 U.S.C. §262p-6)

aims to reduce debt in developing countries.18 HIPC was created by international creditors, the

World Bank, and IMF to reduce debt of poor countries that have demonstrated social and

economic policy reforms that enable fluid export revenues and capital inflows. Funds generated

for the environment in developing countries arguably improve local environmental conditions,

promote sustainable resource use, and help to preserve global biodiversity and ecosystem

services. Critics argue that such benefits are limited in scope because conservation spending is

unbalanced. The majority of conservation funds are often directed toward a few areas and specific

projects that already feature work by organizations and researchers and do not address other areas

that are equally rich in biodiversity.19

Advocates also suggest that debt-for-nature transactions that generate funds to support tropical

forest conservation are especially appropriate to address climate change. Deforestation20 is

responsible for the largest share of carbon dioxide (CO2) released to the atmosphere due to land

use changes, approximately 20% of total anthropogenic greenhouse gas (GHG) emissions

annually.21 Much of the deforestation responsible for CO2 releases occurs in tropical regions,

specifically in developing countries such as Brazil, Peru, Indonesia, and the Democratic Republic

16 For example, Ecuador reduced its external debt of $8.3 billion by only $1 million from a debt-for-nature swap, yet

doubled its budget for parks and reserves with money received from the resulting conservation fund.

17 Dal Didia, “Debt-for-Nature Swaps, Market Imperfections, and Policy Failures as Determinants of Sustainable

Development and Environmental Quality,” Journal of Economic Issues (2001), pp. 477-486; and Esben Brandi-Hanson

and Kaspar Svarrer, “Debt-for-Nature Swaps: One or the Other, or Both?” Royal Veterinarian and Agricultural

University of Denmark, Department of Economics, 1998, p. 17.

18 Eligibility requirements for participating in the Heavily Indebted Poor Countries (HIPC) program include that a

country must receive only concessional financing from the World Bank and International Monetary Fund (IMF) (i.e.,

borrowing only from the World Bank’s International Development Association [IDA] and from the IMF’s Enhanced

Structural Adjustment Facility [ESAF]), establish a track record of economic reforms under IMF- and World Banksponsored programs, and hold a debt burden that is unsustainable under existing (Naples terms) relief arrangements.

19 John M. Shandra et al., “Do Commercial Debt-for-Nature Swaps Matter for Forests? A Cross National Test of World

Polity Theory,” Sociological Forum, vol. 26, no. 2 (June 2011), p. 387.

20 Deforestation is the conversion of forests to pasture, cropland, urban areas, or other landscapes that have few or no

trees. Afforestation is planting trees on lands that have not grown trees in recent years, such as abandoned cropland.

21 Intergovernmental Panel on Climate Change, “Working Group I Contribution to the Fourth Assessment Report of the

Intergovernmental Panel on Climate Change,” Climate Change 2007: The Physical Science Basis (2007), at http://ipccwg1.ucar.edu/wg1/wg1-report.html. (Hereinafter referred to as 2007 IPCC WG I Report.)

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of the Congo. Some of these tropical countries with high levels of total debt owed to the United

States also have some of the largest areas of tropical forest cover. For example, Indonesia and has

concessional debts to the United States totaling over $140 million, and has one of the largest

areas of tropical forest cover in the world.22 Other countries, such as the Democratic Republic of

Congo and Sudan, also fit this pattern; however, these countries may be ineligible for debt-fornature transactions under the TFCA due to political and economic eligibility requirements.23

Those who oppose debt-for-nature transactions often argue that they are not adequately enforced

by debtor countries, generate insufficient funds to improve environmental problems, and may

infringe on national sovereignty.24 Three-party debt transactions have historically had weak

enforcement mechanisms; however, bilateral debt transactions such as those conducted under the

EAI generally include safeguards and default provisions to protect the U.S. government from

losing funds. National sovereignty became an issue with the first debt-for-nature swap in Bolivia

when a conservation organization was reported to have obtained title to forested lands. There was

a public outcry and ensuing political crisis when the Bolivian people thought a large part of their

country had been given to a foreign organization. Consequently, conservation organizations

involved in recent three-party transactions have generally refrained from directly buying land in

debtor countries with conservation funds earned from debt-for-nature transactions.

