"Poor Nations Seek To Go Green With Debt Swaps"

"Debt-for-nature and climate swaps are difficult and costly to agree but offer one way to unlock the vital finance needed for more sustainable economies".

"KUALA LUMPUR - With many developing nations facing a triple whammy of rising debt loads, climate change and nature loss, conservationists say the answer could lie with a financial instrument enabling them to tackle all three at once: "debt-for-environment swaps".

The world's poorest countries owe $62 billion in annual debt service, a year-on-year increase of 35%, the World Bank said in December, warning of a rising risk of defaults.

But even as debts burdens grow, there is now an urgent need for countries to invest more in climate and biodiversity protection to meet their international and national commitments.

In a bid to deal with these problems across the board, Portugal and Cape Verde sealed an agreement for a "debt-for-nature" swap last month, just days after Zambia said it too was looking at a similar proposal from green group WWF."

Michael Taylor reports for Thomson Reuters Foundation February 15, 2023.


Source: Thomson Reuters Fdn., 02/16/2023