The Proposition
Carbon is a sovereign asset
Sovereign Carbon reduces LDCs' debt burdens and opens new sovereign revenue lines, creating an explicit link between sovereign debt and sovereign carbon for the first time.
Take out existing debt (ideally below par) and lock in a lower coupon through insurance.
Direct a portion of savings to Article 6-aligned projects.
Generate new sovereign revenue from the sale of carbon credits.
$6.2B
Sovereign debt refinanced via debt-for-nature
$1.7B
Earmarked for conservation
9
Deals since 2018
0
With a carbon revenue layer
The reframe
This structure elevates carbon to a sovereign asset, and has the potential to transform the lives of billions.
Debt drains potential
Debt burdens erode human & natural capital
LDCs lack the capital necessary to maximise their citizens' potential and alleviate their suffering. Large debt service obligations reduce the capital available to invest in infrastructure, human capital, and nature.
Debt drain
LDCs spend 20% of their national budgets on debt, draining funds from essential sectors like education, health, and infrastructure.
Pressure on nature
Population growth, fuel poverty, and climate change create pressure on natural systems to support immediate needs.
No capital, no incentive
LDCs lack the capital and financial incentives required to protect nature and make restoration viable.
Relief is not enough
Reducing debt service is not enough. Sovereigns need recurring revenue to fund their future.
Solution
How it works
A new SPV issues an insurance-wrapped bond, acquires the sovereign's outstanding debt, locks in annual savings, and channels a share into Article 6 projects.
Issue new insurance-wrapped bond
A new SPV issues a bond with a political risk insurance wrapper from a multilateral or private insurer to institutional investors. Catalytic capital can act as the anchor and / or a first-loss holder under this structure.
Acquire sovereign debt
In parallel, and with the issuance proceeds, the SPV acquires a sovereign's outstanding debt. Ideally the SPV buys below par to lock in savings on principal for the sovereign.
Retain annual interest cost savings
The sovereign retains a portion of the debt service savings for investment in productive infrastructure — education, health, water, power.
Redirect a portion of savings to a carbon trust
A portion of the annual interest cost savings is directed to a ringfenced trust with independent governance.
Fund Article 6 projects from the trust
The trust's governing body identifies high-calibre, Article 6-aligned projects and funds them from the trust's balance sheet. Additional third-party capital may flow in to cover implementation costs.
Revenue share creates a sovereign carbon income stream
The trust's agent sells credits generated by the projects in the market. Sales proceeds are split between the sovereign, the project developer, and the arranger.
Nine precedents for debt restructuring. Zero for carbon.
Nine sovereign debt-for-nature conversions have closed since 2018. $6.2 B refinanced, $1.77 B earmarked for conservation. None layer Article 6 revenue. None listed on a major exchange.
| Country | Year | Debt refinanced | Conservation | Arranger | Credit enhancement |
|---|---|---|---|---|---|
| Seychelles | 2018 | $21.6 M | ~$4 M | NatureVest (TNC) | None |
| Belize | 2021 | $553 M @ 55¢ | $180 M / 20 yr | Credit Suisse | DFC $610 M PRI |
| Barbados | 2022 | $150 M @ 92¢ | ~$50 M | Credit Suisse | IDB $100 M |
| Ecuador (Galapagos) | 2023 | $1.6 B @ 40¢ | $450 M / 18.5 yr | Credit Suisse | DFC PRI + IDB $85 M |
| Gabon | 2023 | $500 M | $125 M / 15 yr | Bank of America | DFC PRI |
| El Salvador | 2024 | $1.03 B | $350 M / 20 yr | JP Morgan | DFC $1 B + CAF $200 M |
| Ecuador (Amazon) | 2024 | $1.53 B | $460 M / 17 yr | Bank of America | DFC $1 B + IDB $155 M |
| Bahamas | 2024 | $300 M | $124 M / 15 yr | Standard Chartered | IDB + AXA XL |
| Côte d'Ivoire | 2024 | €400 M | 30 schools | Commercial | World Bank Group |
| TOTAL | — | ~$6.2 B | ~$1.77 B | — | — |
Impact
Impact calculator
Inputs — drag the sliders, the numbers move
Debt reductions · Principal
$345M
Instant, one-off balance-sheet improvement
Debt reductions · Interest
$30M/yr
Annual, recurring · 300 bps captured
Debt reductions · Allocation to carbon
$15M/yr
New carbon credit revenue
$37.5M/yr
Sovereign 60% · Developer 35% · Arranger 5%
Total sovereign economic value
$608M
61% of face retired
Execution
Sovereigns, capital, and operating partners
We deliver on this mission through a network of known partners, each experts in their fields.
Catalytic capital
Secure initial in-principle capital commitment to elevate the proposition and attract all the other parties.
Institutional backing
Secure UNDP and Euronext Dublin support for listing, timed for the Irish EU Presidency in H2 2026.
Operational partner
Capitalise on in-country work with project developers that is already underway.
Sovereign pipeline
Secure interest from a number of countries through our governmental relationships.
Structuring partner
To architect the sovereign transaction.
Capital
Political risk insurance and multilateral development bank guarantee (to replicate the standard architecture), and institutional investors for the listed bond.
Deadline
Launch in September 2026
Three converging factors create opportunity to launch Sovereign Carbon at Ireland's Sustainable Finance Week, 14–18 September 2026.
UNDP Sustainable Finance Hub
Established in 2025 with €7.5m backing from the Irish government, the UNDP are searching for a flagship transaction.
Euronext Dublin
Euronext Dublin is already the leading venue for green bonds by volume and is actively looking for new products to launch.
Irish EU Presidency
Ireland assumes the EU presidency for H2 2026 and is seeking a marquee announcement on sustainable finance.
Timeline to 14 September
Secure catalytic capital
Appoint teams
Project operations, capital markets, arrangers.
Secure UNDP, Euronext & Irish government support
Start sovereign & investor engagement
UNDP Dublin Sustainable Finance Week
Progress first transaction
Actions
We are moving fast
Catalytic capital commitment
Secure $100m catalytic capital to crowd in all other participants.
Engage & appoint teams
Finalise appointment of structurer and assess operational partners.
Build institutional support
With catalytic capital secured and partners appointed, this becomes irresistible to the UNDP and the Irish government.