In a debt-for-nature swap, a country's government bonds or loans are purchased and replaced with new ones that pay a lower interest rate, as long as the government commits to spending some of the money saved on conservation.

Ecuador may be considering new debt-for-nature swaps. One to channel funds into the Amazon rainforest and another for a giant ocean protection zone backed by Hollywood star Leonardo DiCaprio, people familiar with the matter said.

The South American country is looking to take advantage of the record $1.6 billion debt swap it structured for its Galapagos Islands last year.

While the government is now focused on combating drug-fueled organized crime and securing a new deal with the IMF, sources said officials have been working with multilateral development banks and conservation groups for months on at least two possible debt swaps in hopes of closing something this year.

The first would be linked to the protection of parts of the Amazon rainforest, widely considered the most important natural ecosystem in the world. The second option refers to the financing of an innovative Marine Protected Area that Ecuador has created along its entire 2,237 km Pacific continental coast.

Ecuador will probably need to focus on one for now, a person familiar with the plans said, given the time and effort required to structure such debt swaps.

In a debt-for-nature swap, a country's government bonds or loans are purchased and replaced with new ones that pay a lower interest rate, as long as the government commits to spend some of the money saved on conservation.

Typically, a development bank backs the deal with a "credit guarantee" or "risk insurance," which protects buyers of the new bonds if the country is unable to pay the money back.

Ecuador, considered one of the world's 17 "megadiverse" countries, also has one of the worst deforestation rates in Latin America according to the environmental arm of the United Nations.

That, combined with its high debt, makes it an obvious candidate for debt-for-nature swaps.

Two of the four people who spoke to Reuters on condition of anonymity said the swaps being explored would likely share a number of features with last year's record-breaking Galapagos deal.

They would aim to provide tens of millions of dollars a year for respective conservation goals and each could refinance about $1 billion of Ecuador's debt, although the figures could change depending on the timing, the sources said.

According to two of the sources, the Inter-American Development Bank (IDB) and the US International Development Finance Corporation (DFC) are lining up again to provide the "credit guarantee" and "political risk insurance" needed to reduce the cost of borrowing and create savings.

Ecuador's finance minister said last month that the country was looking to follow up on the Galapagos agreement. Both the ministry and the IDB declined to comment on the details of the plans reported in this story.

A DFC spokesperson said it was “exploring debt conversion opportunities for nature-related transactions around the world,” although it could not reveal which countries.

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A tender or request for proposal for the planned debt swap has not yet been sent to the banks, two of the sources said.

While some debt experts argue that complex debt-for-nature swaps do not always save governments as much money as suggested, countries like Ecuador or Barbados are seeking to do more.

Three sources said The Nature Conservancy was doing some of the scoping and design work for the Amazon-linked exchange.

The nonprofit has been instrumental in deals in Seychelles, Belize and Barbados, and last year in Gabon, where the focus was the Congo rainforest.

In the option linked to the ocean protection zone, that role would be played by Re:wild, two of the people said. The group co-founded by DiCaprio in 2021 already funds conservation work in the Galapagos.

The NGO did not respond to a request for comment.

Ecuador's waters are the home and breeding ground for thousands of species, including humpback whales and leatherback turtles. The first-of-its-kind ocean protection zone it created last year means its coastline is now covered 8 nautical miles (14.8 km) out to sea.