Peru will redirect $20 million of its debt to the US to spend on conservation efforts in some of the most biodiverse areas in the Peruvian Amazon.

Under a deal agreed between the two governments on Thursday, the South American country agreed to spending the funds on establishing parks and protected areas in its rainforest, as well as improving the livelihoods of Indigenous peoples and local communities.

Environmental groups including Conservation International and WWF contributed some $3 mln to the arrangement.

“Today’s debt-for-nature swap is a historic moment for Peru, a crucial signal from the United States government and a positive harbinger for the future of conservation as we pursue innovative ways to protect — and properly value — the nature that sustains us all,” Conservation International CEO M. Sanjayan said in a statement.

Similar deals are becoming an increasingly popular way to help developing nations protect and restore nature, though the US-Peru agreement was significantly smaller than some others, such as the $650-mln arrangement for Ecuador earlier this year.

The US has been contributing to 22 debt-for-nature swaps in 14 countries since it adopted the 1998 Tropical Forest and Coral reef Conservation Act, generating over $380 mln in conservation funds over those 25 years, according to Conservation International.

“There’s a growing recognition that many countries that would like to support conservation can’t because of financial constraints, including burdensome debt. Debt-for-nature swaps give them that chance,” said Andrew Schatz, senior legal advisor at the conservation group.

A paper released last week in environmental journal Ambio concluded that of 67 highly indebted countries studied, over half could protect all their biodiversity for only a fraction of their debt relief.

However, some observers have argued that the complexity of debt-for-nature deals leave fewer resources than desired available for nature protection and restoration work.

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