Debt canceled to preserve Peru rainforests

Area spans more than 27.5 million acres

(CNN) -- There's new protection for some of the richest rainforests on Earth, thanks to a new agreement between Peru and the United States.

The agreement, called a "debt-for-nature swap," was signed in Washington, D.C., last month by Allan Wagner, Peru's ambassador to the United States, and John B. Taylor, Treasury Department undersecretary for international affairs.

The deal commits the Peruvian government to provide local currency funding for Peruvian conservation groups, giving them the money they need for critical conservation work in 10 rainforest areas covering more than 27.5 million acres -- an area the size of Virginia or Cuba.

"These areas are really the heart of the western Amazon," said Meg Symington, director of Latin American programs for the World Wildlife Fund. "They're the most pristine, the richest in terms of the species they contain."

Under the agreement, $5.5 million of Peru's debt to the United States is canceled, saving the Peruvian government about $14 million in future payments.

"They instead will pay $10 million in local currency into a trust fund in Peru that will benefit conservation," Symington said.

The U.S. funding is authorized by the Tropical Forest Conservation Act of 1998, which encouraged the reduction of foreign debt in exchange for a financial commitment to forest conservation.

Major challenge

For the first time in a debt-for-nature swap, leading U.S.-based conservation organizations joined forces with the U.S. government.

Conservation International, The Nature Conservancy and the World Wildlife Fund together committed more than $1 million to the transaction.

"Because the U.S. conservation groups are participating, we are able to provide technical expertise regarding how these funds should be used and ... the most important places where they should be spent," Symington said.

Saving Peruvian rainforests is a major challenge for conservationists.

In Peru there are some 20,000 species of vascular plants and nearly 1,800 species of birds, many of them found nowhere else. Their habitats are threatened by destructive logging, agricultural clear-cutting, mining and exploration for oil and gas.

Peruvian conservationists will use their new funding for a wide variety of conservation work, including establishing and maintaining protected areas and reserves, conservation training, research, and supporting the livelihoods of indigenous people in the forests.

"These funds will be incredibly important for the local groups working in Peru," Symington said. "It provides a long-term source of dependable funding. We're talking $500,000 per year ... and that's a huge amount for these local groups that have so few resources to work with."