Decline of Debt-for-Nature Transactions

The number of debt-for-nature transactions has declined in recent years, perhaps due to

accounting changes that require greater appropriations to fund debt-for-nature transactions with

official (public) debt and a higher price of commercial debt on the secondary market (see Figure

3). Before 1991, no appropriations were required for debt cancellations, and the United States

cancelled between $11 billion and $12 billion in debt between 1988 and 1991. This changed with

the Federal Credit Reform Act of 1990 (2 U.S.C. 661a et seq.). This law requires that the net

present value (NPV) of debts owed to the United States by foreign countries be used to calculate

the cost of debt restructuring, buybacks, swaps, and cancellations to the U.S. government. The

NPV of the loan is calculated often giving consideration to projected default losses, fees, and

interest subsidies. Funds appropriated by Congress for conducting debt-for-nature transactions

cover the cost of loan modifications, which could include a face-value reduction in the amount of

eligible debt owed to the United States. TFCA has not received appropriations since FY2014.

A decline in three-party commercial debt-for-nature transactions may also be due to the

conclusion of Brady Plan operations by Latin American countries. The Brady Plan allowed for

partial debt forgiveness with a restructuring of the remaining debt into bonds that could be traded

on the securities markets. When this program was concluded, the price of debt on the secondary

market increased and financing leverage decreased, making it difficult and less attractive for

environmental organizations to acquire debt for resale.25 Further, debt relief for developing

countries is available through other programs that allow for relatively greater amounts of debt to

22 U.S. Department of the Treasury and Office of Management and Budget, “United States Government Foreign Credit

Exposure as of 2018; Food and Agriculture Organization of the United Nations, “Global Forest Resources

Assessment,” 2015.

23 Participation in three-party debt-for-nature swaps through USAID is not subject to the same economic and political

criteria required for participation in TFCA and EAI debt-for-nature transactions. An eligible country must be

committed to, plan for, and have a government or local NGO responsible for the long-term viability of the programs

under the swap agreement.

24 R. T. Deacon and P. Murphy, “The Structure of an Environmental Transaction: The Debt-for-Nature Swap,” Land

Economics (1997), pp. 1-24.

25 The World Bank, “World Debt Tables, 1996,” 1996.

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be cancelled (e.g., HIPC). These programs may be more desirable to developing countries with

debt than debt-for-nature initiatives under the EAI or TFCA. Under the TFCA, there was an 18month period from 2004 to 2006 when no transactions were made, largely due to the length of

time needed to negotiate and create debt-restructuring agreements. Lastly, the political and

economic requirements needed to be eligible for debt-for-nature transactions make it difficult,

according to some, for some countries with eligible debt to participate in EAI or TFCA programs.

Figure 3.Total Debt-for-Nature Transactions 1987-2015

Source: Congressional Research Service.

Note: Some debt transactions during this time period may not be represented in this figure due to limited data

available from international sources and organizations.

Effectiveness of Debt-for-Nature Transactions

Few studies have analyzed the effectiveness of debt-for-nature transactions. Because most of the

transactions address several aspects of forest conservation, it would be difficult to

comprehensively analyze their effectiveness in conserving tropical forests. A 2011 study on

deforestation in poor countries found that poor nations that have implemented debt-for-nature

transactions and have high levels of conservation funds tend to have lower rates of deforestation

than countries that do not.26 Nevertheless, many conservation organizations support the

framework of the TFCA and suggest that the TFCA should serve as a model for conserving other

ecosystems, such as coral reefs and grasslands.27

26 John M. Shandra et al., “Do Commercial Debt-for-Nature Swaps Matter for Forests? A Cross National Test of World

Polity Theory,” Sociological Forum, vol. 26, no. 2 (June 2011), pp. 401-402.

27 Wildlife Conservation Society, “Say Yes to Tropical Forest Conservation,” press release, 2018, at

https://secure.wcs.org/campaign/tell-your-senators-say-yes-tropical-forest-conservation.

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Appropriations

Appropriations for debt reduction activities authorized by the EAI totaled $90 million; $40

million was appropriated for P.L. 480 debt reduction for FY1993 (P.L. 102-341) and $50 million

was appropriated for other debt restructuring under EAI in FY1993 (P.L. 102-391). For debt

reduction activities under TFCA, appropriations have totaled approximately $233.4 million from

FY2000 to FY2013 (see Table 5). Authorization for appropriations under TFCA expired in

FY2008, and Congress has not appropriated funding for the program since FY2013.

