For Immediate Release
Office of the Press Secretary
April 21, 2001
Fact Sheet Tropical Forest Conservation Act
"We are committed to protecting the hemisphere's natural
resources. That's
why I am committed to using the Tropical Forest Conservation Act to
help countries redirect debt payment towards local projects that will
protect biodiversity and tropical forests."
President George W. Bush
April 21, 2001
The Tropical Forest Conservation Act (TFCA) is a unique and valuable
mechanism that funds activities to protect tropical forests in
developing countries through debt relief agreements. Under
the program, eligible countries can engage in a debt swap, buyback, or
reduction/restructuring.
Local currency payments resulting from the debt treatment go into a
Tropical Forest Fund in the eligible country. Grants are
made from the Fund to local NGOs and other entities that engage
in conservation activities. Benefits of the TFCA
Program include:
- Forest conservation: Resources that once went to debt
payments now remain in the debtor's domestic economy and are channeled
to local groups that engage in forest conservation activities.
- Cash flow relief: Cash flows for debtors improve because
hard currency payments are converted into local currency payments and
because loans can be restructured or reduced.
- Financial leverage: To the extent that the debt is priced
below its face
value, the USG is able to leverage its funds for forest conservation.
This leverage increases substantially if the country engages in a debt
swap with a third party.
- Good Governance: Encourages growth and development of
local NGOs, and fosters close cooperation between governments and civil
society in addressing tropical forest issues.
Program Status: The President's budget makes over $30 million available
for
TFCA in FY 2002. As the program demonstrates success,
President Bush is committed to working with Congress to increase
funding.
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