A&O Shearman represents conservation program managers in USD1 billion debt conversion for conservation by El Salvador

El Salvador is expected to realize more than USD352 million in lifetime savings through a combination of immediate notional debt savings and material reductions in debt service costs. USD350m of these savings will be applied to the Rio Lempa Conservation and Restoration Program over the next 20 years thereby supporting the country’s commitment to watershed conservation. This transaction is the world's largest debt conversion for the conservation of a riverway. 

The Rio Lempa watershed is one of the longest rivers in Central America and plays a critical role in the well-being of cities, communities and the El Salvadoran economy by providing drinking water as well as supporting industry, hydropower generation and irrigation. Projects funded by the savings from this transaction are expected to strengthen climate resilience and mitigate water security risk in the region.

CRS and FIAES will jointly manage the program and collaborate with government water and environmental agencies to enhance water security and watershed health, promote biodiversity, stimulate economic development through regenerative agriculture and strengthen management capacities in the Rio Lempa watershed. 

DFC, the U.S. government’s international development bank, provided USD1bn in political risk insurance while CAF provided a USD200m standby letter of credit.

The A&O Shearman team was led by of counsel Antonia Stolper, with support from partner Alejandro A. Gordano, associate Gonzalo Robles, and visiting attorney Regina Odar.