With the debt burden in certain emerging markets approaching unsustainable levels, Eurobond maturities requiring active management and with a climate crisis advancing, governments, creditors and the official sector are exploring new and innovative ways to restructure and reprofile sovereign debt, while simultaneously supporting opportunities to tackle climate-related challenges. Debt-for-nature swaps offer a solution.
Background
The concept of debt-for-nature swaps was first launched in 1984 by the then vice president of the World Wildlife Fund, Thomas Lovejoy, in response to the deteriorating tropical rain forests and mounting debt obligations in developing countries, especially in…