Ecuador, known for its “megadiverse” Galapagos Islands, Amazon rainforest, Andes and Pacific coast, wants to protect its natural landscapes for years to come — but it faces a tricky balancing act. 

As well as preserving its nature, the South American country also plans to capitalize on its critical minerals and continue to extract oil from parts of the Amazon — both of which have led to protests from Indigenous and environmental groups.

One way Ecuador is planning to channel funds into its nature is via new financial tools, such as “debt-for-nature” swaps and its first sovereign green bond. It is also aiming to raise its environmental profile on the global stage by hosting the U.N.’s biodiversity summit, known as COP18, in 2028.

Ecuador, which uses the U.S. dollar, is no stranger to green finance. In March, IDB Invest, the private-sector arm of the Inter-American Development Bank, and Ecuadorian lender Banco Bolivariano issued a $120 million biodiversity bond to back conservation projects. The government also completed two swaps in 2023 and 2024 — deals in which a country’s debt is refinanced on better terms in exchange for commitments to spend the savings on conservation. Together, they freed up about $1.1 billion for conservation in the Amazon and Galapagos Islands.

Juan Carlos Blum, Ecuador’s minister of environment and energy, said the country hopes to issue sovereign green bonds for the first time in 2027, to raise finance to protect its coastal and mountainous regions and the people whose livelihoods depend on them. The government is looking to the European Union for advice on such instruments, he said. The bloc set green bond standards in 2024.

For Blum, one of the challenges is public awareness. “A lot of us are not aware of how we depend on nature, how we depend on the biodiversity, how vulnerable we all are towards climate,” he told CNBC by video call.

About 80% of Ecuador’s energy was generated from oil and oil products in 2024, according to the International Energy Agency, while about two-thirds of its electricity was produced using hydroelectric power.

Cracking down on illegal mining is a focus for Blum, who told CNBC he was aware of…