Table 5. Appropriations for Debt-for-Nature Transactions Under TFCA

(in millions of dollars)

Fiscal Year

Appropriated Amount

Annual Obligation

2000

$13.0

$7.0

2001

13.0

13.2

2002

Up to 25.0 (11.0 was given

for the TFCA)a

11.0

2003

Up to 40.0 (20.0 was given

for the TFCA)

5.6

2004

19.8

20.0

2005

20.0

0.0

2006

20.0

2007

20.0

19.6

2008

20.0

19.6

2009

20.0

2010

20.0

39.1

2011

16.4

19.8

2012

12.0

0.0

2013

11.4

28.3

2014

0.0

11.2

2015-2018

0.0

Sources: Tropical Forest Conservation Act Secretariat, Enterprise for the Americas Initiative and Tropical Forest

Conservation Act, 2014 Report, USAID, 2015, and federal appropriations laws.

a. This figure consists of $5 million in direct funds and $6 million in funds transferred from unobligated

balances.

Future Directions

Bilateral debt-for-nature initiatives implemented by the U.S. government were supported through

appropriations under programs such as the EAI and TFCA. Recently, appropriations for

conducting debt-for-nature transactions under these programs have stopped. Additionally, there

generally has been less interest in conducting debt-for-nature transactions. Some possible reasons

for the decreased interests could include the following:

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

Eligible debt to conduct these transactions has decreased, making these

transactions either insignificant or not allowed for some debtor countries.

The amount involved in the transactions is too small for some eligible countries

to show interest in participating.

There is a lack of appropriations to support debt-for-nature transactions.

The focus on tropical forests (i.e., through TFCA) might be too narrow for many

eligible countries.

Some Members of Congress contend that transactions under TFCA should continue because the

program is included in strategies to address global climate change.28 Tropical forests make up the

largest proportion of carbon stored in terrestrial land masses and are thought to be a carbon sink.29

Despite uncertainties on the part of some, it is generally thought that maintaining existing tropical

forests will store carbon and that preventing deforestation will reduce the release of stored carbon

into the atmosphere.30 The most recent debt-for-nature swap with Indonesia under the TFCA in

2014, for example, has been billed as a cooperative effort to deal with climate change.31 However,

no quantitative analyses have examined the amount of stored-carbon emissions reduced by TFCA

efforts. Others have supported expanding TFCA to include coral reefs. The addition of coral reefs

to the program could expand the number of eligible countries for debt-for-nature transactions,

pending economic and political criteria.32

28 Senator Rob Portman, “Portman Renews Efforts to Promote Conservation and Reduce Greenhouse Gas Emissions,”

press release, February 26, 2015, at http://www.portman.senate.gov/public/index.cfm/press-releases?ID=4E89FFE6B315-460E-B3A3-6E5844619F9E.

29 For more information, see CRS Report R41144, Deforestation and Climate Change, by (name redacted) .

30 T. K. Rudel, Sequestering Carbon in Tropical Forests: Experiments, Policy Implications, and Climate Change,

Society and Natural Resources, vol. 14 (2001), pp. 525-531.

31 U.S. Embassy in Indonesia, “U.S. and Indonesia Award Grants to Promote Forest Conservation and Combat Climate

Change,” press release, April 29, 2014, at https://id.usembassy.gov/u-s-and-indonesia-award-grants-to-promote-forestconservation-and-combat-climate-change-2/.

32 Senator Rob Portman, “Portman, Bipartisan Senate Colleagues Introduce Legislation to Promote Conservation and

Reduce Greenhouse Gas Emissions,” press release, May 3, 2017, at https://www.portman.senate.gov/public/index.cfm/

press-releases?ID=8E80A0C4-F03C-4420-BB19-44D7A7919875.

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Appendix. List of Related Laws and Appropriations

That Support Debt-for-Nature Initiatives



Continuing Appropriations Act for 1988 (P.L. 100-202; Section 537(C)(1-3)).

Directs Secretary of the Treasury to analyze initiatives that would enable

developing countries to repay portions of their debt obligations through

investments in conservation activities.



