Many countries face a dual challenge: mounting debt burdens and growing pressure to address climate change. For some, a debt-for-climate swap, or debt-for-nature swap, may be a useful tool in tackling both.
Debt-for-nature swaps, along with variations such as debt-for-climate and debt-for-environment swaps, are transactions where a portion of a country’s debt is forgiven or refinanced in exchange for the local government investing in conservation or climate priorities.
While there have been some 140 debt-for-nature swaps over the years, the past 18 months have seen a sharp increase in the use of this tool. That has included participation from major development finance players including the U.S. International Development Finance Corporation, the Inter-American Development Bank, and large private financial institutions.
About the author
Adva Saldinger@AdvaSal
Adva Saldinger is a Senior Reporter at Devex where she covers development finance, as well as U.S. foreign aid policy. Adva explores the role the private sector and private capital play in development and authors the weekly Devex Invested newsletter bringing the latest news on the role of business and finance in addressing global challenges. A journalist with more than 10 years of experience, she has worked at several newspapers in the U.S. and lived in both Ghana and South Africa.
