## Seychelles Pioneers Novel Financing Instruments and Taps IMF Climate Facility

_IMF News, July 5, 2023_

## Source details

**Canonical URL:** [Seychelles Pioneers Novel Financing Instruments and Taps IMF Climate Facility](https://www.imf.org/en/news/articles/2023/07/05/cf-seychelles-pioneers-novel-financing-instruments-and-taps-imf-climate-facility)

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## Bibliographic details
- Published: July 5, 2023

---

### Overview
- Seychelles is balancing conservation and economic development by tapping innovative financing instruments to pursue an ambitious climate change agenda.
- The country relies largely on tourism and fishing for revenue and was the first country to issue a blue bond and to designate fragile coastal areas for protection in return for a novel deal relieving it of part of its sovereign debt.
- Seychelles is the second African country, after Rwanda, to access the IMF’s Resilience and Sustainability Facility (RSF).

### Climate change impact on the economy
- Geographic and demographic exposure:
  - About 90 percent of the population and most critical infrastructure are concentrated in the narrow coastal plateau surrounding Mahé, Praslin, and La Digue.
- Key sector vulnerabilities:
  - Tourism contributes to over 20 percent of GDP and a quarter of employment.
  - Climate change threatens beaches and coral reefs that underpin tourism.
  - Fisheries are affected through altered ocean currents, water temperatures, and ecosystems, leading to reduced fish stocks and economic impacts on livelihoods.
- National targets and cost estimates:
  - Long-term goal of switching to renewable energy to meet the target of zero emissions by 2050.
  - Implementation costs estimated at over US$ 600 million over the next decade, or about 5 percent of GDP per year.
- Policy orientation:
  - Seychelles has comprehensive adaptation and mitigation strategies and is seeking financial assistance from international organizations.

### Innovative climate financing instruments
- Past and existing instruments:
  - First sovereign blue bond issued in 2018, raising US$15 million from international investors to support sustainable marine and fisheries projects.
  - First country to undertake a debt-for-climate swap aimed at marine conservation.
- Future financing options under consideration:
  - Carbon trading.
  - Sustainability bonds.
- Expected complementarities:
  - RSF funding is expected to provide fiscal space, help catalyze private financing for climate projects, and be supported by IMF technical assistance and capacity building.

### IMF Resilience and Sustainability Facility (RSF): role and proposed reforms
- Purpose:
  - RSF funding is aimed at helping countries with limited budgetary room address long-term challenges such as climate change and pandemic preparedness.
- Three groups of reform measures under the RSF:
  1. Public investment and fiscal management
     - Revise budget and project appraisal procedures to promote climate-resilient infrastructure investments.
  2. Financial sector
     - Improve access to climate finance.
     - Strengthen climate resilience of the financial sector by stress testing banks and collecting and disseminating relevant data.
  3. Climate change mitigation and adaptation
     - Facilitate transition to renewables.
     - Promote adoption of climate-sensitive building codes.
     - Develop and implement disaster risk financing strategies.

### Monitoring, reviews, and implementation
- Review process:
  - RSF reviews will take place concurrently with reviews of the Extended Fund Facility (EFF).
  - The EFF aims to strengthen macroeconomic stability and policy frameworks and boost inclusive growth.
- Performance assessment:
  - Reviews will assess progress on each RSF reform measure against predetermined targets.
  - The government will provide updates on its broader climate change agenda.
- Expected capacity support:
  - IMF technical assistance and capacity building to strengthen institutional and policy frameworks.

### Key statistics and factual items (verbatim)
- "About 90 percent of the population"
- "over 20 percent of GDP"
- "a quarter of employment"
- "zero emissions by 2050"
- "over US$ 600 million over the next decade, or about 5 percent of GDP per year"
- "US$15 million"
- "first ... in 2018"
- "second African country, after Rwanda"

*Source: Seychelles Pioneers Novel Financing Instruments and Taps IMF Climate Facility — July 5, 2023, International Monetary Fund.*

---


## References

- [SEYCHELLES AND THE IMF](https://www.imf.org/en/Countries/SYC)
- [STAFF REPORT](https://www.imf.org/en/Publications/CR/Issues/2023/06/28/Seychelles-Requests-for-an-Extended-Arrangement-under-the-Extended-Fund-Facility-and-535367)
- [RST](https://www.imf.org/en/Topics/Resilience-and-Sustainability-Trust)
- [https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)
- [https://www.imf.org/en/publications/weo](https://www.imf.org/en/publications/weo)
- [Global Economy in Crosscurrents of War and Technology](https://www.imf.org/en/publications/weo/issues/2026/07/08/world-economic-outlook-update-july-2026)
- [https://www.imf.org/en/publications/gfsr](https://www.imf.org/en/publications/gfsr)
- [Global Financial Markets Confront the War in the Middle East and Amplification Risks](https://www.imf.org/en/publications/gfsr/issues/2026/04/14/global-financial-stability-report-april-2026)
- [https://www.imf.org/en/publications/fm](https://www.imf.org/en/publications/fm)
- [Fiscal Policy under Pressure: High Debt, Rising Risks](https://www.imf.org/en/publications/fm/issues/2026/04/15/fiscal-monitor-april-2026)
- [https://www.imf.org/en/publications/reo](https://www.imf.org/en/publications/reo)
- [Asia and Pacific](https://www.imf.org/en/publications/reo/apac)
- [Europe](https://www.imf.org/en/publications/reo/eu)
- [Middle East and Central Asia](https://www.imf.org/en/publications/reo/meca)
- [Sub-Saharan Africa](https://www.imf.org/en/publications/reo/ssa)
- [Western Hemisphere](https://www.imf.org/en/publications/reo/wh)
- [https://www.imf.org/en/publications/areb](https://www.imf.org/en/publications/areb)
- [Getting to Growth in an Age of Uncertainty](https://www.imf.org/en/publications/areb/issues/2025/09/24/annual-report-2025)
- [More Publications](https://www.imf.org/en/publications)
- [IMF’s Resilience and Sustainability Facility](https://www.imf.org/en/About/Factsheets/Sheets/2023/Resilience-Sustainability-Facility-RSF)
- [Extended Fund Facility](https://www.imf.org/en/About/Factsheets/Sheets/2023/Extended-Fund-Facility-EFF)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2023/07/05/cf-seychelles-pioneers-novel-financing-instruments-and-taps-imf-climate-facility_