International Development and Finance Act of 1989 (P.L. 101-240; Title VII,

Part A, Section 711) (22 U.S.C. 2282 - 2286). Authorizes USAID to provide

assistance to nongovernmental organizations to purchase debt of foreign

countries as part of a debt-for-nature agreement (i.e., three-party swap).

Authorizes USAID to conduct a pilot program for debt-for-nature swaps with

eligible sub-Saharan African countries.

Support for East European Democracy (SEED) Act of 1989 (P.L. 101-179;

Title I, Section 104) (22 U.S.C. 5414). Authorizes the President to undertake the

discounted sale, to private purchasers, of U.S. government debt obligations from

eligible Eastern European countries.

FY1990 Foreign Operations Appropriations Act (P.L. 101-167; Title V,

Section 533(e)) (22 U.S.C. 262p-4i - 262p-4j). Directs the Secretary of the

Treasury to (1) support sustainable development and conservation projects when

negotiating reduction of commercial debt and assisting with reduction of official

(public) debt obligations, (2) encourage the World Bank to assist countries in

reducing or restructuring private debt through environmental project and policybased loans, and (3) encourage multilateral development banks to support

lending portfolios that will allow debtor countries to restructure debt that may

offer financial resources for conservation.

Enterprise for the Americas Initiative (Title XV, Section 1512 of the Food,

Agriculture Conservation and Trade Act of 1990) (P.L. 101-624; 104 Stat. 3658)

(7 U.S.C. 1738b). Amends the Agriculture Development and Trade Act of 1954

to allow the President to reduce the amount of P.L. 480 sales credit debt owed to

the United States by Latin American and Caribbean countries.

Export Enhancement Act of 1992 (P.L. 102-429; Title I, Section 108) (12

U.S.C. 635i-6). Authorizes the sale, reduction, cancellation, and buyback of

outstanding Export-Import Bank (Exim) loans for EAI purposes.

Jobs Through Exports Act of 1992 (debt forgiveness authority under EAI) (P.L.

102-549; Title VI, Section 704) (22 U.S.C. 2430 and 22 U.S.C. 2421). Authorizes

the sale, reduction, cancellation, and country buyback (through right of first

refusal) of eligible Commodity Credit Corporation (CCC) debt. Also authorizes

the reduction of foreign assistance (USAID) debt.

Enterprise for the Americas Initiative Act of 1992 (P.L. 102-532) (7 U.S.C.

1738m, p-r, etc.). Establishes guidelines for debt-for-nature swaps for Latin

American and Caribbean countries.

Agriculture Appropriations for FY1993 (P.L. 102-341). Provided $40 million

for P.L. 480 debt reduction under EAI.

Foreign Operations Appropriations for FY1993 (P.L. 102-391). Provided $50

million for debt restructuring under EAI.



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

Foreign Operations Appropriations for FY1995 (P.L. 103-306; Title II,

Section 534). Authorizes nongovernmental organizations associated with the

Agency for International Development to place funds from economic assistance

provided by USAID in interest-bearing accounts. Earned interest may be used for

the purpose of the grants given.

Foreign Operations Appropriations for FY1996 (P.L. 104-107; Title V,

Section 571). Provides authority to perform debt buybacks/swaps with eligible

loans made before January 1, 1995. For buybacks, the lesser of either 40% of the

price paid or the difference between price paid and face value must be used to

support conservation, child development and survival, or community

development programs (Title V, Section 574).

Tropical Forest Conservation Act of 1998 (P.L. 105-214) (22 U.S.C. 2431).

Amends the Foreign Assistance Act of 1961 to facilitate the protection of tropical

forests through debt restructuring, buybacks, and swaps in eligible developing

countries with tropical forests.

Reauthorization of the Tropical Forest Conservation Act (P.L. 107-26).

Authorizes the appropriation of $50 million, $75 million, and $100 million for

FY2002, FY2003, and FY2004. Reduces the magnitude of investment reforms

that must be in place for eligible countries.

Reauthorization of Appropriations under the Tropical Forest Conservation

Act (P.L. 108-323). Authorizes the appropriation of $20 million, $25 million, and

$30 million for FY2005, FY2006, and FY2007, respectively. Includes

authorization for evaluating programs and allows for the principal on debt

agreements to be treated by the debt-for-nature transaction.

Author Contact Information

(name redacted)

Specialist in Natural Resources Policy

[redacted]@crs.loc.gov

, 7-....

Congressional Research Service

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