The joint loan to a sustainable marine tourism company will benefit local workers and reduce the environmental impact of visitors to the archipelago off the coast of Ecuador.
Blue Earth Capital, a Switzerland-based specialist impact investor, and IDB Invest, the private sector arm of the Inter-American Development Bank Group (IDB), have each provided a loan of $7m (€6.4m) to Quasar Expeditions, a sustainable marine tourism company offering expeditions around the Galapagos Islands.
The money will allow Quasar to operate one of the first hybrid propulsion tourist vessels in the area, build a low-density operations center and give technical and educational training to the local community aboard a training vessel.
The impact investor invested in Quasar “for the opportunity to play a catalytic role alongside the Inter-American Development Bank Group in our first sustainable tourism transaction”, Clara Sanchez, head of Americas private credit at Blue Earth Capital, told Impact Investor.
Sanchez referred to the IDB’s “leadership on recent environmental initiatives in the Galapagos”, including its support for the recent energy transition plans of the Ecuadorian government as well as the country’s first ever Galapagos marine bond, which benefits from an IDB guarantee as well as institutional support.
Unique wildlife
The Ecuador government aims to generate 85% of the Galapagos Islands’ power from renewable energy sources and storage by 2030, rising to 100% by 2040. Around 270,000 people visit the archipelago each year and this number is steadily increasing, according to the Galapagos Conservation Trust. In 2022, the government expanded the protected Galapagos National Park in order to help protect at least five critically endangered species.
Located around 1,000 km off the coast of South America in the Eastern Pacific, the Galapagos Islands consist of an archipelago of 19 volcanic islands. Due to its location at the confluence of three ocean currents, and ongoing seismic activity, the islands and the surrounding marine reserve have become a “melting pot” of marine species, according to Unesco.
Its unusual animal life, ranging from the land iguana to the giant tortoise, served as the inspiration for Charles Darwin’s Theory of Evolution by natural selection following a visit in 1835.
Social impact
The social impact was another reason Blue Earth invested in the project “especially given the critical importance of tourism in supporting livelihoods in emerging markets around the globe, and the need to balance the economic benefits of tourism with climate adaptation and ecosystem conservation”, Sanchez said.
The joint investment is estimated to grow purchases from micro, small and medium-sized to $2.8m in the next three years, according to IDB Invest and Blue Earth.
“We are convinced that we must continue promoting responsible tourism projects like Quasar”, said Aitor Ezcurra, chief investment officer of IDB Invest. “This project serves as a model for other tourism operators, the local community and public institutions to support sustainable tourism practices that are essential to protect the Galapagos ecosystem.”
IDB Invest will also give Quasar guidance on gender, diversity and inclusion practices to advance gender equality.
SDGs
The project is expected to contribute to four UN Sustainable Development Goals (SDGs): Decent Work and Economic Growth (SDG 8), Responsible Production and Consumption (SDG 12), Climate Action (SDG 13), and Partnerships for the Goals (SDG 17).
“The company will achieve a key objective in its vision of being a model for sustainable tourism,” said Eduardo Diez, founder and executive president of Quasar Expeditions. “The M/Y Conservation will be one of the first vessels in the Galapagos Islands with hybrid propulsion, capable of offering guests a cruising experience in total harmony with its natural environment.”
“Supporting sustainable tourism in the Galapagos has long been critical given that tourism drives 80% of the Galapagos economy, but this needs to be balanced with the challenges of climate change and of preserving natural biodiversity, especially in such a unique ecosystem,” Sanchez said.
