PROVIDENCE – Bank of America Corp. has refinanced $500 million of sovereign debt of the Gabonese Republic in Africa, the bank announced.

The transaction – the first debt-for-nature transaction in Continental Africa – will enable Gabon to contribute $125 million in new funding for a 15-yearlong ocean conservation and refinancing project, supporting the country’s commitment to protect 30% of its lands, freshwater systems and ocean by 2030, according to a news release.

The bank acted as sole initial purchaser, structuring agent and bookrunner on the bond issuance, as well as sole dealer manager for a tender offer using the proceeds raised from the issuance used to repurchase a portion of Gabon’s existing sovereign U.S. dollar-denominated Eurobonds, according to the release.

“As the first debt-for-nature transaction in Continental Africa, this transaction demonstrates Bank of America’s commitment to sustainable finance and our ability to innovate for our clients,” Paul M. Donofrio, bank vice chair, said in a statement. “We are encouraged by the enthusiastic response from the global investor community and hope this transaction will serve as a blueprint that can be scaled for other countries interested in improving the sustainability of their debt, while putting global capital to work in enhancing natural capital.”

The sustainable ocean economy is nearly $3 trillion, which is approximately 3% to 5% of the global gross domestic product, according to the United Nations Conference on Trade and Development.

The payments by Gabon will be partially used to fund contributions to an independent conservation fund, with The Nature Conservancy as the project manager and technical adviser, and pay into an endowment that will continue to fund conservation after the bonds are repaid, according to the release.

Political risk insurance for the loan is being provided by the U.S. International Development Finance Corp., which enhances the credit rating of the bond issuance and provides debt relief for Gabon over the next 15 years, according to the release. The deal represents the highest amount of new debt raised for a Nature Conservancy-sponsored project.

“The launch of Gabon’s Blue Bond is an important moment, giving us hope that green or blue financial mechanisms will grow significantly in coming years and help countries like Gabon, who effectively protect critical ecosystems whilst also growing our economies,” Gabon President Ali Bongo Ondimba said in a statement. “All too often talk of these new mechanisms to reward countries like my own remain just that. In this case, thanks to the work of our partner, Bank of America, The Nature Conservancy, and the US International Development Finance Corporation, we have made it a reality. I call on Developed Nations and our Multilateral Banks to multiply these sorts of initiatives, which could make a significant contribution to addressing the critical challenges of Climate Change and Biodiversity Loss.”

In 2020, the bank set out to mobilize and deploy $1.5 trillion by 2030 to advance the sustainable development goals that 193 countries agreed to in 2015, with $1 trillion of that focused on helping clients transition to a low-carbon future, according to the release. From 2021-2022, the bank deployed a total of $410 billion in sustainable finance, with more than $235 billion of that focused on helping drive affordable clean energy and related priorities.